What Business is Wall Street In?

Re:What Business is Wall Street In? by uptown on Friday September 21, 2012 @01:46PM (#4554801)

My point was that external factors can have an impact on the stock price of an company in ways that previously hadn't been possible, and I cited HFT as one of those factors. You cited Knight Capital whose "internal factor [...] (apparently?) accidentally deployed a bunch of test code to production" resulted in "trading activities [that] caused a major disruption in the prices of 148 companies listed".

So yes - in this case, the internal factor of Knight running a flawed algorithm turned into a very real external factor for those 148 companies, as well as anybody else whose trading was impacted along the way.

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Re:What Business is Wall Street In? by harryh on Friday September 21, 2012 @01:49PM (#4554817)

The share price for those 148 companies barely moved.

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Re:What Business is Wall Street In? by uptown on Friday September 21, 2012 @02:21PM (#4554987)

Yet Knight Capital's share price never recovered. Say instead of KCG it was JPM, operating without the usual risk concerns because they've got assurance from the government of support. Should investors or taxpayers be okay with such an "internal issue" destroying part of their net worth? And wouldn't a too-big-to-fail company have a broader impact on the entire market if such a think were to happen? It's kind of the whole concept behind too-big-to-fail that they would.

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