Knight Securities Loses Clearing Relationship with

Knight Securities Loses Clearing Relationship with Lightspeed Trading

Believe it or not I'm not just a penny stock trader, I actually daytrade  the big boards and some futures. I just got an email from my broker, Lightspeed, saying that they are no longer clearing through Knight.

This of course is a result of Knights half billion dollar sized loss due to a "failed trading algorithm" which I think will lead to them getting shut down within the next 12 months. I had a friend with Bear Stern back in 2009, and after their debacle all of their clearing, custodial, and asset management business dumped them and luckily he was in the first wave of job cuts and got a job at a huge hedge fund.

If iHub is really owned 30% by Knight, look for an asset sale by this time next year.

August 21, 2012

Dear Customer,

As you are aware, Knight Capital Americas LLC (“Knight”) is the Futures Commission Merchant (“FCM”) through which trades for your account are cleared. This notice is to inform you that Lightspeed Trading LLC (“Lightspeed”) has decided to make a change in their clearing arrangements.

Accordingly, effective upon the close of business on September 7, 2012, your account will be transferred to R.J. O’Brien Associates LLC (“RJO”), 222 S Riverside Plaza, Suite 900, Chicago, IL 60606. If you have any questions for RJO, contact Jane Obermoeller at 866-438-7564.

There is no need on your part to take action for this transfer to take effect. Under the provisions established by CFTC Rule 1.65 your account will be transferred to RJO at the close of business on September 7, 2012 unless you object to the transfer.

Please be advised that you are not required to accept the proposed transfer and may, instead, instruct Knight to liquidate your account, have it transferred to another Futures Commission Merchant, or keep your account at Knight. If you do not want your account to be transferred to RJO, you must notify Knight Customer Service at 600 W Chicago, Suite 775, Chicago, Illinois 60654, telephone 800-548-8245, (fax) 608-348-5986 prior to September 6, 2012. If you allow your account to be transferred, you will receive a separate notice from Lightspeed containing your new account number, funding instructions, and account access instructions.

If you have any questions regarding this matter, please contact your Lightspeed representative at 888-577-3123 / RMs@lightspeed.com, RJO or Knight.

Sincerely,

Knight Capital Americas LLC
Futures Division