m*******y
发帖数: 904 | 1 【 以下文字转载自 Chinook 俱乐部 】
发信人: marchjuly (marchjuly), 信区: Chinook
标 题: Nobody talking about Knight?
发信站: BBS 未名空间站 (Fri Aug 3 01:31:58 2012, 美东)
http://dealbook.nytimes.com/2012/08/02/knight-capital-says-trad
Knight Capital Says Trading Glitch Cost It $440 Million
$10 million a minute.
That’s about how much the trading problem that set off turmoil on the stock
market on Wednesday morning is already costing the trading firm.
The Knight Capital Group announced on Thursday that it lost $440 million
when it sold all the stocks it accidentally bought Wednesday morning because
a computer glitch.
The losses are threatening the stability of the firm, which is based in
Jersey City. In its statement, Knight Capital said its capital base, the
money it uses to conduct its business, had been “severely impacted” by the
event and that it was “actively pursuing its strategic and financing
alternatives.”
The losses are greater than the company’s revenue in the second quarter of
this year, when it brought in $289 million.
“With the events of yesterday, you have to question if this is the
beginning of the end for Knight,” said Christopher Nagy, founder of the
consulting firm KOR Trading.
T
The Knight Capital Group's automated stock program flooded the market with
millions of trades.
Knight Capital Group
Shares of Knight Capital closed down 63 percent, at $2.58, on Thursday. On
Wednesday, the shares fell 32 percent.
The problem on Wednesday led the firm’s computers to rapidly buy and sell
millions of shares in over a hundred stocks for about 45 minutes after the
markets opened. Those trades pushed the value of many stocks up, and the
company’s losses appear to have occurred when it had to sell the overvalued
shares back into the market at a lower price.
The company said the problems happened because of new trading software that
had been installed. The event was the latest to draw attention to the
potentially destabilizing effect of the computerized trading that has
increasingly dominated the nation’s stock markets.
Until this week, Knight had been one of the biggest beneficiaries of the
evolution of the market, helping clients trade in and out of stocks at high
speeds. The firm was responsible for 11 percent of all trading in American
stocks between January and May, according to Adam Sussman at the data
company Tabb Group.
On Thursday, Knight said that none of its customers had been hurt by the
errant trades.
Still, the trading glitch is especially uncomfortable for Knight’s chief
executive, Thomas Joyce. Mr. Joyce, 57, has been at the helm of the company
since 2002. Now that his firm is in the spotlight, it’s embarrassing for Mr
. Joyce because he was a vocal critic of the hiccups that upended the
Facebook public offering in the middle of May. At the time, Knight suffered
$35.4 million in losses because the trades the company was making in
Facebook shares weren’t registered by Nasdaq for hours.
Knight was founded in 1995 and went public in 1998 after quickly becoming
one of the largest middle men, or market makers in the stock market. Knight
founded DirectEdge, a company that is now the fourth-largest stock exchange
operator in the United States. Knight sold stakes in DirectEdge to other
Wall Street firms and now owns only a minority stake in the company.
Knight has become known for executing trades on behalf of retail brokers
like TD Ameritrade and ETrade. It is the major player in the business along
with UBS, Citibank and the Chicago firm Citadel.
Mr. Nagy of KOR Trading, who used to work for TD Ameritrade, said that large
retail brokers were likely to find alternatives if Knight were unable to
continue taking in new business. But he added that Knight had “unmatched”
connections with smaller banks and brokers, and those smaller firms may have
trouble immediately finding a replacement for Knight.
Knight had recently been increasing its business and reported having 1,418
employees as of the end of the first quarter of this year in 21 locations
around the world. |
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