JERSEY CITY, N.J., Oct 22, 2003 /PRNewswire-FirstCall via COMTEX/ -- Knight Trading Group, Inc. (Nasdaq: NITE) today reported GAAP net income of $23.6 million for the third quarter of 2003, or $0.20 per diluted share. For the third quarter of 2002, the company reported a GAAP net loss of $3.4 million, or $0.03 loss per diluted share.

Revenues for the third quarter of 2003 were $182.3 million, compared to $119.5 million for the third quarter of 2002. During the third quarter of 2003, the company's cash equity and options market-making activities generated net trading revenue and interest of $112.6 million and $34.4 million, respectively, versus $69.3 million and $30.0 million during the third quarter of 2002.

                                                   Q3 2003           Q3 2002

    Revenues ($)                               182,304,850       119,474,654
    Income/(loss) from continuing
     operations ($)                             23,602,552        (1,959,053)
    Loss from discontinued operations ($)                0        (1,471,613)
    Net income/(loss) ($)                       23,602,552        (3,430,666)
    Diluted EPS ($)                                   0.20             (0.03)
    U.S. equity trades executed                 47,649,565        31,108,203
    Average daily U.S. equity trades               744,524           486,066
    U.S. equity shares traded *            118,946,863,128    51,528,587,423
    U.S. options contracts traded               17,117,045        13,464,822

     * Includes 83.0 billion and 27.6 billion of OTC Bulletin Board and Pink
       Sheet shares for the third quarter of 2003 and third quarter of 2002,
       respectively.

                                                  YTD 2003          YTD 2002

    Revenues ($)                               467,980,730       381,422,989
    Income/(loss) from continuing
     operations ($)                             30,682,493       (34,849,526)
    Loss from discontinued operations ($)       (2,124,297)       (4,803,612)
    Net income/(loss) ($)                       28,558,196       (39,653,138)
    Diluted EPS ($)                                   0.25             (0.33)
    U.S. equity trades executed                128,739,173        89,045,740
    Average daily U.S. equity trades               684,783           473,648
    U.S. equity shares traded *            269,444,767,958   138,815,221,168
    U.S. options contracts traded               46,008,772        36,948,149

     * Includes 170.1 billion and 73.6 billion of OTC Bulletin Board and Pink
       Sheet shares for the year-to-date 2003 and year-to-date 2002,
       respectively.

"Knight just reported its best quarterly earnings in more than two years, coming in well above expectations during what are typically the slowest three months of the year for our industry," said Thomas M. Joyce, Chief Executive Officer and President of Knight Trading Group. "Each of Knight's businesses operated on a profitable basis for the second consecutive quarter. Higher volume, intra-day volatility and increases in dollar value traded during the quarter made for a positive trading environment for Knight as well as attracted more investors to the market. Finally, Knight made further progress adding new clients while garnering more business from its current roster."

Domestic Businesses

The company's domestic businesses earned net income of $23.4 million, led by a strong performance in the cash equity market-making business. For the third quarter of 2002, the net loss from all domestic businesses was $1.0 million.

"Knight continues to introduce fundamental change to our business - for instance, our recent agreement to purchase Donaldson & Co., a leading soft dollar and commission recapture firm," Mr. Joyce said. "These programs are an integral part of the investment process, and we believe the addition to Knight's institutional offering is an extension of the company's strategy to focus all efforts around client needs. Knight always seeks growth opportunities through appropriate investments in new products and services, like soft dollar programs, and in the select hiring of key personnel. To offset the short-term rise in expenses resulting from these initiatives, Knight will continue its internal efforts to drive efficiencies across all businesses."

The company's Asset Management business segment generated $13.0 million in asset management fees during the third quarter of 2003, up from $6.1 million in the same period a year ago, reflecting better returns. The asset management business had approximately $1.4 billion and $1.2 billion of assets under management at September 30, 2003 and 2002, respectively. In addition, the company earned $5.3 million during the third quarter of 2003 on its investment in the Deephaven funds.

The company had 870 employees in the U.S. at the end of the third quarter, down from 967 at the end of 2002 and down from 945 at the end of September 2002.

International Businesses

For the third quarter of 2003 (and for the second consecutive quarter), continuing international operations were slightly profitable. For the third quarter of 2002, the net loss from continuing international operations was $2.4 million.

