KNIGHT CAPITAL GROUP LAUNCHES EUROPEAN ALGORITHMIC SUITE

Posted April 21, 2009

JERSEY CITY, N.J. and LONDON – Knight Capital Group Inc. (Nasdaq: NITE) has introduced agency algorithmic trading and smart order execution strategies developed specifically for the European equity marketplace.

Knight’s EdgeTrade Algorithmic Suite for European equities is powered by FAN, a smart order-execution algorithm which sources liquidity from multiple exchange and MTF (multi-lateral trading facility) destinations simultaneously while adapting to market conditions in real time and re-circulating orders to where executions are occurring.

With knowledge and experience from the success of FAN in the US, Knight has reengineered and customized its smart order execution technology for European equities, taking into account the microstructure and nuances of each market destination. FAN also allows for single-ticket clearing.

“Liquidity fragmentation in Europe is accelerating, with new market destinations forming and liquidity increasingly migrating away from the primary exchanges,” says Bradley Duke, Managing Director of Institutional Electronic Sales in Europe at Knight Capital Group. “Traders need tools to simplify the process of finding actionable liquidity. FAN is a dynamic smart order execution algorithm, adapting to market conditions in real time and routing orders to pools of liquidity where executions are most likely to occur. It allows clients to complete trades efficiently with minimum market impact and with opportunities for high fulfillment rates and price improvement. Knight also recognizes the complexities of equity clearing in Europe, so FAN allows clients to complete trades across multiple market centers on just one ticket.”

The EdgeTrade Algorithmic Suite includes smart order execution algorithms based on FAN. Smart order execution leverages real-time and historical data to help clients execute orders by seeking out available liquidity among fragmented displayed and non-displayed markets.

“Knight committed significant technology and other resources to capture the nuances of both the European marketplace as a whole and the complex microstructures of individual markets,” Duke says. “Knight is connected to all of the primary exchanges and MTFs throughout Europe and expects to continue adding significant liquidity destinations as they come on line.”

Clients can access the EdgeTrade Algorithmic Suite through Knight Direct, Knight’s multi-asset class execution management system, as well as through a number of third party execution and order management systems via Knight Direct’s FIX capabilities. The algorithms and Knight Direct are recent electronic trading complements to Knight’s existing London-based trade execution services.