Siebert Financial Corp.
                             1997 Stock Option Plan


     1. Purpose.  The purpose of this Siebert  Financial Corp. 1997 Stock Option
Plan (the "Plan") is to advance the interests of Siebert  Financial  Corp.  (the
"Company")  and its  shareholders  by providing  officers  and  employees of the
Company and its  subsidiaries  with a larger personal and financial  interest in
the success of the Company through the grant of stock options.

     2.  Administration.  The Plan shall be  administered  by a  committee  (the
"Committee") consisting of at least two members of the Board of Directors of the
Company (the "Board"). The Committee shall be constituted in such a manner as to
satisfy the  requirements  of applicable law, the provisions of Rule 16b-3 under
the  Securities  Exchange Act of 1934, as amended (the "Exchange  Act"),  or any
successor  rule, and the provisions of Section  162(m)(4)(C)(i)  of the Internal
Revenue Code of 1986, as amended (the "Code"). The Committee shall be appointed,
and vacancies shall be filled, by the Board. The Committee shall have full power
and  authority to (i) select the  individuals  to whom  Options (as  hereinafter
defined) may be granted under the Plan;  (ii)  determine the number of shares of
Common Stock (as hereinafter  defined)  covered by each Option and the terms and
conditions,  not  inconsistent  with the provisions of the Plan,  governing such
Option;  (iii)  interpret  the  Plan and any  Option  granted  thereunder;  (iv)
establish  such  rules  and   regulations  as  it  deems   appropriate  for  the
administration of the Plan; and (v) take such other action as it deems necessary
or desirable  for the  administration  of the Plan.  Any action of the Committee
with respect to the  administration of the Plan shall be taken by majority vote.
The Committee's  interpretation and construction of any provision of the Plan or
the terms of any Option shall be conclusive and binding on all parties.

     3.  Participants.  Options may be granted  under the Plan to any officer or
employee of the Company.

     4. The Shares. The shares that may be delivered or purchased under the Plan
shall not exceed an aggregate of 525,000 shares (subject to adjustment  pursuant
to Section 7) of common  stock,  par value $.01 per share,  of the Company  (the
"Common  Stock").  Such  shares  of Common  Stock  shall be set aside out of the
authorized  but  unissued  shares of Common  Stock  not  reserved  for any other
purpose or out of previously  issued shares  acquired by the Company and held in
its treasury.  Any shares of Common Stock which, by reason of the termination or
expiration  of an Option or  otherwise,  are no longer  subject to an Option may
again be subjected to an Option under the Plan.

     5. Options. Options to purchase Common Stock ("Options") shall be evidenced
by option  agreements  which  shall be subject to the terms and  conditions  set
forth in the Plan and such other terms and conditions not inconsistent  herewith
as the Committee may approve.



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          (a)  Types of  Options.  Options  granted  under  the Plan  shall,  as
     determined  by the  Committee  at the  time of  grant,  be  either  Options
     intended to qualify as incentive  stock  options  under  Section 422 of the
     Code  ("Incentive  Stock  Options")  or Options not  intended to so qualify
     ("Nonstatutory  Stock  Options").  Each option agreement shall identify the
     Option as an Incentive Stock Option or as a Nonstatutory Stock Option.

          (b) Price.  The price at which shares of Common Stock may be purchased
     upon the  exercise  of an Option  granted  under the Plan shall be the fair
     market value of such shares on the date of grant of such Option;  provided,
     however,  that an Incentive  Stock  Option  granted to an employee who owns
     stock  possessing  more than 10% of the total combined  voting power of all
     classes  of  stock of the  Company  shall  have a  purchase  price  for the
     underlying  shares  equal to 110% of the fair  market  value of the  Common
     Stock on the date of grant.

          For  purposes of the Plan,  the fair market value of a share of Common
     Stock on a specified  date shall be the  closing  price on such date of the
     Common  Stock on the Nasdaq  SmallCap  Market or, if no such sale of Common
     Stock  occurs on such date,  the fair market  value of the Common  Stock as
     determined by the Committee in good faith.

          (c)  Per-Participant  Limit.  No  participant  may be granted  Options
     during  any  consecutive  12-month  period on more than  100,000  shares of
     Common Stock (subject to adjustment pursuant to Section 7).

          (d) Limitation on Incentive  Stock Options.  The aggregate fair market
     value  (determined  on the date of  grant)  of  Common  Stock  for  which a
     participant   is  granted   Incentive   Stock  Options  that  first  become
     exercisable during any given calendar year shall be limited to $100,000. To
     the extent such  limitation  is  exceeded,  an Option shall be treated as a
     Nonstatutory Stock Option.

