Revenue Increase of 24% from Third Quarter to Fourth Quarter 2001 Impacted by Improved U.S. Equity Markets, Business Adjustments to One-Penny MPV Environment

     Fourth Quarter 2001 vs. Fourth Quarter 2000

     *  35% decline in revenues
     *  62% decline in net income
     *   9% decline in U.S. equity trades executed
     *  74% increase in U.S. equity shares traded

     Year ended 2001 vs. Year ended 2000

     *  46% decline in revenues
     *  85% decline in pro forma net income
     *  18% decline in U.S. equity trades executed
     *  21% increase in U.S. equity shares traded


                                           Fourth Quarter     Fourth Quarter
                                                2001              2000

    Revenues ($)                             162,319,927       251,327,596
    Net income ($)                            13,477,037        35,250,165
    Diluted EPS ($)                                 0.11              0.28
    U.S. equity trades executed               30,899,567        33,957,354
    Average daily U.S. equity trades             482,806           539,006
    U.S. equity shares traded             43,099,613,471    24,797,134,511


                                                 YTD               YTD
                                                 2001              2000

    Revenues ($)                             684,712,375     1,257,309,748
    Pro forma net income ($)                  38,525,567       259,011,602
    Pro forma diluted EPS ($)                       0.31              2.04
    U.S. equity trades executed              117,294,785       142,731,615
    Average daily U.S. equity trades             472,963           566,395
    U.S. equity shares traded            135,038,125,423   112,052,786,805

"2001 was the most challenging year in the history of Knight Trading Group, but it allowed us to prove that the Knight business model can prevail through extraordinary obstacles presented by a difficult market environment and an evolving market structure," said Kenneth D. Pasternak, Chairman and Chief Executive Officer of Knight Trading Group. "The bear market continued to affect our returns, but our U.S. equities business is responding well to rightsizing and cost-control efforts, as well as to modifications in our trading algorithms and inventory management practices following the introduction of the one-penny Minimum Price Variant. In Europe, an equivalent market slowdown affected the extensive operations we built during a robust market, and we made painful but necessary headcount reductions to keep the business poised for the market's recovery."

Non-operating charges in the fourth quarter were $2.3 million on a pre-tax basis, or $1.5 million on an after tax basis, equivalent to $0.01 per share. These charges relate primarily to a write-down of excess real-estate capacity.

U.S. equity trades executed and U.S. equity shares traded for the fourth quarter of 2001 increased 27% and 37%, respectively, from the third quarter of 2001.

The Company's market-making activity relating to options generated total net trading revenue of approximately $22.9 million during the fourth quarter of 2001, versus $42.5 million during the fourth quarter of 2000.

Deephaven's asset management business generated $5.0 million in asset management fees during the fourth quarter of 2001, down 54% from $10.9 million in the same period a year ago.

"The management team in place today was instrumental in taking Knight through 2001's challenges while remaining focused on new opportunities for growth," Mr. Pasternak said. "With great comfort, I can retire from the Company to which I have devoted eight years of my life, knowing that the Board of Directors is conducting the most exhaustive search for the best CEO, and that the current generation of Knight managers is capable of continuing the Company's success."

Mr. Pasternak continued, "The next Knight CEO can leverage the Company's proven business model and core strengths -- scale, capacity and technology - and build upon them. Our equities business survived the challenges of 2001 and emerged healthy, while in options, we continue to integrate recent acquisitions and refine our efforts in the dynamic derivatives industry. Going forward, Knight will continue to develop opportunities in institutional trading as well as overseas, where the Company is honing its strategy for careful and smart international development."

Knight is the liquidity center that offers superior execution services to its broker-dealer and institutional clients in over-the-counter (OTC) and listed equity securities, and in equity options. In so doing, Knight helps its clients meet their fiduciary obligation of obtaining best execution for the securities orders that they route on behalf of their customers. Knight also maintains an asset management business for institutional investors and high net worth individuals through Deephaven Capital Management LLC.

