Seeking Alpha

Knight Capital (KCG) held around $7B of stocks at one point during its IT malfunction last week,...

Knight Capital (KCG) held around $7B of stocks at one point during its IT malfunction last week, but managed to sell $2.4B by the end of the day, the WSJ reports. Knight then offloaded the rest of the portfolio to Goldman Sachs after turning down a bid from UBS, but still took a loss of $440M from the whole disaster.
Comments (3)
  • One has to wonder how extremely inept these guys at Knight Capital are. They left the algo going for 30 unbelievable minutes. Pulling the plug takes me 3 seconds max. Throws an extremely poor light on their intellect, their tendency to overestimate themselves and their inability to implement decent controls and fail-safes (i.e. overestimating their capabilities). I wonder if the rest of the industry would fare any better under similar circumstances. I have the sneaking feeling they wouldn't. But yes, lets let algos do the trading for us. What could ever go wrong?
    9 Aug 2012, 06:21 AM Reply Like
  • These guys at Knight seemed to have handled the situation properly. They made arrangements, attracted their clients back and now they can build. Even the shorties will stick for this one.
    11 Aug 2012, 03:12 AM Reply Like
  • Gary, I agree with you,

     

    KCG did what they had to do to keep the operation going. It is just a shame the shareholders are the ones to suffer for their mistake.

     

    The penalties need to be placed on those involved, not those that support the company! There would be less mistakes that way!
    11 Aug 2012, 04:49 PM Reply Like
DJIA (DIA) S&P 500 (SPY)