Knight Shows How to Lose $440 Million in 30 Minutes - Businessweek: "Knight’s glitch happened at the exact moment that the NYSE Euronext (NYX) was rolling out its new Retail Liquidity Program, which the Securities and Exchange Commission approved last month. NYSE’s RLP is designed to attract the exact type of retail stock trading that market-making firms such as Knight have grabbed away from exchanges in the past few years. Hunsader doesn’t consider the timing a coincidence: “It looks like they were testing some new software to make sure they could compete with the NYSE’s RLP.” NYSE spokesman Richard Adamonis had no comment on Thursday. Big picture, the incident is the latest black eye for the convoluted U.S. market structure that’s dominated by computers and fragmented across a number of exchanges. Although not as damaging as the May 2010 flash crash, the Knight glitch highlights structural problems that have contributed to the botched Facebook (FB) initial public offering and sapped investor confidence."
