Any idea how much Knight ended up losing?
I remember interviewing with this company, Allston Trading in college. They were the only ones who showed up at the Career fair with the salary printed out on brochures. $100k for a fresh java developer. During the interview in their plush offices in the Chicago stock exchange, they were casually discussing how they ended up losing $5million in forex last night.
All of them were young, brash and looked like they had little regard for investors money. One trading guy was telling us how he flies to vegas just for the weekend to get with hookers (during a lunch interview!).
The managers seemed like your typical alpha-male..bullish, dominating and little regard for morals. Although some computer scientists that they had seemed brilliant and were genuinely interested in building safer, better algos. So i wouldn't be surprised if it's these wall st. types that are pushing the limits further even if deemed unsafe.
Consensus number seems to be $440M in losses on the bulk liquidation of $4.5B in unwanted positions to Goldman Sachs. This represents about a 10% loss.
GS does bulk liquidations like this and typically takes a haircut of 2-5%, presumably based on a risk and liquidity assessment.
>i wouldn't be surprised if it's these wall st. types that are pushing the limits further even if deemed unsafe.
It's human greed. Those 'wall st. types' and those brilliant computer scientists are all in it to make as much money as possible. Those you looked up to as hero's were not corrupted by those you wish to look down on, they all went into it wanting the same thing. The environment changed allowing them to try and get it faster.
The managers seemed like your typical alpha-male..bullish, dominating and little regard for morals. Although some computer scientists that they had seemed brilliant and were genuinely interested in building safer, better algos. So i wouldn't be surprised if it's these wall st. types that are pushing the limits further even if deemed unsafe.