[jonah]

"Knight is also working with Goldman Sachs to help unwind the trades behind its extensive loss, according to people briefed on the matter.

"Goldman has agreed to buy, at a discount, the shares that the trading firm had accumulated. Such a move would help Knight by taking the portfolio off its hands and freeing up capital."

What does this mean? Why would GS do this? Why would Knight do this? Couldn't they just sell them on the open market at a better price instead?

[jkimmel]

Yes and no. Given the kind of volume Knight purchased during the faulty trades, it could be difficult to offload that many shares on the open market in a timely manner. Maybe those stocks are hot Monday, maybe they're not. Knight needs capital yesterday to keep floating, so they're likely looking to sell everything in one basket.

As for GS's motivation, they're buying at a discount. Due to the time sensitive nature of Knight's predicament, they're probably trading the portfolio to Goldman at a reduced rate. Unlike Knight, Goldman has the cash to sit on it for a while and sell the shares directly out into the open market, even if it takes a few days. Given the discount they bought the shares at, they're likely selling with a decent margin.

[jonah]

So GS is primarily the go-to since they're willing to leisurely unload stock they bought at a discount and they've got the cash in hand to do so. Makes sense.

[robryan]

Would be interesting if Goldman also made a stack off the original trades.