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Wednesday, February 13, 2013

Getco profits tumbled in the first nine months of 2012, (NYSE: KCG)

Profits at Getco Holding Co, the high-speed automated trading firm that is buying Knight Capital Group, dove in the first nine months of 2012 on soft equity volumes, low market volatility and increased competition. But Getco also forecast its profit will rise, more than quadrupling in 2013 from last year's dismal showing and nearly doubling again by 2018, as it takes advantage of better technology and un-specified strategic initiatives.Those details were disclosed in a filing Wednesday that offers a rare peek at the secretive world of proprietary trading, where large firms use their own money to purchase and sell securities. The filing is part of Getco's bid to win shareholder approval for its purchase of Knight.Net income at Getco, which is currently a private company but is going public through the $1.4 billion Knight deal, plunged 82 percent to $24.6 million in the first three quarters of 2012 compared to the same period in 2011, according to a regulatory filing made public on Wednesday.The filing also gives some insight for Getco's motivations in buying Knight. Competition in the electronic trading market, along with an increase in internalized order flow - when brokers fill customer orders among themselves, from their own inventory, cutting out the exchanges - added to Getco's profit declines, the filing said.

Knight Capital Group, Inc. is a United States-based company that provides financial services. Shares of KCG traded higher by 0.54% or $0.02/share to $3.72. In the past year, the shares have traded as low as $2.24 and as high as $13.54. On average, 4161450 shares of KCG exchange hands on a given day and today's volume is recorded at 6221396.