Exhibit 10.3.7

STOCK OPTION AGREEMENT

This Stock Option Agreement (the “Agreement”) is entered into as of
                    , 2004, among Investment Technology Group, Inc., a Delaware
corporation (the “Company”) and                     , a member of the Board of
Directors of the Company (the “Participant”).

WHEREAS, the Board of Directors of the Company has approved the Company’s
Non-Employee Directors Stock Option Plan (the “Plan”), pursuant to which members
of the Board of Directors who are not employed by the Company or by any
subsidiary or parent of the Company are entitled to receive certain automatic
grants of options to purchase shares of the Company’s Common Stock.

WHEREAS, the Participant is a member of the Board of Directors who is not
employed by the Company or a subsidiary or parent of the Company and is not
otherwise ineligible to participate in the Plan.

NOW THEREFORE, the parties agree as follows:

Section 1.  Grant of Option.

1.1  The Company hereby grants to the Participant a nonqualified stock option
(the “Option”) to purchase                shares of the Company’s Common Stock
(the “Stock”), for a price per share of $         (the “Option Price”).  The
Option is intended to be a nonqualified stock option and shall not be treated as
an incentive stock option under the provisions of the Code.

1.2.  The Option is granted under the Plan.  All of the terms and conditions of
the Plan are hereby incorporated by reference in this Agreement as though fully
set forth herein.  Terms defined in the Plan but not in this Agreement shall
have the meanings set forth in the Plan.  To the extent of any conflict between
the provisions of this Agreement and those of the Plan, the provisions of the
Plan shall govern.  The Participant acknowledges receipt of a copy of the Plan,
accepts the Option subject to the terms and conditions set forth in the Plan and
this Agreement and consents to and agrees to comply with such terms and
conditions.

1.3.  This Option is granted for no consideration other than the services of the
Participant as a member of the Board of Directors and the Participant’s
agreements set forth herein.

1.4.  It is intended that the grant of the Option be exempt from the provisions
of Section 16(b) of the Exchange Act pursuant to the provisions of Rule 16b-3.

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Section 2.  Terms of Option.

2.1.  The Option (to the extent not earlier exercised or forfeited) will expire
at 5:00 p.m., Eastern time on              , 2009; provided, however, if the
Participant ceases to serve as a Director of the Company prior to such date,
except as otherwise provided in Section 9(d) of the Plan, the Option will expire
as follows: (i) if the Participant ceases to serve as a Director of the Company
due to death, disability or retirement at or after age 65, the date 12 months
after such cessation of service, but in no event later than                   ,
2009; and (ii) if the Participant ceases to serve as a Director of the Company
for any reason other than due to death, disability or retirement at or after age
65, at the date 60 days after such cessation of service, but in no event later
than                       , 2009.

2.2.  The Option will vest and become exercisable in three equal annual
installments, beginning on the first anniversary of the Grant Date.  In the
event the Participant ceases to serve as a Director of the Company by reason of
death or disability, the Option shall become vested and exercisable in full at
the time of such termination.  In the event the Participant ceases to serve as a
Director of the Company for any other reason, that portion of the Option that
has not yet vested shall be forfeited.

2.3.  Written notice of exercise of the Option shall be given to the Secretary
of the Company and shall be deemed to have been received either when delivered
personally to the office of the Secretary or at 11:58 p.m. on the date of any
U.S. Postal Service postmark on the notice, whichever is earlier.  Such notice
shall be irrevocable and must be accompanied by the payment of the purchase
price as provided in Section 2.4 below.  Upon the exercise of the Option, the
Company will transfer or will cause to be issued a certificate or certificates
for the Common Stock being purchased as promptly as practicable.

2.4.  The purchase price of Stock purchased by the Participant upon exercise of
the Option (the “Option Shares”) shall be paid in full to the Company at the
time of such exercise in cash (including by check) or by the surrender of Stock
(including the surrender of Option Shares) or a combination thereof; provided,
however, that Stock held for less than six months may be surrendered in payment
or partial payment of the purchase price only with the approval of the Board of
Directors.

Section 3.  Adjustments.  The number and kind of shares purchasable upon
exercise of the Option, and other terms of the Option, shall be appropriately
adjusted, in the discretion of the Board of Directors, in accordance with
Section 7 of the Plan, in order to prevent dilution or enlargement of the rights
of the Participant.

Section 4.  Representations of Participant.  The Participant represents and
warrants that the Participant is acquiring the Option for his own account and
not with a view to distribution of this Option or the Option Shares. As a
condition to the exercise of the Option, and in the event that the Option Shares
have not yet been registered under the Securities Act of 1933, as amended (the
“Act”) at the time they are issued, the Company may require the Participant to
make any representation and/or warranty to the Company as may, in

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the judgment of counsel to the Company, be required under any applicable law or
regulation, including but not limited to a representation and warranty that the
Option Shares are being acquired only for investment and without any present
intention to sell or distribute such shares if, in the opinion of counsel for
the Company, such a representation is required under the Act or any other
applicable law, regulation or rule of any governmental agency.

