TradeStation Group Reports Record Revenues, Net Income and EPS for 2005 Fourth Quarter and Year

2005 Income Before Income Taxes Increases 120% and Pre-Tax Margin Increases 64%

Plantation FL, February 14, 2006—TradeStation Group, Inc. (NasdaqNM: TRAD) today reported for the 2005 fourth quarter record net revenues of $27.3 million, record income before income taxes of $10.3 million, record net income of $7.3 million, record net income per share (diluted) of 16 cents, record brokerage accounts of nearly 24,000, and record daily average revenue trades (DARTs) of nearly 49,000. For the 2005 year, the company reported record net revenues of $97.0 million, record income before income taxes of $32.5 million, record net income of $21.1 million, and record net income per share (diluted) of 48 cents.

TradeStation Group’s 2005 fourth quarter net income of $7.3 million, or 16 cents per share (diluted), was a 106% increase from 2004 fourth quarter net income of $3.6 million, or 8 cents per share (diluted). Net income for the 2005 fourth quarter included a $927,000 reversal of a valuation allowance on deferred income tax assets which accounted for 2 cents of the company's net income per share (diluted). The company’s 2005 fourth quarter income before income taxes of $10.3 million was a 79% increase from 2004 fourth quarter income before income taxes of $5.7 million.

TradeStation Group’s 2005 net income was $21.1 million, or 48 cents per share (diluted), as compared to 2004 net income of $14.7 million, or 33 cents per share (diluted). Given that in 2005 the company’s effective income tax rate was approximately 35.2%, as compared to an effective rate of less than 1% in 2004, the company believes that income before income taxes is a more meaningful year-over-year comparison. TradeStation Group’s 2005 income before income taxes was $32.5 million, a 120% increase from 2004 income before income taxes of $14.8 million.

TradeStation Group’s 2005 fourth quarter net revenues of $27.3 million were a 35% increase from 2004 fourth quarter net revenues of $20.2 million, and the company’s 2005 annual net revenues of $97.0 million were a 34% increase from 2004 annual net revenues of $72.3 million.

The company’s pre-tax margin increased to 38% in the 2005 fourth quarter, as compared to a pre-tax margin of 28% in the 2004 fourth quarter. The company’s pre-tax margin for the 2005 year increased by 64% -- to a 34% pre-tax margin in 2005 from a 20% pre-tax margin in 2004. Pre-tax margin is determined by dividing the company’s income before income taxes by its net revenues.

“We are very pleased with our record fourth quarter and year-end results,” said David Fleischman, CFO of TradeStation Group.

TradeStation Reports Record DARTs and Total Accounts

For the 2005 fourth quarter, TradeStation experienced the following year-over-year daily trading growth results with respect to equities, futures and forex accounts:

“We attribute our year-over-year growth in DARTs to consistent account growth, the robustness of our high-end client base and the diversity of our service offering,” said Fleischman.

The company also published today, in a separate announcement, its DARTs and Total Client Assets for the month of January 2006.

TradeStation had 23,973 brokerage accounts at the end of the 2005 fourth quarter, a 31% increase year over year.

TradeStation’s Average Client Trades Over 500 Times Per Year and Has an Average Account Balance of $81,000 for Equities and $19,000 for Futures

TradeStation’s brokerage client account metrics are among the very best in the industry. TradeStation brokerage clients generated the following client account metrics in the 2005 fourth quarter:

While the average TradeStation account traded about 530 times per year, or 44 times per month, the average Ameritrade and E-Trade account traded about 10 times per year, or less than one time per month. Also, TradeStation’s average assets per equities account of $81,000 was substantially higher than the average assets per account of Ameritrade and E-Trade.

Company Provides 2006 Business Outlook

TradeStation today also published its 2006 Business Outlook.

