6th August 2012: HFT Amok

Knight Capital‘s (KCG) new high-frequency trading (HFT) algorithms wreaked havoc on Wall Street last Wednesday.

 

The market-maker has had to rely on emergency funding to stay operational. A ‘runaway algo‘ had run amok for thirty minutes — and almost ended KCG’s existence. So much for automated trading strategies that enabled customer collaboration.

 

Wired has ‘rushed to publish’ a Jerry Adler profile of HFT firms and trends. Adler interviews the usual suspects including Aaron C. Brown, TradeworxThemis Trading, and RavenPack.