First Quarter      First Quarter
                                                2001                2000

    Revenues ($)                             225,647,124        510,599,038
    Pro forma net income ($)                  26,917,463        135,731,822
    Pro forma diluted EPS ($)                       0.21               1.07
    Equity trades executed                    30,177,299         44,069,441
    Average daily equity trades                  486,731            699,515
    Equity shares traded                  26,450,899,186     43,816,791,380

Revenues for the first quarter of 2001 declined 56% to $225.6 million, compared to $510.6 million for the first quarter of 2000. Net income for the first quarter of 2001 totaled $26.9 million, or $0.21 per share on a diluted basis, an 80% decrease from $135.7 million, or $1.07 per share on a pro forma diluted basis for the same period a year ago. The Company achieved pre-tax margins of 19.1% in the first quarter of 2001, down from 42.5% in the first quarter of 2000. Return on equity for the first quarter of 2001, stated on an annualized basis, was 13.8%. Costs related to international expansion efforts accounted for approximately $10 million, equivalent to $0.08 per share.

Revenues and net income for the first quarter of 2001 decreased 10% and 24%, respectively, from the fourth quarter of 2000. For the first quarter, equity trades executed declined 11% versus the fourth quarter of 2000. Equity shares traded for the first quarter of 2001 increased 7% from the fourth quarter of 2000.

The Company's options market maker generated total net trading revenue of approximately $41.6 million during the first quarter of 2001, versus $33.0 million during the first quarter of 2000. Additionally, the Company's asset management business generated $12.7 million in asset management fees during the first quarter of 2001, up 30% from $9.8 million in the same period a year ago.

''First quarter 2001 was the most challenging trading environment Knight has experienced, characterized by severe declines across most of the leading indexes,'' stated Kenneth D. Pasternak, Chairman, Chief Executive Officer and President of Knight Trading Group. ''The Nasdaq, DJIA, S&P 500 and Russell 2000 indices closed down 26%, 8%, 12% and 7%, respectively, during the quarter, despite increased trading volume.''

''The precipitous decline in the Nasdaq Composite Index, which went from a high of 5,049 on March 10, 2000 to its first quarter 2001 low of 1,820 on March 29th, negatively impacted trading activity by the self-directed investor -- Knight's core constituency. Record levels of money flows into money market funds during the first two months of this year reflected the bias in self-directed investor sentiment towards cash rather than equities. Absent any economic catalyst, we believe the self-directed investor will continue to remain cautious as the market cycle bottoms out.''

''Knight's efforts to diversify our revenue stream through enhanced product offerings and by broadening our client base have been important factors in partially offsetting the negative effects of the current market,'' continued Mr. Pasternak. ''Despite the recent cyclical downturn in the equity markets, we believe there is a powerful, ongoing secular trend towards self-directed investing as a means of wealth creation and management. Evidence of this trend is clearly outlined when one reviews Knight's average daily equity trades for the first quarters of the past five years: 63,000 in 1997, 124,000 in 1998, 306,000 in 1999, 700,000 in 2000, and 487,000 in 2001. We believe that positioning Knight as a single point of entry for order flow across multiple product, client and geographic lines will enhance our ability to capture the benefits of this trend when the market cycle swings back into positive territory.''

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 place on behalf of their customers. Knight also maintains an asset management business for institutional investors and high net worth individuals through Deephaven Capital Management.

Knight has the power to commit capital for market orders, and also maintains one of the largest limit order books in the OTC market. It is one of the largest destinations for stock orders placed via the Internet. Knight traded 112 billion shares in the year 2000, a volume behind only those posted by Nasdaq and the New York Stock Exchange (NYSE). For the second consecutive year, based on 1999 and 2000 fiscal year results, Knight was 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 http://www.knighttradinggroup.com.