The company’s first quarter and full-year 2006 Business Outlook estimated ranges are as follows:

The company’s first quarter and full-year 2006 Business Outlook is based on numerous assumptions, including: basing the midpoints of the ranges, in part, on recent trading activity levels and market conditions; anticipated growth and trading activity of active trader equities and futures accounts; the effects of the lowering of thresholds for waiving the monthly platform fee charged to brokerage clients and of a recently-modified futures commission pricing structure; the rate of growth and impact of the company’s direct-access options execution service offering; the launch date of the company’s upgraded forex offering and the rate of growth and impact of new forex accounts and trading activity; interest rates (and the extent to which they will or will not increase or decrease); the cost of ongoing litigation and the amount of any judgments, awards, settlements or regulatory fines or sanctions; the effect of new accounting rules that require recording of compensation expenses with respect to stock-based awards granted to employees; the timing of expenses relating to company growth initiatives as compared to the timing of anticipated benefits from those initiatives; and numerous other assumptions concerning the company’s business and industry, market conditions, and various decisions, acts or failures to act both within and outside of the company’s control. All assumptions, expectations and beliefs relating to the Business Outlook are forward-looking in nature and actual results may differ materially from those estimated, including, but not limited to, as a result of, or as indicated by, the issues, uncertainties and risk factors set forth and referenced above and below.

Conference Call/Webcast

At 11:00, a.m., Eastern Time, today, the senior management of TradeStation Group will conduct an analyst conference call to discuss the company's 2005 fourth quarter and year-end results and its 2006 Business Outlook. All company shareholders and the public are invited to listen. The telephone conference will be broadcast live via the Internet at www.TradeStation.com. The live webcast will be accompanied by slides of graphs and charts. A rebroadcast of the call will be accessible for approximately 90 days.

About TradeStation Group, Inc.

TradeStation Group, Inc. (NasdaqNM: TRAD), through its principal operating subsidiary, TradeStation Securities, Inc., offers the TradeStation platform to the active trader and certain institutional trader markets. TradeStation is an electronic trading platform that offers state-of-the-art “direct market access” (DMA) or “direct-access” order execution and enables clients to design, test, optimize, monitor and automate their own custom trading strategies. In 2005, TradeStation was named Best Stock Brokerage and Best Futures Brokerage and, for the third year in a row, Best Direct-Access Stock Broker, Best Direct-Access Futures Broker, Best Professional Platform and Best Institutional Platform, in Technical Analysis of Stocks and Commodities magazine. The trading platform currently offers streaming real-time Equities, Options, Futures and Forex market data.

TradeStation Securities, Inc. (Member NASD, NYSE, SIPC, NSCC, DTC, OCC & NFA) is a licensed securities broker-dealer and a registered futures commission merchant, and also a member of the American Stock Exchange, Archipelago Exchange, Boston Options Exchange, Chicago Board Options Exchange, Eurex US, International Securities Exchange, Pacific Exchange and Philadelphia Stock Exchange. The company’s other operating subsidiary, TradeStation Technologies, Inc., develops and offers strategy trading software tools and subscription services.

Forward-Looking Statements – Issues, Uncertainties and Risk Factors

This press release, including the 2006 Business Outlook, and today’s earnings conference call, contain statements and estimates that are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this press release, or the conference call, the words “anticipate(s),” “anticipated,” “anticipation,” “assume(s),” “assumption(s),” “become(s),” “belief(s),” “believe(s),” “believed,” “could,” “designed,” “estimate,” “estimates,” “estimated,” “expect(s),” “expected,” “expectation(s),” “going forward,” “future,” “hopeful,” “hope(s),” “intend(s),” “intended,” “look forward,” “may,” “might,” “opportunity,” “opportunities,” “outlook(s),” “pending,” “plan(s),” “planned,” “potential,” “scheduled,” “shall,” “should,” “think(s),” “to be,” “upcoming,” “well-positioned,” “will,” “wish,” “would,” and similar expressions, if and to the extent used, are intended to identify forward-looking statements. All forward-looking statements are based largely on current expectations and beliefs concerning future events that are subject to substantial risks and uncertainties. Actual results may differ materially from the results herein suggested or suggested in the conference call. Factors that may cause or contribute to the various potential differences include, but are not limited to, the following:

Contact —

David H. Fleischman
Chief Financial Officer
TradeStation Group, Inc.
954-652-7000

TRADESTATION GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME*

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