Knight Capital 8-K Knight Capital Group Announces Earnings of $0.52 Per Diluted Share for Fourth Quarter of 2007

Exhibit 99.1

KNIGHT CAPITAL GROUP ANNOUNCES EARNINGS OF $0.52 PER DILUTED SHARE FOR FOURTH QUARTER OF 2007

Global Markets generated fourth quarter revenues of $220.9 million, driven by electronic access and trading services, a 42% increase from fourth quarter 2006 revenues of $155.4 million

Pre-tax earnings from Global Markets increased 214% to $79.4 million in the fourth quarter 2007 from $25.3 million in the fourth quarter 2006; Pre-tax margins rose to 36% in the fourth quarter 2007 from 16% in the fourth quarter 2006

Asset Management recorded fourth quarter 2007 pre-tax loss of $426,000 amid continuing weakness in broader financial markets; For 2007, Deephaven achieved blended fund performance of 6.8%

In 2007, Global Markets revenues of $751.4 million and pre-tax earnings of $180.4 million are the highest annual totals since 2000

JERSEY CITY, New Jersey (January 16, 2008) – Knight Capital Group, Inc. (Nasdaq: NITE) today reported earnings of $49.6 million, or $0.52 per diluted share, and pre-tax income of $78.9 million for the fourth quarter of 2007. The results include a non-recurring tax benefit of $0.02 per diluted share. Excluding this item, earnings for the fourth quarter of 2007 were $0.50 per diluted share.

For the fourth quarter of 2006, the company reported earnings of $47.4 million, or $0.45 per diluted share, and pre-tax income of $71.6 million. The results included a $0.09 per diluted share gain from the sale of the remaining strategic investment in shares of the International Securities Exchange, Inc. (ISE) and a non-recurring tax benefit of $0.03 per diluted share. Excluding these two items, earnings for the fourth quarter of 2006 were $0.33 per diluted share.

Revenues for the fourth quarter of 2007 were $257.3 million, compared to $261.5 million for the fourth quarter of 2006.

“I am extremely proud of the results we achieved in the fourth quarter of 2007,” said Thomas M. Joyce, Chairman and CEO, Knight Capital Group. “In Global Markets, Knight witnessed a powerful confluence of events in the markets that favored our hybrid market model. First, the volatility that began over the summer months continued into the fourth quarter. Second, our clients continued to show preference for Knight as a trade execution destination which was reflected in sustained high trading volumes. In Asset Management, Deephaven rebounded from its first down quarter in two and a half years to post positive blended fund returns for this quarter. On a consolidated basis, Knight achieved 31 percent pre-tax margins. Finally, our employees simply outdid themselves to provide clients with high quality transactions and improving returns in an uncertain market environment.”

	Q4 2007		Q4 2006
Revenues (in $ thousands)	257,337		261,452
Pre-tax margin	31	%	27	%
Net income (in $ thousands)	49,563		47,414
Diluted EPS ($)	0.52		0.45
U.S. equity dollar value traded (in $ millions)	1,088,001		497,153
U.S. equity trades executed (in thousands)	105,273		58,680
Average daily U.S. equity trades (in thousands)	1,671		939
Nasdaq and Listed equity shares traded (in millions)	34,271		21,991
OTC Bulletin Board and Pink Sheet shares traded (in millions)	183,942		160,589
Average revenue capture per U.S. equity dollar value traded (bps)	1.6		2.0
Average month-end balance of assets under management (in $ millions)	4,202.9		4,183.9
Quarterly fund return to investors*	1.4	%	7.1	%
*  Quarterly fund return represents the blended quarterly return across all assets under management in the Deephaven funds
	YTD 2007		YTD 2006
Revenues (in $ thousands)	905,324		956,289
Pre-tax margin	22	%	27	%
Net income (in $ thousands)	122,240		158,346
Diluted EPS ($)	1.21		1.49
U.S. equity dollar value traded (in $ millions)	3,178,626		2,033,574
U.S. equity trades executed (in thousands)	332,864		225,512
Average daily U.S. equity trades (in thousands)	1,334		902
Nasdaq and Listed equity shares traded (in millions)	113,599		94,348
OTC Bulletin Board and Pink Sheet shares traded (in millions)	821,827		1,063,089
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)	4,087.8		3,420.4
Annual fund return to investors*	6.8	%	22.8	%

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

Global Markets

During the fourth quarter of 2007, Global Markets generated total revenues of $220.9 million, compared to $155.4 million in the fourth quarter of 2006. In the fourth quarter of 2007, Global Markets reported pre-tax income of $79.4 million, compared to pre-tax income of $25.3 million in the fourth quarter of 2006.

