Reply to: What would you do?

[Buffoon]

buffoon - can you clarify - is this product created and owned by the unamed unfortunate or is it a third party application that is sold on with modifications? clearly, any option to pass the buck to the originators would be worth persuing.

do you, sorry, does your friend have any other enhancements or updates that could be applied that could be used to mask the bad news?

It's the former. It was originaly used by a fund manager that was bought out and they now use their own stuff. The idiot who made the error in the first place (6 years ago!) was ..... No buck passing on this one.

Nobody has complained in all these years. Loads of new stuff is being written but that when the bug came to light.

I'm going to wait until Uncle Ben moves rates and slip it in then.

[DS23]

...but suppose that you had discovered a serious bug in one of the low levels of a product that you earn your living from....[/list]

buffoon - can you clarify - is this product created and owned by the unamed unfortunate or is it a third party application that is sold on with modifications? clearly, any option to pass the buck to the originators would be worth persuing.

do you, sorry, does your friend have any other enhancements or updates that could be applied that could be used to mask the bad news?

[malvolio]

7. Release the fix as an enhancement that improves accuracy to 7 or 8 places

Can you predict what the likely effect of the increase in accuracy will produce? Would you say be able to take a position that would be personally beneficial?

Ahem 2 - check out my earlier reply...

[BlasterBates]

Yes but from what I understand this will affect there exposure and all their decisions on hedging.

...hmm normally traders spot things like that.

But if your system is "Gospel" ....oooh

Yup keep quiet.

[vista]

Ahem

7. Release the fix as an enhancement that improves accuracy to 7 or 8 places

Can you predict what the likely effect of the increase in accuracy will produce? Would you say be able to take a position that would be personally beneficial?

[Buffoon]

From the CBOT:-

eg Futures
Contract Size
$5 million


Deliverable Grades
N/A


Tick Size
$20.835 per 1/2 of one basis point (1/2 of 1/100 of one percent of $5 million on a 30-day basis rounded up to the nearest cent).

On this deal your mistake would cost them $20000

FECK! You're not one of my users? Nah, can't be, only got two in the UK. Where are based?

[Buffoon]

The thing is it isn't just one interest rate is it ? its like all of them, wrong.

How is it used ?

Does money change hands, because of this ?

Do traders wade into the market big time based on your incorrect rate ?

I mean money market deals might no be too bad but what about options ?


Options move 10 or 20 times the level of the underlier.

If they do and a client is down a few grand he won't be happy.

Oh heck, getting warmer!

Yep, the bug is in the short end of the curve and throws the whole thing off. Since it's a yield curve, it's used for loads of things.

Does money change hands because of this - indirectly. This system is analysis, it's up to them to make decissions. Doesn't mean they would lose money. It just means that the analysis is a bit off.

I think I'm going to slip it in with the next interest rate change.

[BlasterBates]

From the CBOT:-

eg Futures
Contract Size
$5 million


Deliverable Grades
N/A


Tick Size
$20.835 per 1/2 of one basis point (1/2 of 1/100 of one percent of $5 million on a 30-day basis rounded up to the nearest cent).

On this deal your mistake would cost them $20000

[EternalOptimist]

The thing is it isn't just one interest rate is it ? its like all of them, wrong.

How is it used ?

Does money change hands, because of this ?

Do traders wade into the market big time based on your incorrect rate ?

If they do and a client is down a few grand he won't be happy.

a few grand ???
tell your 'friend' to get it diverted into an offshore and to keep his engine running

[BlasterBates]

The thing is it isn't just one interest rate is it ? its like all of them, wrong.

How is it used ?

Does money change hands, because of this ?

Do traders wade into the market big time based on your incorrect rate ?

I mean money market deals might no be too bad but what about options ?


Options move 10 or 20 times the level of the underlier.

If they do and a client is down a few grand he won't be happy.

[shoes]

Head butt a wall until you forget that you discovered the bug.

[Buffoon]

"US Fed moves" - sounds like some sort of bank? I say report them to FSA for not noticing sooner. I mean, its the users fault for not noticing.

Back in 1992 there was a news story that IRS products had increased 10-fold in traded notional amount in a year and could lead to trouble. It was a bank of england report. However, a few months later a friend of mine at HSBC was summoned by his boss and told he had generated all the extra increase by a coding mistake. He kept his job but realized he had no career and had to move. to UBS.

You are warm. This bug is nothing like as bad as 10 times, and my clients are nothing like as big as HSBC!

It's only a tiny error i.e. interest rate of 5.5500% instead of 5.5456%, but if it's on a billion dollars.

"They" could get away with putting "their" hand up with all but one of the clients. That one is a total arse. NY based but he is not a septic. Keeps ramming the fact that he has a PhD down my throat. Make me refer to him as Dr …. So what, one of my other users is a Professor and I call him Mike. I think he has some inferiority problems. If he was so bloody cleaver why didn’t he spot the bug?

[malvolio]

Launch a new version that is accurate to 7 places...?

[andy]

option 2 seems to be the safest

[PRC1964]

I take it "they" have insurance? If not I'd seriously consider getting a lot and quickly.

Option 5 sounds tempting, but if it were ever discovered you'd be spending a long time inside.

I'd probably go for option 2 and work out a way to sell them a new version that is correct to more digits than you currently claim.