Quote from Chicago_CTA:
You sound so bitter, atticus. Have they harmed you personally by providing liquidity?
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I can see why people hate Goldman Sachs, with its unfair advantages, bailouts, political cronyism, etc. But Knight?!
It was one of the few good names left on the STreet.
As someone who trades equities, I certainly wouldn't call Knight a "good name". Their core equity trading business model is based on little bribes paid to retail brokers for "muppet" order flow. (This, and B/D internalization, is where the nastiest of the "subpennying" comes from, by the way.)
Re: Goldman comparisons: at least Goldman has real talent at its core competencies (deal making, and trading bespoke instruments). Knight, IMO, does not. I've long doubted that Knight would be able to trade its way out of a paper bag, if it had to compete in a fair, lit market without the little bribes. Yesterday's action comfirms this. If a company can't succeed in trading even with the PFOF/wholesaler scam advantage on its side, it truly have no excuse to exist.
Knight had a good game in the 90's, but their time is over, and they're struggling to hold on to a business model that results in unfair, untransparent, and fragmented equities market space. In fact, Knight actively and aggressively works to dissuade legislators and the SEC from making the market more transparent and fair (e.g., the proposed "Trade At" rule would make the PFOF scam a lot more difficult).
I feel sorry for those who work there -- I'm sure there are many quality employees -- but the US capital markets would be far better off without the entire PFOF/wholesaler/subpenny scam, and better off without Knight, if that's the only game they know how to play.
