A software glitch caused US global financial services firm Knight Capital, which claims to be “highly technology-driven”, using electronic trading to buy and sell stocks, to sell all stocks it bought on Wednesday morning on Thursday in the US, costing it pre-tax loss of US$440m.

Knight said the incident, which occurred at the opening of the New York Stock Exchange (NYSE), occurred after it installed trading software.

This “resulted in Knight sending numerous erroneous orders in NYSE-listed securities into the market”, it said in a press release issued on 2 August.

“Clients were not negatively affected by the erroneous orders, and the software issue was limited to the routing of certain listed stocks to NYSE.”

While the problem may be fixed, Knight said its capital base has been “severely impacted”.

Some analysts, including independent consultant for investment firms Adam Gefvert, who blogs on Seeking Alfa, have said Knight could not be heading towards bankruptcy.

“Why didn't the trading computer have an off switch? It went on for over 30 minutes. Confidence is now almost completely lost in the firm,” Gefvert said on his blog.

Today, Bloomberg said shares in the company were down 62.82%.

Knight, which lost more than what its revenue was in the Q2, 2012, was seeking new ways of earning capital for shareholders, including “financing alternatives to strengthen its capital base”.

It said this raised the likelihood of the company being sold or facing bankruptcy.

Knight said last night it would continue trading as usual.

Knight is based in New Jersey, and its Electronic Trading Group covers more than 19,000 US securities and has an average daily trade volume of more than US$21bn.