The mistake cost around $225 million.
[1] http://www.foxnews.com/story/2005/12/09/typing-error-causes-...
There are a lot of simultaneous errors going on here...
If you want to validate whether an order makes sense or is a "good idea", the place to do it on the client.
Of course, these type of algorithms typically take far more than microseconds to run—but that's fine, as long as they take the same time for everyone.
Self and team damage is often turned off (on games I've played, I'm not really a big gamer). That would seem to correspond to blocking a sell order that represents more shares than you could possibly have?
Expecting otherwise would be like expecting eBay to determine that your buy it now price is too low or that you don't have enough inventory on hand to fulfill your listings.
If the software had brought up a warning with something like "you are selling each share for less than 610000 +- 10000, please confirm", this could have been avoided.
It was an error and a mistake.
In fact, error is a synonym for mistake: https://www.google.com/search?q=mistake&oq=mistake&aqs=chrom...
In the medical world, many people have been killed by mistakes in prescriptions, despite everything going through computers and multiple humans checking it.
The problem was that the machines were too sensitive to mistakes and trained the humans to ignore warnings. They also didn't distinguish mild warnings from extreme warnings. E.g. a prescription being 2x larger than recommended, or 100x larger than recommended, which are very different situations. A well designed interface might have different shades of red for different levels of severity. To give an indication if something is really wrong.
In a way she is correct, I saw her many times freaking out at a dialog box and calling me to "fix it", and it was just some absolutely useless "warning", but I also saw her many times clicking "ok" on a important message without reading and then wondering why things broke.
This is similar to how Github forces you to type the name of a repository when you try to delete it.
You can also configure a threshold such that the "hardcore" prompt kicks in only if the system detects that the user is trying to do something unusual, i.e. sell a stock for much cheaper than it is.
Back in the old days, I feel the broker would have gone to the market makers, said there was an error, and gotten out of the trade.
Which is why I said you would enable it based on a threshold and/or only on unusual threads. These systems are capable of extremely complex decision-making at very high frequency. Surely something like "sell 610,000 shares for 1 yen" would have stood out as strange.
That way, a user doesn't have to know what value to use. You can also set this once in settings and never see it again, except as a report.
Many world equity markets now have daily up/daily down limits a certain percentage above and below the previous day's closing price. Others will pause trading for a short period of time if short-term price moves are abnormally large.
Many equities markets only allow direct connections to the market from brokerages licensed by the country's financial regulators. These days, brokerages often implement their own sanity checks on many order flows. Joe's Live Bait and Stock Trading generally isn't connecting directly to any equity trading venue.
I'm curious what the effect would be of a market switching to second-price blind auctions every 5 minutes if a stock moves up or down 5% on the day. There are academic papers showing theoretical stability advantages of second-price auctions. Trading at the second-highest bid when the market is down more than 5% and at the second-lowest ask when the market is up should help to attract one-sided liquidity in the direction of market stability.