“The fourth quarter was the best from a revenue standpoint for Global Markets in my tenure at Knight,” Mr. Joyce said. “The continued hard work developing our electronic and voice trade execution services, coupled with Knight’s maturation into an all-market U.S. equity trade execution destination, allowed us to grow and diversify our client base. As the volatility fluctuated throughout the fourth quarter, we gained market share while maintaining high quality trade execution standards. Diversification, both from a revenue and client perspective, better prepared us to withstand continued softness in areas such as Bulletin Boards and Pink Sheets. The results are even more remarkable in that Global Markets achieved pre-tax margins of 36 percent for the fourth quarter of 2007.”

At the close of business on January 14, 2008, Knight completed the acquisition of EdgeTrade Inc., a leading agency-only trade execution and algorithmic software firm. EdgeTrade’s algorithms, including smart order execution, benchmark and participation strategies, are now available on its broker-neutral trading platform Knight Direct EMS™.

Asset Management

During the fourth quarter of 2007, the Asset Management business segment, Deephaven Capital Management, generated $28.2 million in asset management fees, compared to $78.8 million in the same period a year ago. In the fourth quarter of 2007, Deephaven reported a pre-tax operating loss of $426,000, compared to pre-tax operating earnings of $27.4 million in the fourth quarter of 2006. Deephaven had approximately $3.9 billion under management at December 31, 2007, down from the $4.2 billion under management at December 31, 2006. Deephaven had approximately $4.0 billion under management at January 1, 2008.

As noted in its Form 8-K filing on August 27, 2007, the company, at its sole discretion, made the determination that if a Deephaven fund with a six-month performance period incurs losses in the performance period ending December 31, 2007, Deephaven will return all or a portion of the incentive allocation fees collected from investors in that fund for the six-month performance period ended June 30, 2007. As a result, Deephaven repaid approximately $19 million in fees in the fourth quarter of 2007.

“In Asset Management, continued uncertainty in the credit markets resulted in weaker Deephaven fund performance during the fourth quarter,” Mr. Joyce said. “The Event Fund, for example, was affected by more stringent lending standards and a subsequent lack of deal activity. That being said, Deephaven funds performed comparably to their benchmark indexes. Over the course of the year, Deephaven continued to execute in terms of diversifying the fund offering, adding new fund investors and attracting talent.”

On January 10, 2008, Deephaven Managing Partners, LLC, an entity owned and controlled by three senior managers of Deephaven Capital Management, gave notice to the company that it is exercising its option to obtain a 49% interest in a new limited liability company to which the company’s interests in Deephaven would be contributed. For more information, please refer to Knight’s SEC Form 8-K which was furnished on January 11, 2008.

Corporate

In the fourth quarter of 2007, the Corporate segment reported a pre-tax loss of $41,000, compared to pre-tax earnings of $18.9 million in the fourth quarter of 2006. Included in the fourth quarter 2006 results is a pre-tax gain of $15.8 million, or approximately $0.09 per diluted share, from the sale of the company’s remaining equity ownership in the ISE.

The company’s corporate investment in the Deephaven funds earned $4.9 million pre-tax during the fourth quarter of 2007, down from $9.5 million pre-tax during the fourth quarter of 2006. As of December 31, 2007, the company had $222.4 million in cash and cash equivalents and an $83.7 million corporate investment in funds managed by Deephaven.

During the fourth quarter of 2007, the company redeemed a total of $120.0 million of its investment in the Deephaven funds, of which $85.0 million is included as a Receivable from Deephaven sponsored funds on the Consolidated Statement of Financial Condition at December 31, 2007.

