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CNBC Software Flaw Worth $1 Million?
Strudelkugel writes "BusinessWeek tells the story of one obsessive fan who unraveled a software glitch worth one million dollars. Jim Kraber was a regular CNBC viewer, and when the opportunity arose he took the 'Million Dollar Portfolio Challenge' very seriously. At one point, he was spending 12 hours a day on the contest, using three computers to trade 1,600 different portfolios in a theoretical stock game. His efforts got him into the top 20 finalists, but in the last round of trading he noticed some unusual patterns. 'One trader had a stream of near-perfect picks, consistently placing huge bets on shares that soared in after-hours trading. Kraber suspected the trader and perhaps others were getting help from someone who was changing their picks after the stocks' increases — and he quickly notified CNBC ... Kraber says CNBC rebuffed him at the time, but now it looks like he may have been right.'"
Looks like whoever created the CNBC datapool was only faking real time stock quotes. Most likely, they didn't build the infrastructure right and so that had to cache the quotes for a little while before they were available on the site. If others had access to the tick streams before the results were available from the cache, then they would have an advantage and essentially be able to rig the game. Seems like CNBC's claims about real time data could be throwing a lot of people off in their investing.
Seems Kraber was certainly violating the spirit of the contest, if not the letter. Relying on 1600 portfolios and the law of averages to "win"? Seems like he's pissed that somebody else found a better, easier way to cheat.
The fact is, no matter how calculated a risk is... some people have more information at hand when doing the "calculations." Therein lies the profit making opportunity for the other trader, on the back of this first guy.
It is kind of funny though, the guy who ran 1600 seperate portfolios is now complaining that somebody else was exploiting the system ...
As I interpreted the article, players were explicitly permitted to have more than one portfolio at a time. From the article:
If there is no limit, than it would be inaccurate to claim that it was against the rules or an exploitation of the rules to run 1600 separate portfolios.
Behind every Marketing person with an idea, there is a programmer that has to implement it. I don't think you can blame the technical issues you quoted on bad marketing... just poor programming.
Yes, I'm in Marketing... and yes, I also program (semi-professionally). However, I realize that I am not the person best qualified for doing "mission-critical" projects like that (mission-critical to a Marketing program, in this case).
MadCow.
I used to have a sig, but I set it free and it never came back.
Apparently you are unfamiliar with hedging. Shorting can be used as a mechanism to eliminate certain types of risks depending upon the relationship between two assets. Of course there are other hedging mechanisms that can be used in a similar role, such as options and futures, but shorting may be the specific thing you want. Futures require a margin account as well, but you'd be sort of silly to complain about their existence. I'm sort of curious what your opposition to speculators is rooted in, as the "taking money from people who produced it" talk doesn't seem very meaningful in general.
No, we wouldn't. I guarantee that I could manage hundreds of portfolios and not make money on any of them.
It's why I stay out of the stock market, except for my managed TIAA CREF account and the few Google shares I bought at the IPO.
You are welcome on my lawn.
"Imagine, right... nononono, listen, listen. Just imagine... if all this was real money!!!
This has the same kind of feel to it.
And I have to ask, if the guy's prepared to spend 12 hours a day doing this with "Monopoly money", even sacrificing his professional accreditation studies in the belief that he might end up as the best market-player in over 300,000 and win $1m... why the hell isn't he just playing the stock-market??
Meta will eat itself
Even though some people have access to rumours earlier and have a better circle of friends, you can get yourself a Bloomberg and Reuters terminal and here you go you will have the same real-time news than the other traders !
...
It often comes down to the fact that some people are better at spotting/evaluating opportunities
Don't you know it is now both immoral and criminal to think beyond the next quarterly report?
Lemme guess...
The programmer probably needed about 3 months to put together the project,
but Marketing had already set the dates, and he/she/it only had about 2 weeks
to push it out.
But it's not marketing's fault that they set a deadline without any knowledge,
it is the programmer's.
emt 377 emt 4
Keep all of your decision-making on the server where it belongs. Let the client be a view to the server, and validate input. But don't trust the client with any control of the process. It only results in problems like this.