Knight Capital 8-K Knight Capital Group Announces Gaap Earnings of $0.24 Per Diluted Share for Second Quarter 2007

Exhibit 99.1

KNIGHT CAPITAL GROUP ANNOUNCES GAAP EARNINGS OF $0.24 PER DILUTED SHARE FOR SECOND QUARTER 2007

Global Markets segment generated second quarter pre-tax earnings of $32.7 million and achieved pre-tax margins of 20% in a mixed trading environment

Asset Management segment’s second quarter pre-tax earnings of $6.3 million driven by higher assets under management and positive returns

JERSEY CITY, New Jersey (July 18, 2007) – Knight Capital Group, Inc. (Nasdaq: NITE) today reported GAAP earnings from continuing operations of $24.4 million, or $0.24 per diluted share, for the second quarter of 2007. Pre-tax earnings from continuing operations for this period were $39.9 million.

For the second quarter of 2006, the company reported GAAP earnings from continuing operations of $30.3 million, or $0.29 per diluted share, and pre-tax earnings from continuing operations of $50.8 million. Excluding a pre-tax gain of $7.1 million, or approximately $0.04 per diluted share, related to the sale of a part of the company’s equity ownership in the International Securities Exchange, Inc., earnings from continuing operations for the second quarter of 2006 would have been $25.9 million, or $0.25 per diluted share.

“Continuing operations” include the company’s two operating business segments, Global Markets and Asset Management. Continuing operations also include a Corporate segment, encompassing corporate investments and overhead expenses. Amounts reported as “discontinued operations” include the company’s former Derivative Markets business segment, which included the subsidiary Knight Financial Products LLC, the sale of which was completed to Citigroup at the close of business on December 9, 2004.

Revenues for the second quarter of 2007 were $201.4 million, compared to $206.0 million for the second quarter of 2006.

Global Markets

During the second quarter of 2007, the Global Markets business segment generated total revenues of $165.3 million, compared to $183.4 million in the second quarter of 2006. In the second quarter of 2007, the Global Markets business segment reported pre-tax earnings of $32.7 million, compared to pre-tax earnings of $49.0 million in the second quarter of 2006.

“Knight’s Global Markets segment held steady in a mixed second quarter trading environment characterized by one-way price directionality and unremarkable volumes,” said Thomas M. Joyce, Chairman and Chief Executive Officer of Knight Capital Group. “With intense focus, our broker-dealer business set out to increase and source new liquidity. We have successfully added sell-side clients whose trading ‘exhaust,’ or order flow that would otherwise go to exchanges and ECNs, serves as an alternative liquidity source. Their interest in our trading software to more efficiently execute these orders has garnered more sell-side order flow that not only feeds Knight’s virtual exchange with more volume, but introduces liquidity that’s different from our established equity businesses. Equity volumes also increased during the quarter on the Direct Edge ECN, and foreign exchange and fixed income volumes increased on our Hotspot and ValuBond electronic platforms, respectively. Knight’s institutional business has performed consistently quarter over quarter and year over year. Our sales traders continue to win business based on their relationships and service.

	Q2 2007		Q2 2006
Revenues ($)	201,397,011		205,950,333
Net income from continuing operations ($)	24,378,236		30,339,584
Diluted EPS ($)	0.24		0.29
U.S. equity dollar value traded (in $ millions)	650,636		566,224
U.S. equity trades executed (in thousands)	72,720		59,222
Average daily U.S. equity trades (in thousands)	1,154		940
Nasdaq and Listed equity shares traded (in millions)	25,819		25,671
OTC Bulletin Board and Pink Sheet shares traded (in millions)	233,281		304,994
Average revenue capture per U.S. equity dollar value traded (bps)	1.6		2.1
Average month-end balance of assets under management (in $ millions)	3,970.0		3,074.6
Quarterly fund return to investors*	2.0	%	0.7	%

* Quarterly fund return represents the blended quarterly return across all assets under management in the Deephaven funds

