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Tim Quast
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We're All HFTs Now

In this guest commentary, author Tim Quast looks back at the history of HFT and how the market has evolved to where many firms now fit the definition of high-frequency trader.

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October 4, 2007

Rule Will Hurt OTC Dealers

By Peter Chapman

Knight Capital Markets, the largest trader of over-the-counter equities, expects the new Manning rules to take a bite out of its earnings.

Tom Joyce, Knight's chief executive, says Manning will cut its pretax profits by $10 million, down to $15 million, next year. By way of comparison, the trading house made $94.5 million in pretax earnings in the first six months of this year.

"That's not good, certainly," Joyce told analysts recently. "It's certainly not that bad, either, all things considered."

Manning, which bars traders from trading ahead of limit orders they hold will be applied to OTC Bulletin Board and Pink Sheets stocks starting next month. Knight controls more than half of all trading in OTC names.