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Again, unusual and volatile trading has triggered a ripple that’s cut a swatch across a range of stocks and it calls the reliability of technology into question. In a statement , market maker Knight Capital said a "technology issue" affected the routing of about 150 stocks listed on the New York Stock Exchange.
Although the events are complex, the pros say what you need to know is that there was a problem with Knight Capital software and the way it interacted with the NYSE.
And the pros say unless something is done, it will only be a matter of time before similar events happen, again. And the next time could be worse – far worse. At some point unexpected hiccups in technology could send the Street into spiral that will be almost impossible to stop.“Hundreds of these systems interact all around the country – that’s the modern market making system,” explains trader Joe Terranova, , chief market strategist for Virtus. “And we’re learning it doesn’t always work.”That's scary.Henry Blodgett, of Business Insider, says Wall Street needs to wake up. “Trading relies on technology. When you have a big technical error – it’s a warning.” A serious warning.
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