Knight has the power to commit capital for market orders and also maintains one of the largest limit order books in the OTC market. The Company has approximately 1,300 employees worldwide and is one of the largest destinations for stock orders placed via the Internet. Knight traded 135 billion shares in the year 2001, a volume behind only those posted by Nasdaq and the New York Stock Exchange (NYSE). Ultimately, Knight plans to enable its clients to trade all types of equity securities and options at any time, from anywhere in the world. More information about Knight can be obtained at http://www.knighttradinggroup.com.

Interested parties who wish to access Knight's Webcast should go to http://ir.ccbn.com/ir.zhtml?t=NITE&s=2400&item_id=577342 by 8:45 a.m. Eastern Time, and follow the instructions listed there. Access to the Webcast, copies of this earnings release and other information on the Company can be obtained via the Internet at http://www.knighttradinggroup.com, or by calling the Company's toll-free investor information line at 1-877-INFO-NITE.

The matters described herein contain forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve a number of risks, uncertainties or other factors beyond the Company's control, which could cause actual results to differ materially from historical results, performance or other expectations and from any opinions or statements expressed with respect to future periods. These factors include, but are not limited to, the Company's ability to implement its growth strategies, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, intellectual property rights, and other factors detailed in the Company's registration statement and periodic reports filed with the Securities and Exchange Commission.

                          KNIGHT TRADING GROUP, INC.
                Consolidated Statements of Income (unaudited)

                   Three Months Ended December 31,  Year Ended December 31,
                          2001          2000          2001         2000
    Revenues
    Net trading
     revenue          $139,106,271  $223,116,151 $564,630,212 $1,157,515,897
    Commissions and
     fees               11,316,530    13,255,502   47,942,570    32,547,907
    Asset management
     fees                4,977,959    10,856,531   36,756,865    41,883,882
    Interest and
     dividends, net      4,332,371     2,864,764   24,949,310    16,137,298
    Investment income
     and other           2,586,796     1,234,648   10,433,418     9,224,764
    Total revenues     162,319,927   251,327,596  684,712,375 1,257,309,748

    Expenses
    Employee compensation
     and benefits       58,001,550    86,376,859  249,971,154   421,169,673
    Execution and
     clearance fees     30,728,441    28,622,858  117,518,622   112,238,423
    Payments for order
     flow               17,609,757    39,738,336   81,941,538   174,645,438
    Communications and
     data processing    11,391,829    10,737,003   50,856,148    33,025,035
    Depreciation and
     amortization       11,548,418     8,244,141   42,759,165    25,335,640
    Occupancy and
     equipment rentals   6,799,217     5,929,930   20,540,053    18,741,887
    Professional fees    2,207,146     5,043,349   15,052,273    21,526,495
    Business development 1,750,889     4,245,398   11,617,364    14,806,302
    Other                3,699,139     4,822,768   19,572,254    17,289,411
    Loss on writedown
     of assets           2,343,084            --   20,538,652            --
    Total expenses     146,079,470   193,760,642  630,367,223   838,778,304

    Income before income
     taxes and
     minority interest  16,240,457    57,566,954   54,345,152   418,531,444
    Income tax expense   5,051,948    22,975,979   25,461,246   159,446,394

    Net income before
     minority interest  11,188,509    34,590,975   28,883,906   259,085,050

    Minority interest
     in consolidated
     subsidiaries       (2,288,528)     (659,190)  (9,641,661)     (836,952)

    Net income         $13,477,037   $35,250,165  $38,525,567  $259,922,002
    Basic earnings
     per share               $0.11         $0.29        $0.31         $2.12
    Diluted earnings
     per share               $0.11         $0.28        $0.31         $2.05

    Pro forma adjustments:*
    Income before
     income taxes                                              $418,531,444
    Adjustment for pro
     forma employee compensation
     and benefits                                                  (267,109)

