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Don’t Blame Technology for Knight Capital’s Blunder: Pro

If you’re among the throngs calling for reform because of the Knight Capital trading debacle, you may be missing something.

On Wednesday, Knight landed in the center of anasty controversy after a so-called "technology issue" affected the way in which Knight routed about 150 stocks listed on the New York Stock Exchange. The resulting loss is expected to total $440 million.

In the wake of these developments, many pros including OptionMonster Jon Najarian have been demanding changes in the parameters that govern high speed trading

But Irene Aldridge, managing partner at ABLE Alpha Trading says those demands are uncalled for. Although the root of the problem was a technology glitch – she doesn’t see events as a technology issue in the least.

She sees it more like bad driving.

“Somebody fell asleep at the wheel while driving down the highway at a super high speed,” she says in a live interview on CNBC’s Fast Money Halftime Report. “It was a human who didn’t notice that huge amounts of incorrect trades went through – and they didn’t notice for 45 minutes.”

“45 minutes!” she exclaims again to emphasize the point. “Nobody put on the brakes on for 45 minutes. It’s not a fat finger error it’s a fat brain error.”

“There should have been someone sitting in front of the computer – someone should have said ‘Oh my God our risk limits are breached!’”

And in the same way that a bad driver is held accountable for his or her actions, Aldridge says Knight Capital should be held accountable, but nothing more than that.

“When people fall asleep at the wheel, we take them off the road and they’re held responsible.” The car isn’t held responsible. And the highway isn’t held responsible, just the person.

At the end of the day, she says technology has made the market a better place – it’s improved efficiency and driven down costs. Blaming technology for Knight Capital’s mistake seems misguided to her.

“A process should have been in place and it wasn’t there,” Aldridge says. Period. End.

Posted by CNBC's Lee Brodie

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Trader disclosure: On August 2, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; ; Jon Najarian is long call spreads in GMCR; Jon Najarian is long call spreads in OCN; Jon Najarian is long call spreads in SBUX; Jon Najarian is long call spreads in YELP; Jon Najarian is long call spreads in MON; Jon Najarian is long put spreads in HPQ; Jon Najarian is long put spreads in KCG; Jon Najarian is long CME; Jon Najarian is long CBOE; Jon Najarian is long CIGX; Jon Najarian is long GLUU; Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long MCD; Stephanie Link is long DD; Stephanie Link is long GE; Brian Kelly is long SPY Puts; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU

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