03 August 2012 09:51

Knight Capital fingers tech glitch for stock market chaos; faces $440m pre-tax loss

 

Knight Capital issued a statement that a "technology issue" at its market making unit was behind the volatile price movements in 140 shares yesterday that forced Nyse Euronext to cancel trades.

In early morning trading prices in dozens of stocks went haywire, reviving memories of the May 210 flash crash. After reviewing 140 stocks, Nyse Euronext eventually cancelled orders in six.

With the finger of blame pointing at it and a faulty algorithm, Knight Capital confirmed that it was behind the chaos, saying: "This morning, a technology issue occurred in Knight's market-making unit related to the routing of shares of approximately 150 stocks to the Nyse."

The Securities and Exchange Commission has confirmed it will be looking at the issue, saying: "As is our practice, we are closely monitoring the situation and in continuous contact with the Nyse and other market participants."

Shares in Knight - which, according to Bloomberg, helped execute almost $20 billion of equity transactions a day in June - closed yesterday just shy of 33% down, at $6.94.

In a statement on Thursday, Knight says: "As previously disclosed, Knight experienced a technology issue at the open of trading at the Nyse yesterday, August 1st. This issue was related to Knight's installation of trading software and resulted in Knight sending numerous erroneous orders in Nyse-listed securities into the market. This software has been removed from the company's systems.

"Clients were not negatively affected by the erroneous orders, and the software issue was limited to the routing of certain listed stocks to Nyse.

"Knight has traded out of its entire erroneous trade position, which has resulted in a realized pre-tax loss of approximately $440 million. Although the company's capital base has been severely impacted, the company's broker/dealer subsidiaries are in full compliance with their net capital requirements. Knight will continue its trading and market making activities at the commencement of trading today. The company is actively pursuing its strategic and financing alternatives to strengthen its capital base."

Post comment

Related debate

  • 1 week
  • 1 month
  • 1 Year
18 Dec
VELO
Gennemgang og analyse af Veloxis' søgsmålJeg har brugt min aften på at "hygge" mig med Veloxis netop..
66
20 Dec
 
Det er meget velbeskrevet i talrige bøger og artikler, at tilstandene i store dele af verden udenfor..
49
18 Dec
VWS
Normal 0 21 false false false DA X-NONE X-NONE ..
30
18 Dec
GEN
Med FDA´s godkendelse af Amgens (Micromet) godkendelse af Blincyto (blinatumomab), fik vi for alvor ..
27
18 Dec
PNDORA
Nu har jeg købt og solgt aktier i 8 år og var os her på debatten for 4-5 år siden men har glemt mit ..
24
18 Dec
 
  Jeg er gratist, jeg læser med på EI uden at skrive. Det er sjældent, man kan få gratis lunch; men ..
13
21 Dec
MY
Det er jo en ejendommelig debat, der er kommet ud af det spørgsmål. Der er jo ingen, der nogensinde ..
11
15 Dec
GEN
Genmab har afholdt bestyrelsesmøde og valgt at give bestyrelse, direktion og ledende medarbejdere op..
11
20 Dec
VWS
Det er nemt at lave en hurtig statistik over perioden fra medio December til medio Januar, på basis ..
10
20 Dec
VWS
Kære Mena: Her definationen af et JV: http://da.wikipedia.org/wiki/Joint_venture   "Parterne er også..
10

Tech Companies Send Criticism Along With NSA-Related Data -- Update

04/02/2014 00:06:00
By Danny Yadron Technology companies including Google Inc. and Microsoft Corp. released new figures on the amount of data requests they received from U.S. ..

U.S. Hot Stocks: Hot Stocks to Watch

03/02/2014 14:07:00
Among the companies with shares expected to actively trade in Monday's session is Herbalife Ltd. (HLF). Herbalife Ltd. (HLF) raised its fourth-quarter outl..

Pfizer Study Meets Primary Endpoints

03/02/2014 13:05:00
Pfizer Inc. (PFE) said Monday that a Phase 2 trial of its advanced breast cancer treatment met its primary endpoint. Pfizer said a study comparing the effec..

Most read news

  • 24 hours
  • 48 hours
  • 1 week
1
Delta Lloyd requests court ruling on DNB measures
2
EAM Solar ASA : Minutes from EGM 19 December 2014
3
Soitec updates its 2015 and 2016 financial guidance
4
TiGenix submits its pivotal US trial design for Cx601 to the FDA for Special Protocol Assessment
5
Lundbeck to research link between immune system and brain diseases

Copyright Euroinvestor A/S 2014   Disclaimer and Terms of Use
Quote information is delivered by Interactive Data.
Data is delayed 15-20 minutes according to the distribution agreements set by the different exchanges.
 
22 December 2014 09:51:39
(UTC) Dublin, Edinburgh, Lisbon, London
Version: LiveBranchBuild_20141219.2 - EUROWEB2 - 2014-12-22 10:51:39 - 2014-12-22 09:51:39 - 1000 - Website: OKAY