Can Knight Capital (KCG) Be Saved?
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While the situation with Knight Capital (NYSE: KCG) is severe and still very much in-flux, speculators are betting Friday morning that the massive market maker can be saved after this week's trading error which resulted in $440 million in losses.
Knight Capital executives have taken actions into their own hands this morning and are telling brokers that they have secured a credit line and told clients to route orders to them as normal. No details were available on the size of the credit line although reports from Dow Jones said the credit line will allow it to operate for the day.
Just yesterday, major clients like TD Ameritrade and E*Trade stopped routing orders to Knight, which could be a death knell in the trading business which relies so much on trust. Knight competitors have been getting the calls instead. If this continues it could be the death of the company. However, if clients again feel comfortable sending orders their way the company may be able to be saved.
Shares of Knight Capital last traded at $3.15, up 22 percent.
Knight Capital executives have taken actions into their own hands this morning and are telling brokers that they have secured a credit line and told clients to route orders to them as normal. No details were available on the size of the credit line although reports from Dow Jones said the credit line will allow it to operate for the day.
Just yesterday, major clients like TD Ameritrade and E*Trade stopped routing orders to Knight, which could be a death knell in the trading business which relies so much on trust. Knight competitors have been getting the calls instead. If this continues it could be the death of the company. However, if clients again feel comfortable sending orders their way the company may be able to be saved.
Shares of Knight Capital last traded at $3.15, up 22 percent.
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