	YTD 2007		YTD 2006
Revenues ($)	443,048,674		483,144,770
Net income from continuing operations ($)	57,563,948		79,471,625
Loss from discontinued operations, net of tax ($)	(1,332,818	)	—
Net income ($)	56,231,130		79,471,625
Diluted EPS ($)	0.54		0.75
U.S. equity dollar value traded (in $ millions)	1,213,135		1,125,896
U.S. equity trades executed (in thousands)	139,611		120,241
Average daily U.S. equity trades (in thousands)	1,126		962
Nasdaq and Listed equity shares traded (in millions)	49,580		53,532
OTC Bulletin Board and Pink Sheet shares traded (in millions)	452,107		678,670
Average revenue capture per U.S. equity dollar value traded (bps)	1.8		2.2
Average month-end balance of assets under management (in $ millions)	4,020.9		3,009.2
Year-to-date fund return to investors*	7.0	%	9.2	%

* Year-to-date fund return represents the blended return across all assets under management in the Deephaven funds

The company announced today in a separate press release that Citadel Derivatives Group LLC, an affiliate of Citadel Investment Group, L.L.C., has agreed to purchase a minority equity interest in Direct Edge ECN, a wholly owned subsidiary of Knight.

Asset Management

During the second quarter of 2007, the Asset Management business segment, Deephaven Capital Management, generated $29.1 million in asset management fees, compared to $14.1 million in the same period a year ago. In the second quarter of 2007, Asset Management reported pre-tax earnings of $6.3 million, compared to pre-tax earnings of $2.3 million in the second quarter of 2006. Asset Management had approximately $4.2 billion under management at July 1, 2007, up from $3.1 billion under management at July 1, 2006.

“Deephaven Capital Management gained further traction in the second quarter by continuing to deliver attractive risk-adjusted rates of return and growing assets under management,” Mr. Joyce said. “Performance was positive across nearly all of the diverse geographic regions in which Deephaven invests and the investment strategies it employs. Outstanding performance history over more than a decade continues to attract new clients and assets. We are bullish on the significant opportunities Deephaven has to build its business.”

Corporate

In the second quarter of 2007, the Corporate segment reported pre-tax earnings of $0.9 million, compared to a pre-tax loss of $0.5 million in the second quarter of 2006. Included in the results for the second quarter of 2006 was a pre-tax gain of $7.1 million, or approximately $0.04 per diluted share, related to the sale of a part of the company’s equity ownership in the International Securities Exchange, Inc.

The company’s corporate investment in the Deephaven funds earned $6.3 million pre-tax during the second quarter of 2007, compared to a pre-tax gain of $0.9 million during the second quarter of 2006. As of June 30, 2007, the company had $125.6 million in cash and cash equivalents and a $200.8 million corporate investment in funds managed by Deephaven.

The company had $965.0 million in stockholders’ equity as of June 30, 2007, equivalent to a book value of approximately $9.41 per diluted share.

During the second quarter of 2007, the company repurchased 2.9 million shares for approximately $47.9 million under the company’s $495 million stock repurchase program. To date, the company has repurchased 47 million shares for $460 million. The company announced today in a separate press release that its Board of Directors has authorized the repurchase of up to an additional $505 million of the company’s outstanding common shares. The company has $540 million available to repurchase shares under the revised program. The company cautions that there are no assurances that any further repurchases may actually occur.

“By achieving a steady revenue stream and keeping costs in line, Knight once again this quarter reached its profit margin goal of 20% within Global Markets,” Mr. Joyce said. “We also demonstrated our commitment to building shareholder value by buying back Knight stock throughout the second quarter, and that commitment continues with the $505 million extension of our repurchase program announced today. With Knight’s businesses exhibiting strength and our attention to our capital structure, we are well-positioned to deliver value for our shareholders.”

