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Knight Capital Group Inc Annual Report 2010

Knight Capital Group Inc Annual Report 2010

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Published by Arvin Chiong
Annual Report
Annual Report

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Published by: Arvin Chiong on Jan 23, 2013
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Knight Capital Group, Inc.2010 Annual Report
Knight Capital Group, Inc. Annual Report
Knight Capital Group, Inc.2010 Annual Report
Knight Capital Group (NYSE Euronext: KCG)
is a global fnancial servicesfrm that provides access to the capital markets across multiple asset classesto a broad network o clients, including buy- and sell-side frms andcorporations. Knight is headquartered in Jersey City, N.J. with a growingglobal presence across the Americas, Europe and the Asia-Pacifc region.For urther inormation about Knight, please visit www.knight.com.
 Knight operates a global, multi-asset class platform for buy-siderms, combining sophisticatedelectronic trading with sales andtrading. The rm’s U.S.-, Europe-and Asia-based teams engagein trading across equities, xedincome, foreign exchange, optionsand futures on behalf of mutualfunds, hedge funds, pension funds,insurance companies, banks, trustsand endowments.
Knight is one of the world’sleading market makers, servingsell-side rms by providingliquidity in a broad range ofsecurities. The rm engages inmarket making in equities, optionsand foreign exchange, andprovides access to trading in xedincome, on behalf of full-serviceand online brokers, private wealthmanagers, registered investmentadvisors, nancial advisors, banksand bulge bracket rms.
Knight offers an array of servicesto corporations. The rm is thelargest market maker in thousandsof U.S. equities and serves asa Designated Market Maker onthe NYSE and NYSE Amex. Inaddition, Knight arranges non-dealroadshows for undercoveredcorporate issuers and providescapital markets services to issuersand private companies.
Knight Capital Group, Inc.2010 Annual Report
Thomas M. JoyceChairman & CEO
In 2010, we fell short of our own expectations as a divergence in marketconditions forestalled a more immediate and robust turnaround in the globalcapital markets.The protracted economic uncertainty contributed to a decline in retail andinstitutional trading activity. Average daily share volume of U.S. equities fell13.2 percent
year-over-year while average daily dollar volume of U.S. corporatebonds fell 2.5 percent
, with the corresponding spreads narrowing 45–60 percent
.The VIX averaged just 22.6 in 2010, which is well below recent years.In contrast, the Dow Jones Industrial Average, S&P 500 and NASDAQ Compositeindexes all registered double-digit gains on the year.Nevertheless, during the course of the year, Knight maintained industry-leadingmarket share in U.S. equities trade volumes and developed in-house clearingcapabilities. We addressed the renewed competition in institutional xed incomewhile adding clients and growing trade volumes in retail xed income.Knight reported record foreign exchange trade volumes and greatly expandedoptions market-making and trading capabilities. In addition, we continued tosteadily expand the rm’s global presence through London and Hong Kong.
While Knight generated positive results in 2010, we are determined toimprove performance.
On a consolidated basis:
• Revenues decreased 1.2% to $1.15 billion in 2010 from $1.16 billion in 2009• Pre-tax earnings declined 35.6% to $150.0 million in 2010 from $232.8 millionin 2009• Pre-tax margins were 13.1% in 2010 compared to 20.0% in 2009Pre-tax earnings and margins were impacted by approximately $40 million ofinvestments in clearing, options, global expansion, research and capital markets.

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