Interesting Facts

According to Bloomberg, the computer trading error that cost Knight Capital, the US market maker $440m (£282m) (see IF 9th Auguts 2012) can be blamed on disused software. (On August 1, the dormant system was accidentally reactivated when a new program was installed. As a result stock trades were multiplied by 1,000, causing wild swings in the share prices of almost 150 companies. So, now we know. The big question is, what are we going to do about it?)

A company called Knight Capital started losing literally $10 million [£6.4m] a minute when they switched on a computer program for trading on the New York stock exchange. (They ended up losing $440 million [£281m], and their shares have now lost 71pc of their value since the error.  The result is the trading company is awaiting a rescue package from a rival firm.  Someone should make a film of the whole thing, and call it "When algorithms collide".)

As of today Apple is the most valuable company in the world based on the value of its stock. (It has stolen this dubious crown from ExxonMobil as its stock price rose to $363.69 per share for a total "market capitalization" of $337.2 billion. ExxonMobil's stock price slipped to $68.03 per share to give the international petroleum giant a valuation of $330.8 billion. Of course how long Apple keep their crown, will depend on their next product.)

German regulators have banned the naked short-selling of shares. (Now this doesn't mean traders have to put clothes on (if they want a go to work naked day they can still do that). According to Wikipedia, naked short selling, or naked shorting, is the practice of short-selling stocks and shares without first borrowing the security or ensuring that the security can be borrowed, as is conventionally done in a short sale. When the seller does not obtain the shares within the required time frame, the result is known as a "fail to deliver". The transaction generally remains open until the shares are acquired by the seller, or the seller's broker, allowing the trade to be settled. Naked short selling can be used to fraudulently manipulate the price of securities by driving their price down, and its use in this way is illegal.[2] However, the practice is considered benign under certain circumstances, such as trading by market makers. As soon as the announcement was mad...

The Icelandic Stock Exchange fell by 76% in early trading as it re-opened after closing for two days last week.