Knight Trading Group (NASDAQ:NITE) makes a market for stocks, meaning it supports bid and ask prices by buying and selling on the open market. In exchange, it receives a commission on each transaction, so when trading volume increases, so do its fortunes.

In the third quarter, increase they did. Knight's stock is jumping after management said third-quarter results will stomp estimates, reaching $0.16 to $0.21 per share, well above an $0.11 per share consensus. Trading volume increased on the consumer level and, as importantly, with institutional clients who Knight said are "recognizing [our] strength as an execution-only provider with a vast pool of liquidity."

In addition to increased volume, Knight's asset management arm -- which manages money for institutions and wealthy clients -- has strengthened. Knight manages $1 billion, but trading revenue still accounts for a vast majority of its business.

Finally, decreased costs also contributed. This final point is likely to prove true for many firms. Most have cut costs during recent hard times, such that when sales pick up again, profits are likely to be stronger than they would have been in prior years. This is part of the reason to anticipate steep earnings growth, in general, with an economic upturn.

Knight did not update third-quarter revenue guidance. Second-quarter results saw $159 million in revenue and $14.8 million net income, or $0.13 per share, so the third quarter's earnings could rise up to 61% sequentially. The company's upbeat guidance today also lifted brokerage stocks, including Ameritrade (NASDAQ:AMTD), E*Trade (NYSE:ET) and Charles Schwab (NYSE:SCH).

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