This morning I hear the news of Knight Capital, a market maker and electronic executer for many large clients such as Vanguard, Fidelity and TD Ameritrade, which are the no 1 in funds and brokerage in US, suffered a $440 mil trading loss due to a software glitch:
As one of the leading market makers in U.S. stocks, Knight is among the firms that are critical to smooth, orderly trading. Market makers match orders from buyers and sellers and often provide liquidity by stepping into the market themselves.
The speed at which Knight has unraveled has been particularly unnerving for investors and markets. It resulted from problems with the firm’s trading software that sent bogus, rapid-fire trades into the market for 45 minutes on Wednesday and left Knight with big losses on numerous stocks it bought at inflated prices.
Knight is in talks with Silver Lake Partners-backed trading firm ...
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