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 March 31,
                                                    2001             2000

    Revenues
    Net trading revenue                         $187,454,445   $486,778,104
    Asset management fees                         12,720,036      9,773,589
    Interest and dividends, net                    5,309,313      3,507,417
    Commissions and fees                          14,512,201      7,027,629
    Investment income and other                    5,651,129      3,512,299
     Total revenues                              225,647,124    510,599,038

    Expenses
    Employee compensation and benefits            79,695,673    175,198,790
    Payments for order flow                       29,718,426     59,317,560
    Execution and clearance fees                  30,049,055     30,222,288
    Communications and data processing            12,831,389      7,125,993
    Depreciation and amortization                 10,222,579      4,214,963
    Professional fees                              5,654,011      4,532,062
    Occupancy and equipment rentals                5,010,858      3,093,186
    Business development                           3,369,758      5,238,693
    Other                                          5,942,719      4,605,761
     Total expenses                              182,494,468    293,549,296

    Income before income taxes and
     minority interest                            43,152,656    217,049,742
    Income tax expense                            17,982,130     80,454,361

    Net income before minority interest          $25,170,526   $136,595,381

    Minority interest in consolidated
     subsidiaries                                 (1,746,937)            --

    Net income                                  $ 26,917,463   $136,595,381
    Basic earnings per share                           $0.22          $1.12
    Diluted earnings per share                         $0.21          $1.08

    Pro forma adjustments:*
    Income before income taxes                                 $217,049,742
    Adjustment for pro forma
     employee compensation and benefits                            (267,109)

    Pro forma income before income taxes                        216,782,633
    Pro forma income tax expense                                 81,050,811
     Pro forma net income                                      $135,731,822

    Pro forma basic earnings per share                                $1.11
    Pro forma diluted earnings per share                              $1.07

    Shares used in the computation
     of basic earnings per share*                123,517,121    122,146,982
    Shares used in the computation
     of diluted earnings per share*              126,179,906    126,981,962

    *  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 Reports on Form 10-K for the
       years ended December 31, 1999 and December 31, 2000.


                          KNIGHT TRADING GROUP, INC.
                Consolidated Statements of Financial Condition

                                                   March 31,    December 31,
                                                    2001           2000
                                                  (unaudited)
    ASSETS
    Cash and cash equivalents                   $374,848,966   $364,057,534
    Securities owned, held at clearing
     broker, at market value                   1,517,954,276  1,799,966,679
    Receivable from clearing brokers             658,361,210    114,047,275
    Fixed assets and leasehold
     improvements at cost, less
     accumulated depreciation                     86,819,156     79,014,393
    Goodwill, less accumulated amortization       43,194,198     45,239,177
    Investments                                   83,253,424     64,917,975
    Other assets                                  54,824,311     54,166,139

    Total assets                              $2,819,255,541 $2,521,409,172

    LIABILITIES & STOCKHOLDERS' EQUITY
    Liabilities
    Securities sold, not yet purchased,
     at market value                          $1,745,436,253 $1,427,214,323
    Payable to clearing brokers                  134,333,130    184,269,478
    Accrued compensation expense                  41,693,199     62,444,645
    Accrued execution and clearance fees           5,040,626      6,092,754
    Accrued payments for order flow                5,981,101     11,635,069
    Accounts payable, accrued expenses
     and other liabilities                        22,827,010     30,576,814
    Income taxes payable                          17,563,405      4,813,771
    Total liabilities                          1,972,874,724  1,727,046,854

    Minority interest in consolidated
     subsidiaries                                 27,094,662     20,175,872

    Stockholders' equity
    Class A Common Shares                          1,236,505      1,232,908
    Additional paid-in capital                   331,163,026    309,611,248
    Retained earnings                            492,864,757    465,947,294
    Accumulated other comprehensive
     income (loss) - foreign currency
     translation adjustments, net of tax          (5,978,133)    (2,605,004)

    Total stockholders' equity                   819,286,155    774,186,446

    Total liabilities and
     stockholders' equity                     $2,819,255,541 $2,521,409,172