Knight Market-Making Unit Says It Had ‘Technical Issue’
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Computers sent more than 100 stocks into trading spasms just after U.S. markets opened, whipsawing investors and pushing shares of Knight Capital Group Inc. down by the most ever on speculation it was to blame.
Knight, which helped execute almost $20 billion of equity transactions a day in June, plunged more than 30 percent in record volume. The errors were caused by a malfunction in a so-called trading algorithm, according to a person at the company who asked to remain anonymous. The New York Stock Exchange said that after reviewing 140 securities, it would cancel transactions in six that occurred during the height of the volatility starting at 9:30 a.m. in New York.