who is liable for a loss due to a software problem ?

are They liable ?

  • yes

    Votes: 2 4.2%

  • no

    Votes: 46 95.8%
  • Total voters
    48
I worked in IT 35 years before retiring. In an IBM database installation their software chewed up our data. IBM later admitted the error was their mistake. Their mistake was costly to us because of the huge recovery we had to do that shut computing off for three days.

In a meeting with our corporate lawyers about the possibly of legal action the legal group said that disclaimers like the ones IBM made us sign were not entirely legal. He stated if we could actually prove IBM was negligent a judge might listen and make their disclaimer non admissible. However, proving negligence in software usage is an almost an impossible task. IBMs defense would be that we were the problem and we failed to use their software correctly. That is why most retail trading software is filled with bugs. Retail software developers have very little incentive to fix the software unless it costs them money.
 
Quote from Rabbitone:

Retail software developers have very little incentive to fix the software unless it costs them money.
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What is the most reliable and stable software out there?How do you think?
 
Quote from Rabbitone:

That is why most retail trading software is filled with bugs. Retail software developers have very little incentive to fix the software unless it costs them money.
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That is really generalizing it. ALL software has bugs. "Filled with bugs" is extremely subjective, yet you are stating it as fact. That is plain wrong.

So is your claim about incentives. Developers that have a stake in the software (own it) have a huge incentive in fixing the bugs. It helps keep the clients. Litigation is not the only cost of the bugs.

If developers were forced to be financially liable for the bugs, your cost of the software would skyrocket. And you can forget free software.
 
Quote from Wallace:

do you agree that chart/order entry program authors, brokers' usually only ? account
software, and data feed providers including exchanges are liable for any and all losses
that are a direct result of a problem with Their software ?
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Do I agree...... software, data feed and exchanges are liable ? If I did I couldn't trade, because, as mentioned it's all in the "agreements." Add ISPs to the list :mad: I had that issue today and pulled the plug on my trading in disgust. However, when I walked out my door fuming, there stood the "comcast man" wanting to sell me an upgrade on my cable service. Needless to say he caught raw edge of my wrath! FYI, he had a paper showing me I could get 105 Mb/s download speeds ...... 30 seconds before I walked out my door I did a speed test and my speed was .44 YES .44Mb/s. I was not kind, but I did tell him I'd pay double if he could guarantee me HALF that speed 24/7 ..... of course he couldn't.
 
Quote from Wallace:
do you agree that chart/order entry program authors, brokers' usually only ? account
software, and data feed providers including exchanges are liable for any and all losses
that are a direct result of a problem with Their software ?
More...

I have had such problems three times over the last 3 years, and my broker has always refunded what I was claiming for. [Don't ask me to name the broker ... I won't.] In my case, I think the key has been that the amounts I was claiming were small relative to the commission income I generate for the broker. All were related to stop loss orders not being executed at (or even near) the correct price. Also, in each case I could show that I had submitted the stop loss order at such and such a time, and that the order had not been executed when it should have been, and hence my loss.

If you really want to roll your sleeves up, your broker agreement should contain a clause that lays out the process for dispute resolution. As is true in lots of areas of business (not just trading, and brokering), if you show a clear willingness to push your counterparty into having to resolve the matter with you by that route, they may decide the expense and hassle are not worth it relative to what you are claiming, and cave in ...
 
Agree that we would have to bear liability. How many would want to even go through the lawyers and courts process? Better ways to use your time unless the error wiped out a large account, which should not happen with proper risk management anyway.

Sometimes, stuff happens. Trading the ES yesterday, by the time the clock indicated a 3rd bar should have formed on the chart, it was still on the 2nd bar. Price was moving nicely on the DOM. What to do? Put on a trade which might be totally unreal? Was the current bar real, or was it 1 bar behind?

I disconnected from my broker, immediately reconnected and lo and behold, the missing bar was there and everything was in sync with the clock. Too late to catch the move, but there were others.

I don't even want to think what would have happened if I had not noticed the problem and put on a trade that turned out to be a mess. Data feed from a provider via my broker, software from another vendor, take your pick.
 
Software providers don't take any responsibility.

I posed similar query to NinjaTrader earlier this year and received the reply:

"no software company is going to take responsibility for trades executing or not executing as expected. Although we are confident in our software and it is widely used for auto-trading, neither NinjaTrader or any of our competitors would ever take financial responsibility for trade execution."
 
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