Business Model Excels in an Active Market Environment Leading to Record Fourth Quarter Results of $0.50 per share

JERSEY CITY, N.J., Jan. 19 /PRNewswire/ -- Knight/Trimark Group, Inc. (Nasdaq: NITE) today reported results for the fourth quarter and year ended December 31, 1999. Knight/Trimark Group is the leading market maker in both Nasdaq securities and the over-the-counter market for New York Stock Exchange- and American Stock Exchange-listed securities.

Fourth Quarter 1999 vs. Fourth Quarter 1998 (4)

    *  115% growth in revenues       *  118% growth in trades executed
    *  233% growth in net income     *  116% growth in shares traded

    Fourth Quarter 1999 vs. Third Quarter 1999 (4)
    *  86% growth in revenues        *  47% growth in trades executed
    *  167% growth in net income     *  46% growth in shares traded

    Full Year 1999 vs. Full Year 1998 (4)
    *  125% growth in revenues       *  122% growth in trades executed
    *  231% growth in net income (1) *  111% growth in shares traded

                   Fourth Quarter  Fourth Quarter   Full Year      Full Year
                        1999 (4)        1998         1999 (4)         1998

    Revenues ($)     256,436,204    119,282,707    800,727,654    355,776,650
    Net income ($)(1) 58,400,080     17,536,859    167,844,112     50,781,180
    Diluted EPS ($)(2)       .50            .17           1.46            .53
    Trades executed   30,111,762     13,796,127     90,690,054     40,894,055
    Average daily
     trades              470,496        215,564        359,881        162,278
    Shares traded 25,946,697,929 12,017,814,616 81,010,256,250 38,372,592,340

Revenues for the fourth quarter of 1999 rose 115% to $256.4 million, compared to $119.3 million for the fourth quarter of 1998. Net income for the fourth quarter of 1999 totaled $58.4 million, or $0.50 per share on a diluted basis, a 233% increase from $17.5 million, or $0.17 per share on a diluted basis for the same period a year ago (4). One-time expenses incurred in connection with the Company's acquisition of Arbitrade reduced earnings by $0.04 per share on a diluted basis. The Company showed pre-tax margins of 37% in the fourth quarter of 1999 (39% excluding merger expenses), up from 25% in 1998. Return on equity for the fourth quarter and full year 1999, stated on an annualized basis, was 54% and 48%, respectively.

"Knight is the only market maker that predicates its business model on its customer-driven focus, innovative technology, scale and highly skilled human capital. Our record results in 1999's fourth quarter demonstrate that this value-added proposition is the optimal model to drive our future growth. Market conditions of orderly volatility and high volume in the fourth quarter presented an ideal environment for our business model. We executed 470,000 trades per day on average, a 47% increase from the previous quarter and a 118% gain from the fourth quarter 1998," said Kenneth D. Pasternak, the Company's President and Chief Executive Officer. "We also made significant headway during the past quarter in our efforts to diversify our revenue stream, evidenced by the fact that higher margin institutional order flow totaled $78 million or 31% of our overall fourth quarter trading revenues, up from 19% of total trading revenues in the fourth quarter 1998. These developments and high trading volumes are the main drivers of the 233% quarter-over-quarter and 231% year-over-year gains on Knight's bottom line."

Revenues and net income for the fourth quarter of 1999 increased 86% and 167%, respectively, from the third quarter of 1999. Trades executed and shares traded for the fourth quarter of 1999 increased 47% and 46%, respectively, from the third quarter of 1999. In addition, the Company set a new volume record on January 10, 2000, executing over 733,000 trades and over 722 million shares.

"During the past quarter, Knight implemented another phase of its growth strategy by announcing the acquisition of Arbitrade Holdings LLC, an options market maker and asset manager with operations in the U.S. and in Europe. Arbitrade's conservative trading methodology is risk averse and has resulted in consistent, stable revenues. This deal, which we expect to be immediately accretive to our earnings, was closed on January 12, 2000 when we issued approximately 10.5 million shares, valued at approximately $393 million, to Arbitrade's owners," continued Pasternak. "Our acquisition of Arbitrade will enable us to apply our proven business model to the options market, which is on the cusp of a revolution as pronounced as the one experienced in the equities market in the 1990s. The options market is in the second inning of a nine-inning ballgame. We plan to fulfill the compelling need in the options industry for a market maker that understands all of the variables at play, namely regulatory change, the rising integration of technology and the empowerment of the self-directed investor. Our presence in the options market will be immediately felt and will expand once the International Securities Exchange (ISE) begins trading this year."