As of September 30, 2003, Knight had 40 employees in Europe. The company had 63 employees in all international operations at the end of 2002, compared to 89 international employees at the end of September 2002.

"While we have two consecutive solid quarters under our belt, Knight has yet to pass the test under unfavorable market conditions," Mr. Joyce said. "Recent questions around the broad market infrastructure and oversight could make for a potentially choppy trading environment in the fourth quarter. And, while recent economic indicators have been positive, there remains a possibility for investors to become unsettled again in this atmosphere of change. With directionality for the coming months unclear, Knight continues its search to uncover maximum trade efficiency across the breadth and depth of the marketplace -- a necessity for both Knight and for our clients, who themselves face challenge and opportunity in the wake of the revived market structure debate."

Liquidity and Stock Repurchase Plan

The company had $765.4 million in stockholders' equity as of September 30, 2003, equivalent to a book value of $6.74 per share. As of September 30, 2003, the company had $276.5 million in cash and cash equivalents and a $192.1 million investment in funds managed by its Deephaven subsidiary.

At its May 12, 2003 meeting, the Board of Directors authorized an additional increase in the size of the repurchase program from $70 million to $95 million. During the third quarter of 2003, the company repurchased 522,900 shares for $5.1 million. To date, the company has repurchased 14,290,200 shares for $74.3 million under the $95 million stock repurchase program. The company cautions that there are no assurances that any further repurchases may actually occur.

Knight Trading Group had approximately 113.6 million shares of common stock outstanding as of September 30, 2003.

Knight is focused on meeting the needs of institutional and broker-dealer clients by providing comprehensive trade execution services in cash equities and options. A leading execution specialist, Knight offers capital commitment and access to a deep pool of liquidity across the depth and breadth of the market as it strives to provide superior client service. Knight also maintains a $1.4 billion asset management business for institutions and high net worth individuals. More information about Knight can be obtained at www.knighttradinggroup.com.

Copies of this earnings release and other information on the company can be obtained via the Internet at the company's Web site, or by calling the company's toll-free investor information line at 1-877-INFO-NITE. The company will conduct its third quarter earnings conference call for analysts, investors and the media at 9:00 a.m. (EDT) today, October 22, 2003. The conference call will be Webcast live at 9:00 a.m. (EDT) for all investors and interested parties on Knight's Web site. In addition, the company will release its volume statistics for September 2003 before the start of trading today on Knight's Web site.

On Monday, November 10, 2003, Knight will provide a live Webcast of its semi-annual Meeting for Analysts and Institutional Investors. Interested parties can access this event through the company's Web site at www.knighttradinggroup.com.

Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about the Company's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Since such statements involve risks and uncertainties, the actual results and performance of the Company may turn out to be materially different from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made herein; however, readers should carefully review reports or documents the Company files from time to time with the Securities and Exchange Commission.

      KNIGHT TRADING GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS*

                       For the three months ended  For the nine months ended
                              September 30,              September 30,
                            2003         2002          2003          2002
    REVENUES
    Net trading revenue $146,915,058  $97,997,221  $367,293,163  $318,785,648
    Commissions and
     fees                 14,016,884    9,943,424    40,333,357    31,326,429
    Asset management
     fees                 12,994,069    6,053,433    36,985,896    20,121,346
    Interest and
     dividends, net          341,099    1,654,131     3,348,331     4,258,566
    Investment income
     and other             8,037,740    3,826,445    20,019,983     6,931,000
    Total revenues       182,304,850  119,474,654   467,980,730   381,422,989

    EXPENSES
    Employee
     compensation and
     benefits             71,799,982   47,450,339   187,258,566   161,988,907
    Execution and
     clearance fees       30,982,099   30,017,218    90,844,269    87,485,368
    Payments for order
     flow                 14,528,628   14,514,242    38,942,727    50,557,586
    Communications and
     data processing       7,280,108    8,062,490    24,017,404    27,637,469
    Depreciation and
     amortization          6,656,126    8,772,363    22,166,923    27,429,628
    Occupancy and
     equipment rentals     4,448,483    5,249,974    13,786,410    18,711,117
    Professional fees      1,849,530    3,574,148     9,424,937    13,393,664
    Business
     development           1,456,253    1,305,262     5,286,906     5,642,972
    International
     charges                     -            -             -      28,395,515
    Writedown of assets
     and lease loss
     accrual                     -      1,395,834    17,412,066    10,456,782
    Other                  3,548,136    2,897,956     8,259,027     9,493,893
    Total expenses       142,549,345  123,239,826   417,399,235   441,192,901

