New
York City, NY, USA (August 13, 2013) -- A book launch party is
planned in New York City for Knightmare on Wall Street, The Rise and
Fall of Knight Capital and the Biggest Risk for Financial Markets.
Now exclusively available at http://www.KnightmareonWallStreet.com,
Knightmare on Wall Street provides a fascinating account of what it
took to elevate Knight Capital to the cusp of the retail investing
revolution of the late 1990s, to struggle through booms and busts,
and to bring the firm down, to end up ultimately being ignominiously
bought up by a competitor.
Edgar
Perez, the celebrated author of The Speed Traders
(http://www.TheSpeedTraders.com)
and global speaker on the topics of high-frequency trading (HFT) and
investing, brings again a masterpiece for the trading and investing
class with this thrilling minute-by-minute account of the terrifying
hours following its August 1, 2012 trading debacle, with
news-breaking research regarding Knight Capital’s 17 years of
tumultuous existence as an independent company.
The
firm, founded by Kenneth Pasternak and Walter Raquet in 1995, had
seen its fortunes change as U.S. regulators made a series of changes
in the structure of financial markets and computers were
progressively expanding their share of trading. The Flash Crash, the
infamous 1,000 point drop of the DJIA on May 6, 2010 (the largest
one-day point decline in history), illustrated how market structure
problems could almost instantaneously cascade from one market
participant to the rest.
Thomas
Joyce, CEO of Knight Capital since 2002 and an unapologetic advocate
of electronic trading, had been scornful of those companies that
struggled to keep up with ever-changing stock markets. So it was
certainly shocking that at 9:30 A.M. on August 1, 2012, right after
the markets opened for the day, Knight Capital began issuing an
unprecedented number of erroneous orders into the market, due to an
error in installing new software. No rogue trader or regulatory
change; operational risk was passing the bill to Knight Capital and
becoming the biggest risk in the financial markets.
Knight
Capital announced later a staggering loss of $440 million. What
followed after this shocking announcement were several rounds of
desperate conversations with a number of vulture players who had
smelled opportunity and were readying themselves to pick up
bargain-priced pieces. On August 6, 2012, Joyce confirmed that Knight
Capital had struck a deal with Jefferies, TD Ameritrade, Blackstone,
GETCO, Stephens, and Stifel Financial, staving off collapse days
after the trading mishap.
While
Knight Capital was back in the game, its limping recovery quickly
prompted hungry competitors to bid for the entire company. On
December 19, 2012, the board decided to accept an acquisition
proposal from GETCO rather than Virtu Financial. For GETCO, acquiring
Knight Capital represented a gigantic fast forward step. For Knight
Capital, it was the end of its wild ride as an independent entity.
Perez
(http://www.MrEdgarPerez.com)
is widely regarded as the preeminent global expert in the specialized
area of high-frequency trading. He is author of The Speed Traders, An
Insider's Look at the New High-Frequency Trading Phenomenon That is
Transforming the Investing World, published in English by McGraw-Hill
Inc. (2011), published in Mandarin by China Financial Publishing
House (2012), and Investasi Super Kilat: Pandangan Orang dalam
tentang Fenomena Baru Frekuensi Tinggi yang Mentransformasi Dunia
Investasi, published in Bahasa Indonesia by Kompas Gramedia (2012).
Perez is course director of The Speed Traders Workshop, How High
Frequency Traders Leverage Profitable Strategies to Find Alpha in
Equities, Options, Futures and FX (Hong Kong, Sao Paulo, Seoul, Kuala
Lumpur, Warsaw, Kiev, New York, Singapore, Beijing, Shanghai). He
contributes to The New York Times and China's International Finance
News and Sina Finance.
Media
Contact:
Julia
Petrova
Media
Relations Coordinator
Knightmare
on Wall Street
516-761-4712
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