Knight Capital Presentation


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Presentation on Knight Capital and Market Making for an Investment Banking course at Thunderbird.

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  • Acquired institutional broker Donaldson & Co
  • Knight Capital Presentation

    1. 1. Knight CapitalgRoup<br />The Science of Trading<br />The Standard of Trust<br />
    2. 2. presentation overview<br />
    3. 3. Key Facts & figures<br />Headquarters: New Jersey<br />Market Cap: $1.67 Billion<br />Employees: 1,045<br />Structure:<br /><ul><li>Global Markets: Provide market access and trade execution services across multiple asset classes to more than 2,650 buy- and sell-side firms.
    4. 4. Asset Management: Managed capital under it’s Deephaven subsidiary.
    5. 5. Corporate: Financial management responsibilities.</li></li></ul><li>history<br />
    6. 6. global presence<br />
    7. 7. presentation overview<br />
    8. 8. Revenues & expenses<br />
    9. 9. Dynamic Capital Markets firm providing market access and trade execution services across multiple asset classes to buy-side, sell-side and corporate issuer clients.<br />Leading source of off-exchange liquidity in U.S. Equities and have greater share volume than any U.S. exchange<br />Leading market maker and liquidity provider in a wide variety of securities, commodities, and other financial products, including options, ETFs, and other derivatives<br />In 3rd quarter of 2009, Knight traded an average of 13.2 billion shares per day.<br />Business highlights<br />
    10. 10. Market making<br />Expectancy<br />Largest Provider of ETF Liquidity<br />Narrow Bid-Ask Spread<br />Depth & Size of Market<br />Derivative Valuation<br />SPY<br />Bigs<br />Minis<br />Cash<br />Notional Value<br />
    11. 11. presentation overview<br />
    12. 12. Consolidated Revenues for the first six months of 2009 increased $175.5 million, or 45.7%, year on year.<br />Consolidated Expenses for the six months of 2009 increased $160.8 million, or 60.3%, year on year.<br />Consolidated Pre-tax earnings for the six months of 2009 increased $14.7 million, or 12.5%, year on year.<br />As of June 30, 2009, Knight had $2.4 billion in assets, 69.9% of which consisted of cash or assets readily convertible into cash.<br />key Financials<br />
    13. 13. Financial ratios<br />
    14. 14. presentation overview<br />
    15. 15. s.w.o.t. analysis<br />STRENGTHS<br /><ul><li>Deals with nearly every US Equity and large number of global equities and fixed income, Foreign exchange, futures and options.
    16. 16. Deepening client networks and increases in the trade volumes.
    17. 17. All offices outside Head quarters at Jersey City, NJ are small operations which require less fixed investments.</li></li></ul><li>s.w.o.t. analysis<br />WEAKNESSES<br />Significant presence in Asset management through a 51% stake in Deephaven Holdings.<br />Deephaven produced losses due to the overall market conditions.<br />
    18. 18. s.w.o.t. analysis<br />OPPORTUNITIES<br /><ul><li>As a volume-based business, Knight benefits from high volumes of trading.
    19. 19. Movement into Hong Kong, Singapore and London expands customer base and diversifies market exposure.
    20. 20. Technology forms the basis of making profits on high volume trading. Without technology companies will lose their competitive edge.</li></li></ul><li>s.w.o.t. analysis<br />THREATS<br /><ul><li>Healthy Indices are critical to the firm.
    21. 21. More regulation on derivatives like options may impact the firm.
    22. 22. Competitors Include: Susquehanna International Group (SIG), Wolverine Trading, Chicago Trading Company, Consolidated trading, and Spear, Leads and Kellogg.</li></li></ul><li>presentation overview<br />
    23. 23. Companyoverview<br />
    24. 24. Summary<br />
    25. 25. presentation overview<br />
    26. 26. Group members<br />