Knight Capital Group’s $440 million trading loss stemmed from old computer software that was inadvertently reactivated when a new program was installed, according to two people briefed on the matter.
Knight Capital’s computers bombarded the market with unintended orders just after trading began on August 1st, causing volume to surge and prices to swing in dozens of securities.
Once triggered the dormant system started multiplying stock trades by one thousand, according to the people, who requested anonymity because the firm hasn’t commented publicly on what caused the error. Knight’s staff looked through eight sets of software before determining what happened, the people said.
This report from Bloomberg.
