A technology error August 1st bombarded equity exchanges with erroneous orders, leading Knight, one of the largest traders of U.S. shares by volume, to the brink of insolvency as customers routed orders elsewhere and the shares plunged 75% in two days. The Jersey City, New Jersey-based company was rescued by an investor group the following week.
'In the aftermath of Knight Capital’s August 1 trading glitch, a primary concern has been the potential for permanent loss of business for the firm’s U.S. equities market-making unit', Patrick O’Shaughnessy, a Chicago-based analyst with Raymond James & Associates Inc., wrote in a note this month. He estimated that Knight’s market share of wholesale volume fell to 24.4% in August from 34% in July.
Hit the link below to access the complete Bloomberg article:
Knight Capital Reports Net Loss as Software Error Takes Toll
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image: © Justin Marty
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