In the fourth quarter of 2007, the company borrowed $70.0 million under its existing $140.0 million credit facility. The proceeds were used to finance share repurchases and other general corporate purposes.

“We are energized by our accomplishments of 2007 and, looking ahead, expect to see growth in several areas,” Mr. Joyce said. “In Global Markets, we’ll continue to invest in trade execution services that increase efficiencies and allow us to improve client service. Expansion in Europe will accelerate as recent successes and changing market conditions present new opportunities. In Asset Management, Deephaven will continue to develop new investment strategies, particularly in Asia. Finally, we expect volatility to remain high in 2008 as the credit market turmoil continues and the election year builds to a resolution.”

The company had $885.4 million in stockholders’ equity as of December 31, 2007, equivalent to a book value of $9.35 per diluted share. The company had a book value of $9.06 per diluted share as of December 31, 2006.

During the fourth quarter of 2007, the company repurchased 6.7 million shares for approximately $89.4 million under the company’s $1.0 billion stock repurchase program. To date, the company has repurchased 59.2 million shares for $626.2 million. The company has $373.8 million available to repurchase shares under the program. The company cautions that there are no assurances that any further repurchases may actually occur.

* * *

Copies of this earnings release and other company information can be obtained on Knight’s website,http://www.knight.com. The company will conduct its fourth quarter of 2007 earnings conference call for analysts, investors and the media at 9:00 a.m. Eastern Standard Time (EST) today, January 16, 2008. To access Knight’s earnings conference call, please dial 877.741.4251 for domestic callers or 719.325.4820 for international callers. When prompted, provide the passcode, which is 5059041. The conference call will be webcast live at 9:00 a.m. EST for all investors and interested parties on Knight’s website. In addition, the company will release its monthly volume statistics for December 2007 on its website before the start of trading today athttp://www.knight.com/ourliquidity/volumestatistics.asp.

* * *

About Knight

Knight Capital Group, Inc. (Nasdaq: NITE) is a leading financial services firm that provides electronic and voice 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 atwww.knight.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 not historical facts, and are based on current expectations, estimates and projections about the Company’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, 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 including, without limitation, risks associated with the costs, integration, performance and operation of the business acquired by the Company. 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. Readers should carefully review 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 and under the heading “Risk Factors” in the Company’s Form 10-Q’s for the quarterly periods ended June 30, 2007 and September 30, 2007, respectively, and in other reports or documents the Company files from time to time with the Securities and Exchange Commission.

CONTACTS

Margaret Wyrwas	Kara Fitzsimmons	Jonathan Mairs
Senior Managing Director,	Director,	Vice President,
Corporate Communications	Media Relations	Corporate Communications
& Investor Relations	201-356-1523 or	201-356-1529 or
201-557-6954	kfitzsimmons@knight.com	jmairs@knight.com
mwyrwas@knight.com

KNIGHT CAPITAL GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the three months ended December 31,					For the year ended December 31,
	2007			2006 *		2007			2006 *
	(In thousands, except per share amounts)
Revenues
Commissions and fees	$	105,234		$	97,851	$	447,495		$	410,394
Net trading revenue		112,709			52,657		286,199			243,761
Asset management fees, net		28,184			78,765		116,777			213,888
Interest, net		3,766			4,762		17,378			16,027
Non-operating gain from subsidiary stock issuance		—			—		8,757			—
Investment income and other, net		7,444			27,417		28,718			72,219
Total revenues		257,337			261,452		905,324			956,289
Transaction-based expenses
Execution and clearance fees		24,605			25,857		120,261			106,908
Soft dollar and commission recapture expense		17,106			15,291		61,367			70,537
Payments for order flow and ECN rebates		10,226			10,529		54,564			42,191
Total transaction-based expenses		51,937			51,677		236,192			219,636
Revenues, net of transaction-based expenses		205,400			209,775		669,132			736,653
Other direct expenses
Employee compensation and benefits		93,761			105,635		346,476			352,353
Communications and data processing		8,922			8,594		36,956			33,120
Depreciation and amortization		5,533			5,462		22,075			20,641
Professional fees		5,399			5,356		19,360			20,568
Business development		4,193			5,715		15,997			14,343
Occupancy and equipment rentals		3,393			3,621		14,083			13,536
Writedown of assets and lease loss accrual		(1,116	)		—		(2,470	)		8,480
Other		6,407			3,832		15,418			17,101
Total other direct expenses		126,492			138,215		467,895			480,142
Income from continuing operations before income taxes		78,908			71,560		201,237			256,511
Income tax expense		29,345			24,146		77,560			98,165
Net income from continuing operations		49,563			47,414		123,677			158,346
Loss from discontinued operations, net of tax		—			—		(1,437	)		—
Net income	$	49,563		$	47,414	$	122,240		$	158,346
Basic earnings per share from continuing operations	$	0.54		$	0.47	$	1.27		$	1.56
Diluted earnings per share from continuing operations	$	0.52		$	0.45	$	1.23		$	1.49
Basic and diluted earnings per share from discontinued operations	$	—		$	—	$	(0.01	)	$	—
Basic earnings per share	$	0.54		$	0.47	$	1.26		$	1.56
Diluted earnings per share	$	0.52		$	0.45	$	1.21		$	1.49
Shares used in computation of basic earnings per share		91,828			101,818		97,050			101,420
Shares used in computation of diluted earnings per share		94,722			106,189		100,796			106,243

