|JUNE 27, 2000|
|Knight Securities' Program to Enhance Execution Capabilities in OTC Market without Dealer Intervention Now Operational in All Nasdaq Securities|
JERSEY CITY, New Jersey (June 27, 2000) - Knight Securities, a subsidiary of Knight Trading Group, Inc. (Nasdaq: NITE), has implemented fully its new trading program in which executions of certain Nasdaq orders automatically occur at the midpoint between the national best bid/offer (NBBO). As first described in Knight's May 8, 2000 press release, incoming market and marketable limit orders will execute automatically, under the program, against any opposite-sided market and marketable limit orders at the midpoint of the then existing NBBO. Knight, having successfully completed the pilot test phase of this program, offers this enhanced execution service to its broker-dealer clients in all Nasdaq securities.
"We are constantly searching for ways to help our broker-dealer clients meet their fiduciary obligation to provide best execution for their customers' orders," said Michael T. Dorsey, Senior Vice President, General Counsel and Secretary of Knight Trading Group. "This trading service that Knight Securities offers in all Nasdaq securities demonstrates our ability to marry advanced technology with superior trading methodology. The new program will help bolster confidence among our broker-dealer clients that Knight is the market center best equipped to deliver best execution solutions in Nasdaq stock orders."
This new trading algorithm works as follows: assume that Knight has in its "buy rack" orders representing 5,000 shares to purchase WXYZ stock, and then receives an order to sell 3,000 shares of the same WXYZ stock. If the NBBO for WXYZ was 20 - 20 1/8 per share at the time the sell order was received, Knight would automatically match the 3,000-share incoming sell order with the orders representing the first 3,000 shares of WXYZ in its "buy rack" at 20 1/16 per share, the midpoint of the then existing NBBO. Promptly upon the execution, Knight would report the trades to the Automated Confirmation Transaction Service (ACT) as riskless principal. Knight would continue working to fill the orders representing the remaining 2,000 shares to buy WXYZ. Knight believes that this new service provides more opportunities for price improvement, more immediacy, and more enhanced liquidity in the execution of Nasdaq orders.
Knight Trading Group, Inc., headquartered in Jersey City, NJ, is a market center that seeks to empower investors by providing them with opportunities for price improvement, immediacy and enhanced liquidity in their OTC and listed securities transactions. It has the power to commit capital for market orders, and it also maintains the largest limit order book in the OTC market. Knight traded 81 billion shares in 1999, a volume behind only those posted by Nasdaq and the New York Stock Exchange (NYSE). It also is one of the largest execution destinations for securities transactions placed via the Internet. Knight is a charter member of Fortune magazine's "e-50 Stock Index," an elite collection of companies that are shaping the new Internet-based economy. In addition, Knight, which has been in operations for fewer than five years, is ranked by Forbes magazine as one of the 500 most profitable public companies in the U.S. Ultimately, Knight plans to enable the global trading village to trade all types of equity securities and options at anytime, from anywhere in the world. More information about Knight can be obtained at www.knighttradinggroup.com or at www.knight-sec.com.