Citigroup to acquire Knight’s derivatives markets business

Citigroup said it secured the deal with a purchase price of $225 million in cash, for which it will take on all the assets and operations that comprise the derivatives markets business, including electronic and floor-based market-making capabilities in listed equity and fixed-income options. Knight claims to cover nearly three quarters of all equity option order flow on most US options exchanges.

“The acquisition of Knight’s options business is consistent with our efforts to expand our derivatives market-making capabilities,” said James Forese, managing director and head of global equities at Citigroup.

Knight Trading is a provider of options execution and a specialist in about 500 option classes with three operating units, equity markets, derivatives markets and asset management. Knight is not selling its equity markets unit, which handles trading for Nasdaq over-the-counter stocks, nor its capital markets operation, which handles trading for the New York Stock Exchange and the American Stock Exchange securities.

“After a thorough review to explore the risks and rewards of both our derivatives markets business and the overall options industry, as well as the role of a derivatives business in Knight’s long-term strategy, management concluded that Knight’s strongest growth opportunities remain in our equity markets and asset management businesses, and that [the] derivatives market [business] has a better opportunity to reach its full potential as part of a larger company,” said Thomas Joyce, chief executive officer and president of Knight Trading. Proceeds from the sale will be used for a variety of corporate endeavors, including share repurchases, reinvestments in the business and acquisitions.

The deal is subject to regulatory approval.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here