“Continuing operations” include the company’s two operating 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.

* Certain reclassifications have been made to prior years’ Consolidated Statements of Operations in order to conform to the current year presentation.

Such reclassifications had no effect on previously reported Net income.

KNIGHT CAPITAL GROUP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

	December 31, 2007			December 31, 2006
	(In thousands)
ASSETS
Cash and cash equivalents	$	222,435		$	214,760
Securities owned, held at clearing brokers, at market value		412,565			711,775
Receivable from brokers and dealers		382,786			372,897
Asset management fees receivable		27,588			112,204
Investment in Deephaven sponsored funds		83,732			187,573
Receivable from Deephaven sponsored funds		85,000			—
Fixed assets and leasehold improvements at cost, less accumulated depreciation and amortization		62,073			66,450
Strategic investments		73,704			49,437
Goodwill		132,832			133,043
Intangible assets, less accumulated amortization		57,845			63,701
Deferred compensation investments		85,504			31,586
Other assets		127,121			84,789
Total assets	$	1,753,185		$	2,028,215
LIABILITIES & STOCKHOLDERS’ EQUITY
Liabilities
Securities sold, not yet purchased, at market value	$	335,280		$	693,071
Payable to brokers and dealers		117,243			47,853
Accrued compensation expense		228,275			227,847
Accrued expenses and other liabilities		117,009			96,957
Long term debt		70,000			—
Total liabilities		867,807			1,065,728
Stockholders’ equity
Class A common stock		1,509			1,450
Additional paid-in-capital		587,025			519,790
Retained earnings		934,099			811,859
Treasury stock, at cost		(637,255	)		(370,612	)
Total stockholders’ equity		885,378			962,487
Total liabilities and stockholders’ equity	$	1,753,185		$	2,028,215

KNIGHT CAPITAL GROUP, INC.

PRE-TAX EARNINGS BY BUSINESS SEGMENT*

Amounts in millions

(Unaudited)

	For the three months ended					For the year ended
	December 31, 2007			December 31, 2006		December 31, 2007		December 31, 2006
Asset Management
Revenues	$	28.5		$	79.1	$	118.2	$	214.9
Expenses		28.9			51.7		101.7		140.0
Pre-Tax Earnings		(0.4	)		27.4		16.5		74.8
Global Markets
Revenues		220.9			155.4		751.4		674.8
Expenses		141.5			130.2		571.1		524.5
Pre-Tax Earnings		79.4			25.3		180.4		150.3
Corporate
Revenues		7.9			27.0		35.7		66.6
Expenses		8.0			8.0		31.3		35.3
Pre-Tax Earnings		—			18.9		4.3		31.4
Consolidated
Revenues		257.3			261.5		905.3		956.3
Expenses		178.4			189.9		704.1		699.8
Pre-Tax Earnings	$	78.9		$	71.6	$	201.2	$	256.5

* Totals may not add due to rounding.