HSBC's Childe: Back-Testing Key to Mitigate Algo Failures

Knight Capital's algorithmic 'glitch' cost it over $400 million in a matter of minutes, and nearly caused the firm's collapse.

Responding to a question from the audience during the Canary Wharf, London-hosted event, which indirectly referenced the almost terminal losses incurred by Knight Capital during a trading glitch this summer, one panelist emphasized the importance of utilizing correct testing criteria and information for algorithmic strategies.

"Back-testing is a topic in its own right, and those issues stem from operational risk, technology risk, and a cultural basis," said Barry Childe, head of research and

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