On 1 August 2012, two hundred and twelve ordinary customer orders arrived at Knight Capital. Forty-five minutes later the firm had made four million trades and lost roughly ten million dollars a minute.
The new software wasn’t buggy. It worked perfectly — on seven of the eight servers it reached. On the eighth, an old switch still meant what it had meant since 2003: wake up a piece of code that had been quietly broken since 2005, and had been sitting on the machine ever since, waiting.
The Magnanimous Doctor Warthan opens the file on the most expensive deployment in history: the counter that was moved, the ninety-seven warning emails nobody was assigned to read, the repair attempt that made it dramatically worse — and the fact that when the machine went mad, there was no plug anywhere in the building to pull.
Technical details drawn from the SEC’s administrative order against Knight Capital Americas LLC (16 October 2013).
The Doctor’s voice and the Society’s imagery are synthesized.