I think it is worth saying that no one saw that de-peg coming. Absolutely no one. Sure there are some crazies who saw it coming, but that same camp is still taking for the HKD-USD de-peg. It was a shock to everyone on Wall Street. I am a bit surprised that the Swiss National Bank didn't tip off their own banks before doing it. Both UBS and Credit Suisse were seriously caught off guard when it happened.
That's fair. I wasn't close enough to see how "surprising" it was. The point stands that it looks nothing like HFT active trading risk. Knight Capital created such amazing training material for the industry. What went wrong with their software, how many decisions or practices could have prevented or narrowed the risk. What went wrong at trade time, how they had a clear window to pull the plug but died due to indecision and inaction.
