Knight buys algorithmic firm EdgeTrade

Knight Capital Group is acquiring EdgeTrade, an agency broker whose FAN algorithm aggregates liquidity from off-exchange trading venues, in a $59.5 million deal, including $29.5 million in cash and stock.
“We focused on EdgeTrade because of the client base they had, and they were developing some very clever (technology) products that were getting rapid adoption,” Knight Chairman and CEO Thomas Joyce told analysts in a conference call today.
“Their FAN algorithm is an aggregator of access to dark pools. … Everyone is trying to come up with new and better ways to access dark pools.”
Knight executes trades in multiple asset classes — equities, options, futures, fixed income and foreign exchange — for both Wall Street firms and asset managers. The firm also co-owns the execution platform Direct Edge ECN along with Goldman Sachs and Citadel Derivatives Group, which can use EdgeTrade algorithms.