    Pro forma income
     before income
     taxes                                                      418,264,335
    Pro forma income
     tax expense                                                160,089,685
    Pro forma income
     before minority
     interest                                                  $258,174,650
    Minority interest in
     consolidated subsidiaries                                     (836,952)
    Pro forma net income                                       $259,011,602

    Pro forma basic earnings
     per share                                                        $2.11
    Pro forma diluted
     earnings per share                                               $2.04

    Shares used in the
     computation
     of basic earnings
     per share*        124,121,053   123,029,403 123,796,181    122,520,733

    Shares used in the
     computation of diluted
     earnings per
     share*            125,421,454   126,403,983 125,758,863    126,863,316


     *  On January 12, 2000, Knight Trading Group, Inc. (the "Company")
        completed its merger with Arbitrade Holdings LLC ("Arbitrade").  The
        transaction was accounted for as a pooling of interests, and, as such,
        the historical financial statements have been restated to account for
        the merger on a retroactive basis.  Pro forma adjustments for
        compensation and income taxes have been made to the historical
        financial statements of Arbitrade to adjust for partners' compensation
        paid as distributions of capital and income taxes, which were
        previously borne by the individual partners.  The foregoing
        description of the Arbitrade transaction is a brief summary and is
        qualified in its entirety by reference to the Merger Agreement, a copy
        of which was filed as an exhibit to the Company's 8-K filed with the
        SEC on January 12, 2000.  See also the Company's Report on Form 10-K
        for the year ended December 31, 1999.


                          KNIGHT TRADING GROUP, INC.
                Consolidated Statements of Financial Condition

                                                  December 31,   December 31,
                                                     2001           2000
                                                 (unaudited)
    ASSETS
    Cash and cash equivalents                   $361,294,311    $364,057,534
    Securities owned, held at clearing broker,
     at market value                           1,754,482,505   1,799,966,679
    Receivable from clearing brokers             820,103,479     114,047,275
    Fixed assets and leasehold improvements
     at cost, less accumulated depreciation       90,125,704      79,014,393
    Goodwill                                      51,899,985      45,239,177
    Investments                                   92,665,597      64,917,975
    Other assets                                  55,114,585      54,166,139

    Total assets                              $3,225,686,166  $2,521,409,172

    LIABILITIES & STOCKHOLDERS' EQUITY
    Liabilities
    Securities sold, not yet purchased,
     at market value                          $2,039,355,967  $1,427,214,323
    Payable to clearing brokers                  227,526,691     184,269,478
    Accrued compensation expense                  65,121,718      62,444,645
    Accrued execution and clearance fees           7,818,552       6,092,754
    Accrued payments for order flow                5,594,935      12,117,998
    Accounts payable, accrued expenses and
    other liabilities                             24,739,540      30,093,885
    Income taxes payable                             623,530       4,813,771
    Total liabilities                          2,370,780,933   1,727,046,854

    Minority interest in
     consolidated subsidiaries                    20,648,809      20,175,872

    Stockholders' equity
    Class A Common Shares                          1,241,586       1,232,908
    Additional paid-in capital                   335,796,119     309,611,248
    Retained earnings                            504,472,861     465,947,294
    Unamortized stock-based compensation            (672,763)             --
    Accumulated other comprehensive income (loss) -
     foreign currency translation adjustments,
     net of tax                                   (6,581,379)     (2,605,004)

    Total stockholders' equity                   834,256,424     774,186,446

    Total liabilities and
     stockholders' equity                     $3,225,686,166  $2,521,409,172

CONTACT: Robert I. Turner, Executive Vice President, Chief Financial Officer and Treasurer, +1-201-557-6845, or Margaret Wyrwas, Senior Vice President, Corporate Communications & Investor Relations, +1-201-557-6954 or mwyrwas@knight-sec.com, or Judy Pirro, Manager, Investor and Shareholder Relations, +1-201-356-1548 or judy_pirro@knight-sec.com, or Kara Fitzsimmons, Manager, Corporate Communications, +1-201-356-1523 or kara_fitzsimmons@knight-sec.com, all of Knight Trading Group