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A New Vision at Knight

Traders Magazine, June 2005

Peter Chapman

Knight Trading is no more. At its annual shareholders' meeting in Jersey City last month, Knight Trading Group dropped the "trading" from its name and became Knight Capital Group. The move reflects the decline of Knight's traditional market making business and the rise of its institutional brokerage and hedge fund businesses, as Knight looks to transform itself into a new firm. "There's been too much focus on the market making side of the business," says Tom Joyce, Knight's chief executive. "We are more than that. We've developed a fairly robust institutional business and our hedge fund has seen solid growth." Knight is still the largest dealer of Nasdaq, listed and over-the-counter securities, but the business of wholesaling is past its prime. Government regulations and automated competitors have decimated the revenue picture. By contrast, Knight's institutional brokerage operation is steadily growing. It has nearly tripled its staff of sales traders and is winning plaudits from the buyside for covering more stocks than anyone else.

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