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.













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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