It's true that automated trading is fast, and that means that things can go off the rails fast. And, it's true, that has led to some spectacular news-making events. But, for that very reason and others, most trading firms keep a very close eye on what their auto-traders are doing. Closer than they ever kept on their pit traders.

I briefly worked at a firm that did both HFT and pit trading, supporting one of the teams in charge of monitoring both groups. And what I saw was that the company was generally much more in control of the algorithmic trading. It was more heavily instrumented than a human could ever be, with humans (who were themselves licensed traders) watching the computers very closely at all times, as many layers of automated fail safes that would kick in if things went a little screwy.

By comparison, the pit trading was kind of a mess, and the team was frequently having to scramble to amend all sorts of human errors largely stemming from things like miscommunication and straight-up bad handwriting. Beyond that, I'm sure that, compared to the folks operating the auto-trading systems, the pit traders never had as firm of a real-time grasp of the finer subtleties of their positions, simply because nobody's able to do math in their heads like that.

Which, I think, is why spectacular events in the markets stemming from speculative trading going off the rails aren't really any more common nowadays than they were in the days before high frequency trading. Yeah, computers created some new ways to screw things up, but they also mitigated some existing ones.

The net effect is not nearly as bad as journalists make it out to be. But, of course, playing to people's fear of the unknown has always been the more lucrative route for journalists to take.