The 5 Most Surprising Stock Stories of 2012

A few major collapses, a turnaround and a big buy from left field

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The 5 Most Surprising Stock Stories of 2012

Knight Capital Demonstrates How Robots Rule the Trading World

KnightCapital185 The 5 Most Surprising Stock Stories of 2012Knight Capital (NYSE:KCG) called it a glitch, though most glitches don’t cost $400 million and ultimately drive a company to the point of insolvency. The shock, however, isn’t so much the “what” but the “how.”

How did Knight Capital lose $400 million — about a third of the company’s market cap at the time — in just a few hours?

An algorithm that initiated pre-determined, event-based trades had been left turned on when it should have been deleted from the company’s trading program. It’s a scary reminder (and evidence?) that much of the market’s movement is completely unmonitored by human eyes until it’s too late to stop the chain reaction.


Article printed from InvestorPlace Media, http://investorplace.com/2012/12/the-5-most-surprising-stock-stories-of-2012/.

©2014 InvestorPlace Media, LLC

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