Well, this is big news:
Will the big Wall Street traders finally decide they need the SEC to ban or radically slow computerized trading? Should we we have a transaction tax on trading rein in the worst excesses?
Seems to me losses like this are equivalent to the famous “Black Swan” reverse-lottery trading. Bet huge amounts of money on statistically sure things, and reap small rewards. Except when something unforseen happens, like a tiny software error, and then you’ve lost huge amounts. But traders are addicted to this thinking because, hey, that unusual thing doesn’t usually happen, and so you rack up your profits day after day and month after month and quarter after quarter. Then smash. In other words, professional Wall Street traders are, like most people, incredibly bad at risk management.