Lava Announces Major Enhancements to Sell-Side Products; New Functionality Yields Significant Growth in Market Share.

NEW YORK -- Lava Trading Inc., the innovative technology firm that develops high-performance trading solutions for the financial services industry, today announced the completion of significant enhancements to its sell-side products, including the Lava ColorBook(R) system and Lava Trading Floor(R).

The updates to ColorBook, Lava Trading Floor and other products reflect the continual shift toward electronic trading and the need for sophisticated trading solutions. The additional functionality, introduced over the past year, has resulted in marked growth in Lava's Listed market share. For the month of December, Lava had a year-over-year increase of 103 percent in shares traded. There was also corresponding growth of 62 percent in the number of clients using the products.

"As a technology leader on Wall Street, we are continuously refining our product offerings to meet the evolving needs of our customers and the marketplace," said Richard Korhammer, CEO, Lava Trading Inc. "The enhancements to these already robust trading platforms provide the sell-side with truly industry-leading trading functionality and are indicative of the rapidly changing nature of the equities marketplace, most notably the proliferation of algorithmic trading and sourcing more liquidity within the NBBO spread."

The patented ColorBook system and Lava Trading Floor comprise the core of Lava's comprehensive suite of OTC and Listed Trading solutions. ColorBook integrates the full depth of order books from ECNs, exchanges and other liquidity sources into a premium, high-performance, real-time data feed. Lava Trading Floor, a high-performance front-end trader workstation, interacts with the ColorBook system, offering traders a consolidated order book in a unified market data montage.

In addition to fulfilling regulatory requirements, such as Regulation SHO and Regulation NMS, refinements to the sell-side products focused on several key areas. These included refining technology for accessing Listed liquidity, improving access to hidden liquidity, enhancing price improvement opportunities, and expanding Lava's algorithmic connectivity. Lava issued several software releases to fine tune smart routing to specifically improve interaction with traditional Listed market centers, and to expose more Listed routing options for electronic markets.

Specifically for ColorBook, DarkBook(R), and LavaPI(R), the updates focus on further enhancing Lava's network-effect functionality, through the introduction of two new features that will allow a user to trade at the NBBO or better and to seek hidden liquidity. The Spread or Better order feature allows special orders to seek price improvement exclusively for a period of time before reverting to their normal algorithms. An advanced ping feature, Continuous Ping, lets users more effectively access hidden liquidity and seek price improvement. Other refinements, most notably the Sweep Duration feature, focus on increasing execution efficiency and minimizing market impact.

The recently completed update of Lava Trading Floor was one of two significant releases of the product in 2005. The enhancements focus primarily on order routing, order management, market-making functionality and regulatory-related improvements. Specifically, Lava expanded Trading Floor's algorithmic offerings and now supports an extensive number of algorithmic routes. Enhancements to order management capabilities include the introduction of Imbalance Windows for various venues, Order View screens for monitoring orders, tickets and executions, and multiple front-end changes to enhance the user's experience, reduce risk and increase efficiency. The introduction of Action Buttons assists with market making by allowing various actions to be applied to a selected order. As a result, users can maintain their quotes and participate in the market with fewer clicks, refining the trader's workflow.

About Lava Trading Inc.

Headquartered in New York City, with locations in California, Connecticut and the United Kingdom, Lava Trading Inc. is an innovative technology firm that develops high-performance trading solutions for the financial services industry. Lava products are created as true ASP solutions built to withstand maximum volumes in the most volatile conditions. As a cost effective and neutral provider, Lava's OTC, Listed and Foreign Exchange solutions are used by leading broker/dealers, including most of the top U.S. investment banks, as well as market makers, hedge funds and institutional investors. With its patented technology and capital markets expertise, Lava creates value-added trading solutions that combine speed, intelligence and reliability. Lava is a wholly owned, independently-operated subsidiary of Citigroup, Inc. (NYSE: C) and is a member NASD/SIPC. For more information, visit www.lavatrading.com.