High frequency trading might be making money faster than humanly possible, but it's not perfect.
After yesterday's Knight Capital high-frequency trading disaster, the future of the algorithm based money making machine has been questioned.
And, it wasn't Knight Capital's first computer based mistake.
So, we've made a list of ten of the biggest algorithm or technology based mistakes that have lost investors and tax payers millions over the last few years.
Infinium Capital's oil trading glitch
On February 3, 2010, Infinium Capital Management's high-frequency trading system caused a dollar spike in oil prices.
The algorithm used by Infinium was less than one day old and was used to complete "lead/lag" trades of the US Oil Fund ETF.
The algorithm was turned on four minutes before the market closed, and uncontrollably began placing 2,000 to 3,000 oil futures orders per second. The algorithm was turned off five seconds later.
The firm lost $1.03 million in five seconds.
The 2010 Flash Crash
On May 6, 2010, stock prices fell for a terrifying 20 minutes.
European debt worries brought fear into the markets that day, and several computerized trading systems halted executions due to the markets volatility. The freeze in trading caused computers at other exchanges to read the freeze in trading as a rapid bidding down of stocks.
The Dow Jones Industrial Average was even down 998.5 points, erasing $862 billion. But, a few minutes after the crash, stocks regained about 600 points.
The CFTC blamed the mutual-fund company Waddell & Reed Financial for setting off the chain of events with its E-mini futures trades.
Following this fiasco, there have been circuit breakers installed that pause trading for over 1,300 securities when trading becomes volatile.
The sugar market flash crash in 2011
In February of 2011, high-frequency and algorithmic trading, made the sugar market crash by 6% is just one second.
See the rest of the story at Business Insider
Please follow Clusterstock on Twitter and Facebook.