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Banking, finance, and taxes

Knight Capital’s Fat-Finger Trading Problems

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By Jon C. Ogg Updated Published
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Photo by Spencer Platt/Getty Images
Knight Capital Group (NYSE: KCG) may have just been the latest firm to create trading issues that were somewhat akin to the Flash Crash of 2010, or at least akin to fat-finger trades that cause market problems from time to time. This is highly frustrating to investors, and frankly it is no wonder that each time a market aberration of this sort comes about it often takes some investors and traders out of the stock market permanently.

The good news is that stocks are back in positive territory ahead of the FOMC results today. The bad news is that some individual stock volatility around the open was said to be the result of an aggressive algorithmic trading program at Knight Capital.

Both CNBC and Bloomberg have not received any formal comments, other than that the trading firm is looking into trading issues. Though this is often called fat-finger trading, it can also be machines causing an error.

RadioShack Corp. (NYSE: RSH), Quicksilver Resources Inc. (NYSE: KWK) and Dole Food Company Inc. (NYSE: DOLE) are all up on the day, and these were three of the stocks reportedly involved in the fat-finger trading.

Knight Capital Group Inc. (NYSE: KCG) is down 8.4% at $9.46 on the day, but had been as low as $9.09 this morning.  Be advised that the prior 52-week range was $9.92 to $14.00.

JON C. OGG

Photo of Jon C. Ogg
About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. a673b.bigscoots-temp.com.

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