"Knight is one of the fastest growing companies in America. We were one of the first to recognize the paradigm shift brought on by the advancement of technology, the empowerment of self-directed investors through the Internet, and the impact of regulatory change. Knight will continue to grow because we understand that future success in the marketplace will belong to the companies that deliver best of breed products and services with speed and flexibility to customers. Knight has demonstrated our prowess in this area through our accomplishments in the U.S. equities market," said Pasternak. "Knight aims to grow through additional product offerings such as options and asset management and is actively pursuing international expansion opportunities in Europe and Asia. In fact, we are in preliminary talks with The Nikko Securities Co., Ltd. of Japan about a joint venture operation that would provide wholesale market making services in Japanese securities."

"In the next year, Knight expects to continue its fast-paced growth rate. We believe that the secular trends that created a market opportunity for Knight's emergence are in their infancy and will continue to blossom in the coming periods. We foresee continued, dramatic growth in the need for Knight's range of services from online firms, national full-service brokers and our growing institutional base. In fact, industry analysts predict that the number of online investors will total 25 million by the end of 2002, a trend that will directly benefit Knight and its customer base," said Pasternak. "Knight has created a value proposition that leapfrogged competitors but we are not resting on our laurels. Ultimately, Knight's vision is to allow our customers to trade any financial instrument, anytime, from anywhere in the world."

The AutEx Group ("AutEx")(3) ranked Knight Securities as the largest market maker in Nasdaq/OTC securities for December 1999 with a 19.59% total market share which represents a 26% increase in market share from December 1998 when Knight achieved a 15.57% total market share.

Knight/Trimark, headquartered in Jersey City, NJ, is the parent company of Knight Securities, Trimark Securities and Arbitrade Holdings. Knight Securities makes markets in approximately 7,400 equity securities listed on Nasdaq and on the OTCBB of the National Association of Securities Dealers (NASD). Trimark trades NYSE- and AMEX-listed equity securities over the counter -- the Third Market. Arbitrade makes markets in options on individual equities, equity indices, fixed income instruments and certain commodities in the U.S. and in Europe. Arbitrade also maintains an asset management business for institutional investors and high net worth individuals through its Deephaven subsidiary.

As the number one destination for online trade executions, Knight/Trimark is the processing power behind the explosive growth in securities trading via the Internet. The firm was recently selected to Fortune magazine's "e-50 Stock Index," an elite collection of companies that are shaping the new Internet-based economy. Currently, the four-year-old company employs more than 800 people worldwide with offices in Jersey City, NJ; Jericho, White Plains, Purchase and New York, NY; Chicago, IL; Boston, MA; Minnetonka, MN; Santa Clara, CA and London, England.

Copies of this earnings release and other information on the Company can be obtained via the Internet at http://www.knight-sec.com or toll-free on the Company's 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 & Exchange Commission.

(1) Net income for the year ended December 31, 1998 was adjusted to

         reflect pro forma income taxes related to the Company's
         reorganization from a limited liability company to a C corporation in
         connection with the Company's initial public offering on July 8,
         1998.
    (2)  Diluted earnings per share excluding one-time expenses incurred in
         connection with the Company's acquisition of Arbitrade Holdings,
         L.L.C. was $0.54 for the quarter ended December 31, 1999 and $1.49
         for the year ended December 31, 1999.
    (3)  The AutEx Group is a widely-recognized industry reporting service
         that provides daily statistics on trading activity and broker-dealer
         market-share, as reported by broker-dealers.
    (4)  Knight's acquisition of Arbitrade closed on January 12, 2000.  As
         such, the results reported in this press release do not include the
         1999 financial information of Arbitrade.  Please see our Form 8-K
         filed on January 12, 2000 for additional discussion of the Arbitrade
         transaction.


                          KNIGHT/TRIMARK GROUP, INC.
                      Consolidated Statements of Income

                        Three Months Ended Dec. 31,     Year Ended Dec. 31,
                          1999           1998         1999         1998
    Revenues
    Net trading
     revenue          $247,014,571  $115,075,407  $771,437,707 $348,209,464
    Commissions and
     fees                4,751,155     2,496,432    16,439,088    3,983,133
    Interest, net        4,670,478     1,710,868    12,850,859    3,584,053
    Total revenues     256,436,204   119,282,707   800,727,654  355,776,650

