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Knightmare on Wall Street, The Rise and Fall of Knight Capital and the Biggest Risk for Financial Markets is a thrilling minute-by-minute account of the terrifying hours following Knight Capital's August 1, 2012 trading debacle, with news-breaking research regarding the firm's 17 years of tumultuous existence as an independent company. Knightmare on Wall Street is the defi Knightmare on Wall Street, The Rise and Fall of Knight Capital and the Biggest Risk for Financial Markets is a thrilling minute-by-minute account of the terrifying hours following Knight Capital's August 1, 2012 trading debacle, with news-breaking research regarding the firm's 17 years of tumultuous existence as an independent company. Knightmare on Wall Street is the definitive behind-the-scenes story of Knight Capital. 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. Knightmare on Wall Street provides a fascinating account of what it took to elevate the firm 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.


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Knightmare on Wall Street, The Rise and Fall of Knight Capital and the Biggest Risk for Financial Markets is a thrilling minute-by-minute account of the terrifying hours following Knight Capital's August 1, 2012 trading debacle, with news-breaking research regarding the firm's 17 years of tumultuous existence as an independent company. Knightmare on Wall Street is the defi Knightmare on Wall Street, The Rise and Fall of Knight Capital and the Biggest Risk for Financial Markets is a thrilling minute-by-minute account of the terrifying hours following Knight Capital's August 1, 2012 trading debacle, with news-breaking research regarding the firm's 17 years of tumultuous existence as an independent company. Knightmare on Wall Street is the definitive behind-the-scenes story of Knight Capital. 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. Knightmare on Wall Street provides a fascinating account of what it took to elevate the firm 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.

33 review for Knightmare on Wall Street: The Rise and Fall of Knight Capital and the Biggest Risk for Financial Markets

  1. 4 out of 5

    Tim O'Hearn

    My weekend in judging books by covers: this is a bad one. The writing is atrocious, and that's a real shame because this is both a story worth telling and a story well researched. Grammar, style, and sentence structure are at times bad if not outwardly wrong, my main gripe being an abundance of useless adjectives. Character development is actually good and I found the biographies of most major players to be more captivating than the story itself. Unfortunately, minor characters suffer from a sti My weekend in judging books by covers: this is a bad one. The writing is atrocious, and that's a real shame because this is both a story worth telling and a story well researched. Grammar, style, and sentence structure are at times bad if not outwardly wrong, my main gripe being an abundance of useless adjectives. Character development is actually good and I found the biographies of most major players to be more captivating than the story itself. Unfortunately, minor characters suffer from a stiff and haphazard chronology along the lines of "Currently is a lawyer. Went to Harvard. Went to a high school. Is Catholic. Played baseball in high school. Ran 24:11 in the Chase Corporate Challenge in 2011." The author's obsession with the Chase Corporate Challenge is hilarious. First of all, the race really isn't much of a challenge and a white collar professional taking part in it tells you absolutely nothing unless the character happens to be winning the race. It was for some reason deemed necessary to highlight that one participant had slowed down between his first race and his most recent one seven years later. None of the other people were winning the race either. They were quite slow. The Knightmare part of the book is also a Knightmare to read. With timestamps, it's supposed to be a gripping play-by-play, but it's about as exciting as the roller coaster at your local county fair, presuming you don't live in a county that has a large budget for roller coasters at the county fair. Not quite worth the price of admission but better than spending your day with the guy selling deep-fried Oreos. To those on the technology side, this book contains absolutely nothing by way of what actually went wrong. You get a cursory high-level overview: 1. No failsafe/kill switch 2. Something-something-something Powerpeg software 3. The firm spent 35 minutes being idiotic after discovering the issue. More comprehensive technical details have been described to me much more succinctly by people who I don't necessarily regard as succinct or as KCG tech stack experts. Knight has an intriguing history and, today, there could be at least a few more chapters appended to this book. I don't think that all this research was for naught, but this was an underwhelming book written for an audience that doesn't exist. See this review and more on my blog

  2. 5 out of 5

    Kurt Vandebroek

  3. 4 out of 5

    Sam

  4. 4 out of 5

    Frank Grampone

  5. 4 out of 5

    Ryan

  6. 4 out of 5

    Rey

  7. 5 out of 5

    Chartwell Speakers & Literary Agency

  8. 4 out of 5

    Valery Bartashevich

  9. 4 out of 5

    Rutger

  10. 4 out of 5

    Varun

  11. 5 out of 5

    Marcelle Strati

  12. 5 out of 5

    dan hebb

  13. 4 out of 5

    Ingvards

  14. 5 out of 5

    Martha

  15. 4 out of 5

    Dennis Pimpernel

  16. 4 out of 5

    mark marriott

  17. 4 out of 5

    Jessica Smiley

  18. 5 out of 5

    O E P DE LASZLO

  19. 5 out of 5

    Spartak Tukuli

  20. 4 out of 5

    Lindi Lesomo

  21. 5 out of 5

    Anh Tuan

  22. 5 out of 5

    Jith N sasi

  23. 5 out of 5

    Trond Halvorsen

  24. 5 out of 5

    Sabrina

  25. 4 out of 5

    Estefanui

  26. 4 out of 5

    Atika

  27. 5 out of 5

    Alabi Rasheed

  28. 5 out of 5

    Sjenith+Aug1

  29. 4 out of 5

    Miguel Rodriguez

  30. 4 out of 5

    Jeremy M Daunoy

  31. 5 out of 5

    Judita

  32. 4 out of 5

    kendra okios

  33. 5 out of 5

    ActiveUSCitizen

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