The $440 Million Code Typo

How a forgotten test flag and a repurposed software variable in a high-frequency trading algorithm evaporated $440 million in 45 minutes.

#tech #finance #algorithm-fail

The Raw Data

On August 1, 2012, Knight Capital Group deployed a new trading algorithm to the New York Stock Exchange. Due to a manual deployment error on one of their eight servers, an obsolete, dead piece of code called “Power Peg” was accidentally reactivated.

Instead of routing orders properly, the broken server began buying high and selling low at a rate of thousands of trades per second.


Full Transcript

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