* * *

Copies of this earnings release and other information on the company can be obtained at the company’s website, www.knight.com. The company will conduct its second quarter 2007 earnings conference call for analysts, investors and the media at 9:00 a.m. Eastern Daylight Time (EDT) today, July 18, 2007. To access Knight’s earnings conference call, please dial 800.802.2266 for domestic callers or 913.312.1270 for international callers. When prompted, provide the passcode, which is 3438543. The conference call will be webcast live at 9:00 a.m. EDT for all investors and interested parties on Knight’s website. In addition, the company will release its monthly volume statistics for June 2007 on its website before the start of trading today at http://www.knight.com/ourLiquidity/volumeStatistics.asp.

* * *

About Knight

Knight Capital Group, Inc. (Nasdaq: NITE) is a leading financial services firm that provides voice and electronic access to the capital markets across multiple asset classes for buy-side, sell-side and corporate clients, and asset management for institutions and private clients. Our Global Markets business offers superior execution quality through natural liquidity, capital facilitation and trading technology, with comprehensive products and services that support the capital formation process. Our Asset Management business, Deephaven Capital Management, is a global multi-strategy alternative investment manager focused on delivering attractive risk-adjusted returns with low correlation to the broader markets. More information about Knight can be found at www.knight.com.

Presentation of Information in this Press Release

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 including, without limitation, the risks and uncertainties detailed under the headings “Certain Factors Affecting Results of Operations” and “Risks Affecting our Business” in the Company’s Annual Report on Form 10-K. Other risk factors include those associated with pursuing the substantially increased repurchase program, including, without limitation, whether or not the Company will complete the share repurchase program during any particular time frame or at all, whether the Company’s cash flow from earnings and cash on hand will be sufficient to fund the share repurchase program, the effect of pursuing the program on the Company’s balance sheet, the impact of market conditions, trading restrictions and alternative requirements for available cash, and the possibility that pursuing the program will limit the ability of the Company to pursue other opportunities.

CONTACTS

Margaret Wyrwas	Kara Fitzsimmons
Senior Managing Director,	Vice President,
Corporate Communications	Corporate Communications
& Investor Relations	201-356-1523 or
201-557-6954 or	kfitzsimmons@knight.com
mwyrwas@knight.com

KNIGHT CAPITAL GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the three months ended June 30,					For the six months ended June 30,
	2007			2006		2007			2006
Revenues
Commissions and fees	$	106,929,092		$	112,475,157	$	210,788,547		$	215,118,168
Net trading revenue		54,192,639			68,220,068		115,829,721			148,259,218
Asset management fees		29,116,156			14,075,709		89,830,111			84,586,752
Interest, net		4,169,037			2,775,335		8,986,980			6,089,307
Investment income and other		6,990,087			8,404,064		17,613,315			29,091,325
Total revenues		201,397,011			205,950,333		443,048,674			483,144,770
Transaction-based expenses
Execution and clearance fees		28,690,546			30,026,355		56,101,032			58,950,758
Soft dollar and commission recapture expense		14,468,448			18,684,431		29,005,096			37,130,756
Payments for order flow and ECN rebates		12,761,373			12,126,021		25,360,338			21,999,419
Total transaction-based expenses		55,920,367			60,836,807		110,466,466			118,080,933
Revenues, net of transaction-based expenses		145,476,644			145,113,526		332,582,208			365,063,837
Other direct expenses
Employee compensation and benefits		78,697,298			64,615,557		180,930,190			164,171,725
Communications and data processing		9,387,289			8,403,791		18,086,514			16,041,932
Depreciation and amortization		5,513,772			5,324,879		10,915,552			9,732,574
Professional fees		3,190,973			5,092,238		8,680,095			11,475,361
Business development		4,493,303			3,134,363		8,272,135			5,256,681
Occupancy and equipment rentals		3,550,286			3,398,114		7,005,512			6,750,599
Writedown of assets and lease loss accrual		(1,490,061	)		482,269		(1,490,061	)		8,479,703
Other		2,275,187			3,896,612		5,607,934			10,344,981
Total other direct expenses		105,618,047			94,347,823		238,007,871			232,253,556
Income from continuing operations before income taxes		39,858,597			50,765,703		94,574,337			132,810,281
Income tax expense		15,480,361			20,426,119		37,010,389			53,338,656
Net income from continuing operations		24,378,236			30,339,584		57,563,948			79,471,625
Loss from discontinued operations, net of tax		—			—		(1,332,818	)		—
Net income	$	24,378,236		$	30,339,584	$	56,231,130		$	79,471,625
Basic earnings per share from continuing operations	$	0.24		$	0.30	$	0.57		$	0.79
Diluted earnings per share from continuing operations	$	0.24		$	0.29	$	0.56		$	0.75
Basic and diluted earnings per share from discontinued operations	$	—		$	—	$	(0.01	)	$	—
Basic earnings per share	$	0.24		$	0.30	$	0.56		$	0.79
Diluted earnings per share	$	0.24		$	0.29	$	0.54		$	0.75
Shares used in computation of basic earnings per share		99,683,315			100,739,240		100,291,311			100,822,519
Shares used in computation of diluted earnings per share		102,523,827			105,397,197		103,540,053			105,358,680