    Income/(loss)
     before income
     taxes, minority
     interest and
     discontinued
     operations           39,755,505   (3,765,172)   50,581,495   (59,769,912)
    Income tax
     expense/(benefit)    16,152,953   (1,806,119)   19,899,002   (19,819,889)

    Income/(loss)
     before minority
     interest and
     discontinued
     operations           23,602,552   (1,959,053)   30,682,493   (39,950,023)
    Minority interest
     in losses of
     consolidated
     subsidiaries                -            -             -      (5,100,497)
    Net income/(loss)
     from continuing
     operations           23,602,552   (1,959,053)   30,682,493   (34,849,526)
    Loss from
     discontinued
     operations, net of
     tax                         -     (1,471,613)   (2,124,297)   (4,803,612)
    Net income/(loss)    $23,602,552  $(3,430,666)  $28,558,196  $(39,653,138)

    Diluted earnings
     per share from
     continuing
     operations                $0.20       $(0.02)        $0.26        $(0.29)
    Diluted earnings
     per share from
     discontinued
     operations                 $-         $(0.01)       $(0.02)       $(0.04)
    Diluted earnings
     per share                 $0.20       $(0.03)        $0.25        $(0.33)

    Shares used in
     computation of
     diluted earnings
     per share           117,698,712  118,316,798   115,984,945   121,658,913

     * Certain prior period amounts have been reclassified to conform to the
       current year presentation.


  KNIGHT TRADING GROUP, INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                        September 30, 2003   December 31, 2002
    ASSETS
    Cash and cash equivalents                $276,458,391        $316,722,259
    Securities owned, held at clearing
     brokers, at market value               2,796,635,375       1,984,500,084
    Receivable from brokers and dealers       159,380,870         480,203,140
    Investment in Deephaven sponsored
     funds                                    192,141,442         153,790,799
    Fixed assets and leasehold
     improvements at cost, less
     accumulated depreciation and
     amortization                              40,556,322          58,066,695
    Strategic investments                      20,090,332          24,715,110
    Intangible assets, less accumulated
     amortization                              32,840,505          34,852,535
    Goodwill                                   17,536,945          17,536,945
    Other assets                               72,512,465         101,488,739

    Total assets                            3,608,152,647       3,171,876,306

    LIABILITIES & STOCKHOLDERS' EQUITY
    Liabilities
    Securities sold, not yet purchased,
     at market value                        2,633,328,385       2,254,900,355
    Payable to brokers and dealers             70,512,300          35,271,654
    Accrued compensation expense               83,069,010          60,525,247
    Accounts payable, accrued expenses
     and other liabilities                     55,881,108          52,753,720

    Total liabilities                       2,842,790,803       2,403,450,976

    Minority interest in consolidated
     subsidiaries                                      -           12,009,561

    Stockholders' equity
    Class A common shares                       1,266,026           1,247,053
    Additional paid-in-capital                354,039,925         340,211,426
    Retained earnings                         489,089,850         460,541,000
   Treasury stock, at cost                    (67,670,368)        (35,423,292)
    Unamortized stock-based compensation      (11,363,589)         (6,791,533)
    Accumulated other comprehensive
     income (loss) - foreign currency
     translation adjustment, net of tax                -           (3,368,885)

    Total stockholders' equity                 765,361,844        756,415,769

    Total liabilities and stockholders'
     equity                                  3,608,152,647      3,171,876,306

SOURCE Knight Trading Group, Inc.

Margaret Wyrwas, Senior Managing Director, Corporate Communications & Investor Relations, +1-201-557-6954, mwyrwas@knighttrading.com, or Kara Fitzsimmons, Vice President, Corporate Communications, +1-201-356-1523, kfitzsimmons@knighttrading.com, or Judy Pirro, Vice President of Investor & Shareholder Relations, +1-201-356-1548, jpirro@knighttrading.com, or Catherine Smith, Assistant Vice President of Marketing Communications & Public Relations, +1-201-557-6992, csmith@knighttrading.com, all of Knight Trading Group, Inc.

http://www.knighttradinggroup.com