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
02 Dec
ZEAL
For en gangs skyld og kun denne ene gang svarer jeg dig.   Jeg anser dine indlæg omkring Zealand græ..
40
05 Dec
NETS
Handles nu under kurs 115; absolut en af de mest pinlige IPOs i nyere dansk børs-historie.   Selskab..
32
06 Dec
NVO
Det meddeles her til aften fra UBS hovedkvarter at man har med øjeblikkelig virkning har hjemsendt e..
31
04 Dec
VWS
Det er lettere at se hvad DU ikke fatter. USA har, med et flertal af stemmer i kongressen, underskre..
30
03 Dec
VWS
Der er delte meninger om aktiekursen på Vestas. Vi har jo alle hver vores måde at vurdere virksomhed..
26
04 Dec
 
Du forveksler din såkaldte anstændighed og ansvarlighed med naivitet og misforstået godhed. Grenen v..
18
02 Dec
ZEAL
Novo Nordisk og Zealand er nu med i den helt absolutte front i kombinations behandling af diabetes -..
18
07 Dec
VWS
Teknisk set er du en klovn
17
05 Dec
 
Hej. Jeg kan se, at flere allerede er i gang med at skændes denne herlige mandag morgen. Jeg vil dog..
17
03 Dec
ZEAL
I ugens løb kom det frem, at Svenska Handelsbanken havde sænket anbefalingen på Zealand og at Aktieu..
17

G4S plc UK DK : Statement re Extension to UK asylum accommodation contract

08/12/2016 11:32:35
8 December 2016 Extension to UK asylum accommodation contract G4S, the leading global integrated security company, is pleased to note the Immigr..

HSBC Bank Plc : Form 8.5 (EPT/RI) - London Stock Exchange Group Plc

08/12/2016 10:51:58
FORM 8.5 (EPT/RI) PUBLIC DEALING DISCLOSURE BY AN EXEMPT PRINCIPAL TRADER WITH RECOGNISED INTERMEDIARY STATUS DEALING IN A CLIENT-SERVING CAPACITY ..

Most read news

  • 24 hours
  • 48 hours
  • 1 week
1
Fingerprint Cards adjusts its 2016 revenue forecast
2
Fingerprint Cards communicates guidance for 2017
3
Dynapower and Samsung SDI Launch Integrated Storage Solution for the Behind-the-Meter Energy Storage Market
4
Nexeo Solutions, Inc. Reports Fourth Quarter and Fiscal Year 2016 Financial Results
5
Novartis' Ultibro® Breezhaler® improved lung function and COPD symptoms after direct switch from previous treatment

Buy and sell signals

  • Trend
  • Moneymachine

Copyright Euroinvestor A/S 2016   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.
 
08 December 2016 21:59:02
(UTC+00:00) Dublin, Edinburgh, Lisbon, London
Version: LiveBranchBuild_20161205.1 - EUROWEB1 - 2016-12-08 22:59:02 - 2016-12-08 21:59:02 - 1000 - Website: OKAY