Lioness Associates, Inc.

Economic & Corporate Risk/Yield Reports

August 9, 2012  -- Knight Capital Group (KCG) Risk/Yield for 2012

Knight Capital encountered difficulties early this month with the rollout of new software for their trading operations (see article).  The "new" software managed to "accidentally" buy stocks as noted in the referenced article.

The KCG IPO 2012 Risk/Yield graph does not show any obvious risk at the 8/1/2012 period when this software glitch happened to the company.  Checking the IPO astrological configurations in more detail did bring up some "difficult" areas but nothing to explain the drastic event.

In this case, the Incorporation chart is also being used.  Note the "IPO" chart is an outside view of the company while the "INC" chart is an inside view of the company.  The KCG INC 2012 Risk/Yield and Delta Core/Transient graphs clearly depict the momentum into risk for the 8/1/2012 event. 

While it is not possible to identify what would have happened in this situation if the company had known they were in a "high risk" period, it might not be amiss to assume that they may have taken more precautions in the software rollout or
 — maybe not.


Disclosure as of 8/9/2012 - Knight Capital Group (KCG) is not part of our portfolio at this time.