    Expenses
    Employee
     compensation and
     benefits           77,716,347    40,189,198   242,145,274  108,321,436
    Payments for order
     flow               39,845,973    26,401,525   138,696,689   82,499,233
    Execution and
     clearance fees     21,849,626    13,360,492    79,321,769   45,718,605
    Communications and
     data processing     5,198,050     3,167,439    17,975,757   10,616,663
    Business development 3,607,630       743,235     8,963,616    2,364,231
    Occupancy and
     equipment rentals   2,769,236     1,792,948     9,728,271    5,837,555
    Depreciation and
     amortization        2,582,557     1,727,324     9,132,325    5,887,593
    Professional fees    2,608,135     1,193,108     6,806,688    3,400,566
    Merger related
     expenses ****       5,189,295            --     5,189,295           --
    Interest on
     Preferred Units            --            --            --      714,904
    Other                  841,548       678,570     3,377,919    2,063,628
    Total expenses     162,208,397    89,253,839   521,337,603  267,424,414

    Net income
     before taxes       94,227,807    30,028,868   279,390,051   88,352,236
    Income tax expense  35,827,727    12,492,009   111,545,939   21,751,209

    Net income        $ 58,400,080  $ 17,536,859  $167,844,112  $66,601,027
    Basic earnings
     per share               $0.52         $0.17         $1.52           --
    Diluted earnings
     per share               $0.50         $0.17         $1.46           --

    Pro forma adjustment:*
    Net income before taxes                                     $88,352,236
    Pro forma income tax expense                                 37,571,056
    Pro forma net income                                        $50,781,180

    Pro forma basic and diluted
     earnings per share                                               $0.53

    Shares used in the
     computation of
     basic earnings
     per share **      111,490,423   106,009,764   110,316,709
    Shares used in the
     computation of
     diluted earnings
     per share **      116,447,387   106,009,764   115,250,429
    Pro forma shares outstanding
     for basic and diluted
     earnings per share***                                       95,022,222

    *    Before its reorganization to a C Corporation on July 13, 1998, the
         Company, as a limited liability company, was not subject to income
         taxes.  Pro forma income tax expense was computed based on an
         effective tax rate of 42.5% prior to this date.

    **   The shares used to calculate basic earnings per share for the periods
         ended December 31, 1999 reflect the weighted average shares
         outstanding during the period.  The shares used to calculate diluted
         earnings per share include the effect of dilutive stock options.

    ***  Pro forma shares outstanding for the year ended December 31, 1998
         have been determined as if the Company's reorganization to a C
         Corporation occurred as of January 1, 1998.

    **** Primarily consists of investment banking, legal and accounting fees
         related to the merger with Arbitrade.


                          KNIGHT/TRIMARK GROUP, INC.
                Consolidated Statements of Financial Condition

                                            December 31,     December 31,
                                                1999             1998
    ASSETS
    Cash and cash equivalents              $303,864,955     $117,381,556
    Securities owned, at market value       135,816,418      100,476,151
    Receivable from clearing brokers        193,458,033      107,503,274
    Fixed assets and leasehold
     improvements at cost, less accumulated
     depreciation                            17,429,242       12,014,991
    Goodwill, less accumulated
     amortization                            18,547,805       16,036,859
    Investments                              12,696,342        1,913,000
    Other assets                             13,304,332        3,534,544

    Total assets                           $695,117,127     $358,860,375

    LIABILITIES & STOCKHOLDERS' EQUITY
    Liabilities
     Securities sold, not yet
      purchased, at market value           $129,849,223     $108,909,217
     Short-term borrowings                           --       10,000,000
     Accrued compensation expense            45,218,384       16,529,004
     Accrued execution and clearance fees     8,371,056        6,898,095
     Accrued payments for order flow         13,978,854        8,672,668
     Accounts payable, accrued
      expenses and other liabilities         17,725,571        5,445,112
     Income taxes payable                    15,992,937        2,285,620
     Total liabilities                      231,136,025      158,739,716

    Stockholders' equity
     Class A Common Shares                    1,116,165          981,244
     Class B Common Shares                           --           78,854
     Additional paid-in capital             265,210,144      169,249,880
     Retained earnings                      197,654,793       29,810,681
     Total stockholders' equity             463,981,102      200,120,659

    Total liabilities and
     stockholders' equity                  $695,117,127     $358,860,375

SOURCE  Knight/Trimark Group, Inc.

CONTACT: Robert Turner, Executive Vice President, Treasurer and Chief Financial Officer, 201-557-6845, or Margaret Wyrwas, Vice President, Corporate Communications & Investor Relations, 201-557-6954, mwyrwas@knight-sec.com, both of Knight-Trimark Group; or Russell Dubner, 212-704-4538, or Chuck Dohrenwend, 212-704-8102, for Knight-Trimark Group/