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The Knight Capital Group was an American global financial services firm engaging in market making, electronic execution, and institutional sales and trading. [1] With its high-frequency trading algorithms Knight was the largest trader in U.S. equities, with a market share of 17.3% on NYSE and 16.9% on NASDAQ. [2]
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On August 1, 2012, Knight Capital Group LLC (“Knight”), a leading financial market maker, experienced a major failure in the operation of its automated routing system for US equity orders.
The errant software sent Knight on a buying spree, snapping up 150 different stocks at a total cost of around $7 billion, all in the first hour of trading. Under stock exchange rules, Knight would have been required to pay for those shares three days later.
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