Abstract: A circular knitting machine has a device for cutting and holding elasticized yarns, such as spandex. The device enables the yarn, when detached from the knitting needles, to be cut while holding the free, cut end of the yarn firmly in position so that the yarn later may be easily reattached to the knitting needles when it is desired to reintroduce the spandex yarn into the knit fabric. The device includes a pair of jaws movable in unison, one jaw being effective to grip the yarn and the other jaw thereafter being effective to cut the gripped yarn.