Archive for August, 2012

U.S. Court of Appeals 7th Circuit Puts Brokerage Accounts At Risk

Friday, August 17th, 2012

On Thursday, August 9th, 7th Circuit Appeals Court ruled on the lawsuit between Sentinel Management Group, Inc. and its customers. The ruling, awarded in favor of Sentinel, now puts brokerage accounts in the US at risk. (more…)

Are High Frequency Trading Robots Just Full Of Air?

Sunday, August 12th, 2012

An “Air Pocket” stock is by definition, any security that experiences a sudden drop in share price, much as an airplane experiences turbulence causing it to drop unexpectedly. Generally, air pockets come as a result of negative corporate fundamentals, such as a quarterly earnings misses, FDA announcements, or SEC investigations. But now, high frequency trading robots are creating air pockets for so many of the Market’s equities, turning investing into a “Buyer Beware Market.” (more…)

Computer Decision Making Costs Knight Capital Group $440 Million

Sunday, August 5th, 2012

This last Thursday Knight Capital Group, Inc. disclosed that due to a computer “glitch”, a technology “snafu”, the company lost $440 million. Their shares sank 63% and closed at $2.58. And it took just 45 minutes. $440 million was almost twice what the revenue for the second quarter. The immediate question is, how can a computer glitch nearly ruin a company? Don’t they believe in stop losses? (more…)