Wednesday, August 1, 2012

Algorithmic trading gone wild, Knight Capital shares fell 24%

Business Insider

Word quickly spread through the trading community that the issues were centered around Knight Capital, a market maker.

Shares of Knight Capital, the market maker, immediately got slammed. They're down 24%!. People think the technical issues are originating from them.

Knight just released a statement about the issues to Business Insider, here it is:

"An initial review by Knight indicates that a technology issue occurred in the company’s market-making unit related to the routing of shares of approximately 150 stocks to the NYSE. Knight notified its market-making clients this morning to route listed orders away. The company’s OTC securities and trading in its other businesses are not affected. The company continues to review internally."

The NYSE has just issued a statement to Business Insider, here it is (emphasis added):

"The NYSE and NYSE MKT are currently reviewing irregular trading identified by our people and systems in 148 (140 NYSE/8 MKT) symbols between 09:30:00 a.m. and 10:15:00 a.m. ET today. The NYSE and NYSE MKT will provide updates with respect to these reviews. At this time, we believe NYSE systems and circuit breakers operated normally during this period, and we are working with all market participants on the issue."

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