Major brokerage firm Knight Capital could be on its death bed after a trading glitch due to new software resulted in $440 million in losses. The total is greater than the company’s revenue in the second quarter of this year, $289 million, and “severely impacted” its capital base, the firm said in a statement. “With the events of yesterday you have to question if this is the beginning of the end for Knight,” says Christopher Nagy, founder of the consulting firm KOR trading. The glitch happened when new software began rapidly buying and selling millions of shares in over 100 stocks, driving up their values. When the company had to sell the overvalued shares back into the market a lower price, its losses skyrocketed.
OOPS Brendan McDermid, Reuters / Landov