Responding to a sudden trading loss is never easy, but Knight Capital Group deserves high marks for handling the turmoil around a technology error that disrupted equity markets and produced heavy losses for the firm.
Knight sent a shiver through markets yesterday morning after an errant trading 
program sent erroneous orders for hundreds of stocks. In a statement this morning, Knight estimated its losses at $440 million and said it was pursuing strategic options for strengthening its capital base.
Knight thus far has done two things well: it made its chief executive available in a widely seen interview on Bloomberg this morning and it took full responsibility for the error. It wisely avoided throwing blame toward the NYSE, which is introducing a new trading system for retail investors that Knight and other traders have criticized.
This story is far from over, and the focus now is whether Knight itself can survive. With the shares off some 70 percent since the problem emerged, Knight has work to do to restore its capital base and investor confidence. Timely, informed communication will be an essential part of its plans.