Wall Street’s 5 Biggest Tech Fails

As the Knight Capital trading fiasco once again proved, in the race to be first, crashes will happen. But slowing down today’s high-speed marketplace would be akin to going back to the Stone Ages for market participants. High-speed trading is here to stay, and strategies will continue to grow more complex. But over the past two years, there have been a number of high-profile incidents in which an inability to harness the latest technologies that power our markets has cost industry players

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The Flash Crash, May 6, 2010

In a span of about 20 dizzying minutes, the U.S. equity markets plunged nearly 700 points before quickly recovering following an errant, computer-driven trade worth $4.1 billion. The transaction, which was orchestrated by a lone Waddell & Reed trader, highlighted just how fast liquidity can evaporate from a market that’s dominated by high-frequency trading. The incident also set off a firestorm of negative publicity for the industry and led to a series of reforms, including the implementation of marketwide circuit breakers, bans on “stub quotes” by market makers, and bans on the practice of brokers giving their clients “naked” access to exchanges without any pre-trade supervision.

[What's Changed Since the Flash Crash?]

As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio

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