Knight looking to unload market-making operation

A buyer could be their knight in shining armor

Shares of Knight Capital got a lift Monday after rumors surfaced over the weekend that it may look at selling its market-making operation. The unit, which is a leader in the exchange traded fund (ETF) trading business, is the company’s largest and most profitable unit. Sources close to the matter say the firm has been approached by at least two rivals about purchasing the operation, although they would not confirm if the sale is imminent.

Proposals are expected to be received over the next week or two from Getco LLC and Virtu Financial LLC and other buyers could come forward, the source said. Knight’s market-making business remains attractive despite a trading glitch in August which forced Knight to unload a massive position at a loss. The end result was a Q3 loss of $389.9 million and a more than 75% decline in Knight’s share price.

Knight Capital Group (KCG : NYSE : US$2.82), Net Change: 0.33, % Change: 13.25%, Volume: 21,757,769

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