KCG Is Said to Plan Exit From Retail Options Market Making

(Bloomberg) — KCG Holdings Inc. plans to exit a business that handles options trades from retail brokerages by the end of February, according to a person with knowledge of the matter.

The Jersey City, New Jersey-based firm is trying to sell technology related to the unit to other market-making firms, said the person, who asked not to be named because the process isnt public. Sophie Sohn, a spokeswoman for KCG, declined to comment.

Brokers routinely strike deals with companies like KCG, which pay for the right to execute trades from retail investors because theyre considered particularly profitable. TD Ameritrade Holding Corp. has such an arrangement with KCG for options orders, according to regulatory filings.

KCGs competitors include Citadel LLC and Susquehanna International Group LLP. A new entrant — a joint venture between trading firm IMC Financial Markets and broker Convergex Group LLC — appeared in October.

KCG will still trade options, just not for retail brokers, according to the person. The company will continue to make markets for retail brokers in stocks, bonds, exchange-traded funds and currencies, the person said.