Section 5.   Nontransferability.  Neither the Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate or convey the Option,
which Option is, and all rights under this Agreement are, expressly declared to
be unassignable and nontransferable, other than by will or under the laws of
descent and distribution.  No part of the Option shall be subject to seizure or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by the Participant or any other person, nor be transferable by
operation of law in the event of the Participant’s or any other person’s
bankruptcy or insolvency.

Section 6.  Miscellaneous.

6.1  Neither the Participant nor any other person shall acquire by reason of the
Option or the Option Shares any right in or title to any assets, funds or
property of the Company whatsoever including, without limiting the generality of
the foregoing, any specific funds or assets which the Company, in its sole
discretion, may set aside in anticipation of a liability.  No trust shall be
created in connection with or by the granting of the Option or the purchase of
any Option Shares, and any benefits which become payable hereunder shall be paid
from the general assets of the Company.  The Participant shall have only a
contractual right to the amounts, if any, payable pursuant to this Agreement,
unsecured by any asset of the Company or any of its affiliates.

6.2.  The Participant authorizes the Company to withhold, in accordance with any
applicable law, from any compensation payable to him any taxes required to be
withheld by federal, state or local law upon the issuance of Option Shares or
the payment of money pursuant to the exercise of the Option.  The Participant
may elect to have the Company withhold Option Shares to pay any applicable
withholding taxes resulting from the exercise of the Option, in accordance with
any rules or regulations adopted by the Board of Directors and then in effect.

6.3.  Shares issued pursuant to exercise of the Option shall be shares of Stock,
the issuance of which is registered under the Act.

6.4.  The terms of this Agreement shall be binding upon the executors,
administrators, heirs, successors, transferees and assignees of the Participant
and the Company.

6.5.  In any action at law or in equity to enforce any of the provisions or
rights under this Agreement, including any arbitration proceedings to enforce
such provisions or rights, the unsuccessful party to such litigation or
arbitration, as determined by the court in a

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final judgment or decree, or by the panel of arbitrators in its award, shall pay
the successful party or parties all costs, expenses and reasonable attorneys’
fees incurred by the successful party or parties (including without limitation
costs, expenses and fees on any appeals), and if the successful party recovers
judgment in any such action or proceeding such costs, expenses and attorneys’
fees shall be included as part of the judgment.

6.6.  The Participant agrees to perform all acts and execute and deliver any
documents that may be reasonably necessary to carry out the provisions of this
Agreement, including but not limited to all acts and documents related to
compliance with federal and/or state securities laws.

6.7.  For convenience, this Agreement may be executed in any number of identical
counterparts, each of which shall be deemed a complete original in itself and
may be introduced in evidence or used for any other purposes without the
production of any other counterparts.

6.8.  This Agreement, together with the Plan, sets forth the entire agreement
between the parties with reference to the subject matter hereof, and there are
no agreements, understandings, warranties, or representations, written, express
or implied, between them with respect to the Option other than as set forth
herein or therein, all prior agreements, promises, representations and
understandings relative thereto being herein merged.

6.9.  Nothing expressed or implied herein is intended or shall be construed to
confer upon or give to any person, other than the parties hereto, any right,
remedy or claim under or by reason of this Agreement or of any term, covenant or
condition hereof.

6.10.  This Agreement may be amended, modified, superseded, canceled, renewed or
extended and the terms or covenants hereof may be waived only by a written
instrument executed by the parties hereto or, in the case of a waiver, by the
party waiving compliance.  Any such written instrument must be approved by the
Board of Directors to be effective as against the Company.  The failure of any
party at any time or times to require performance of any provision hereof shall
in no manner affect the right at a later time to enforce the same.  No waiver by
any party of the breach of any term or provision contained in this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be, or construed as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other term or covenant contained in this Agreement.

6.11.  Any notice to be given hereunder shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, and, if to
the Company, addressed to it at 380 Madison Avenue, Fourth Floor, New York, New
York 10017, Attention: Secretary, and, if to the Participant, addressed to him
at the address set forth below his signature hereto, or to such other address of
such party as that party may designate by written notice to the other.

6.12.  Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or

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unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

IN WITNESS WHEREOF, the parties hereto have executed this Stock Option Agreement
as of the date first above written.

INVESTMENT TECHNOLOGY GROUP, INC.

 

 

 

 

 

By:

 

 

 

 

Name: Raymond L. Killian, Jr.,

 

 

Title: Chairman

 

 

 

 

 

 

{Insert Name of Director}

 

 

 

Address for Notices:

 

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