KNIGHT CAPITAL GROUP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

	June 30, 2007			December 31, 2006
ASSETS
Cash and cash equivalents	$	125,552,681		$	214,759,915
Securities owned, held at clearing brokers, at market value		440,385,042			711,774,643
Receivable from brokers and dealers		410,815,715			372,897,376
Asset management fees receivable		58,240,104			112,204,064
Investment in Deephaven sponsored funds		200,750,859			187,573,291
Fixed assets and leasehold improvements at cost, less accumulated depreciation and amortization		64,426,641			66,449,617
Strategic investments		48,211,877			49,436,605
Goodwill		133,072,889			133,042,889
Intangible assets, less accumulated amortization		60,805,204			63,701,006
Other assets		216,599,858			116,374,310
Total assets	$	1,758,860,870		$	2,028,213,716
LIABILITIES & STOCKHOLDERS’ EQUITY
Liabilities
Securities sold, not yet purchased, at market value	$	416,625,320		$	693,071,230
Payable to brokers and dealers		120,525,119			47,852,721
Accrued compensation expense		169,803,152			227,846,699
Accrued expenses and other liabilities		86,881,567			96,956,122
Total liabilities		793,835,158			1,065,726,772
Stockholders’ equity
Class A common stock		1,502,023			1,449,588
Additional paid-in-capital		566,088,994			519,790,132
Retained earnings		868,090,455			811,859,325
Treasury stock, at cost		(470,655,760	)		(370,612,101	)
Total stockholders’ equity		965,025,712			962,486,944
Total liabilities and stockholders’ equity	$	1,758,860,870		$	2,028,213,716

KNIGHT CAPITAL GROUP, INC.

PRE-TAX EARNINGS BY BUSINESS SEGMENT*

Amounts in millions

(Unaudited)

	For the three months ended					For the six months ended
	June 30, 2007		June 30, 2006			June 30, 2007		June 30, 2006
Asset Management
Revenues	$	29.4	$	14.2		$	90.6	$	85.0
Expenses		23.1		11.9			65.4		56.0
Pre-Tax Earnings		6.3		2.3			25.2		29.0
Global Markets
Revenues		165.3		183.4			337.8		372.0
Expenses		132.6		134.4			269.0		274.5
Pre-Tax Earnings		32.7		49.0			68.8		97.5
Corporate
Revenues		6.8		8.4			14.6		26.1
Expenses		5.9		8.9			14.1		19.9
Pre-Tax Earnings		0.9		(0.5	)		0.5		6.2
Consolidated
Revenues		201.4		206.0			443.0		483.1
Expenses		161.5		155.2			348.5		350.3
Pre-Tax Earnings	$	39.9	$	50.8		$	94.6	$	132.8

* Totals may not add due to rounding.