          (e)  Nontransferability.  Options  granted under the Plan shall not be
     transferable other than by will or by the laws of descent and distribution,
     and,  during a  participant's  lifetime,  shall be exercisable  only by the
     participant.  Notwithstanding the foregoing, a participant may transfer any
     Nonstatutory  Option  granted under the Plan to the  participant's  spouse,
     children and/or grandchildren,  or to one or more trusts for the benefit of
     such family  members,  if the agreement  evidencing such Option so provides
     and the participant  does not receive any  consideration  for the transfer.
     Any Option so  transferred  shall  continue to be subject to the same terms
     and  conditions  that  applied  to such  Option  immediately  prior  to its
     transfer  (except  that  such  transferred  Option  shall  not  be  further
     transferable by the transferee during the transferee's lifetime).


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          (f) Term and  Exercisability  of  Options.  Options may be granted for
     terms of not more than 10 years and shall be exercisable in accordance with
     such  terms  and  conditions  as are set  forth  in the  option  agreements
     evidencing the grant of such Options.  In no event shall an Incentive Stock
     Option  granted to an employee who owns stock  possessing  more than 10% of
     the total  combined  voting power of all classes of stock of the Company be
     exercisable after the expiration of five years from the date such Incentive
     Stock Option is granted.

          Except as otherwise  provided in Section 5(g), no Option granted under
     the Plan shall be exercisable by a participant  during the first year after
     the date of grant of such Option.

          (g)  Termination  of  Employment.  An  Option  may  not  be  exercised
     following a participant's  termination of employment except as set forth in
     this Section 5(g).

               (i)  Death,  Disability,   or  Retirement.   If  a  participant's
          employment terminates by reason of death, permanent disability (within
          the meaning of Section  22(e)(3)  of the Code),  or  retirement  at or
          after age 65,  the  participant  (or the  participant's  estate in the
          event of the  participant's  death) may, within 90 days following such
          termination,  exercise  the Option with  respect to all or any part of
          the shares of Common Stock subject  thereto  regardless of whether the
          Option  was  otherwise  exercisable  at the  time  of  termination  of
          employment.

               (ii) Other Reasons. If a participant's  employment terminates for
          any reason other than death, permanent disability, or retirement at or
          after age 65,  the  participant  may,  within 30 days  following  such
          termination,  exercise  the Option with  respect to all or any part of
          the shares of Common  Stock  subject  thereto,  but only to the extent
          that  such  Option  was  exercisable  at the  time of  termination  of
          employment.

     In no event may an Option be exercised  after the expiration of the term of
     such Option.

          (h) Payment.  Full payment of the purchase  price for shares of Common
     Stock  purchased  upon the  exercise,  in whole  or in part,  of an  Option
     granted  under  the Plan  shall be made at the time of such  exercise.  The
     purchase  price may be paid in cash or in shares of Common  Stock valued at
     their fair market value on the date of purchase.  Alternatively,  an Option
     may be  exercised  in whole or in part by  delivering  a properly  executed
     exercise  notice  together  with  irrevocable  instructions  to a broker to
     deliver promptly to the Company the amount of sale or loan proceeds

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     necessary to pay the purchase price and applicable  withholding  taxes, and
     such other documents as the Committee may determine.

     6. Withholding.  No later than the date as of which an amount first becomes
includible in the gross income of a participant  for Federal income tax purposes
with  respect to any Option  under the Plan,  the  participant  shall pay to the
Company, or make arrangement satisfactory to the Committee regarding the payment
of, any  Federal,  state or local  taxes  required  by law to be  withheld  with
respect  to  such  amount.   Unless  otherwise   determined  by  the  Committee,
withholding obligations may be settled with Common Stock, including Common Stock
that is part of the Option that gives rise to the withholding  requirement.  The
obligations  of the Company under the Plan shall be  conditional on such payment
or arrangements  and the Company shall, to the extent permitted by law, have the
right  to  deduct  any  such  taxes  from  any  payment  of any  kind due to the
participant.  Any election made by a participant subject to Section 16(b) of the
Exchange  Act to have shares of Common  Stock  withheld in  satisfaction  of the
withholding  requirement  with  respect to such  participant's  Option  shall be
subject to the approval of the  Committee  and shall be in  accordance  with the
requirements of Rule 16b-3 under such Act.

     7.  Changes  in  Capital  Structure,  etc.  In the event that the shares of
Common Stock, as presently constituted, shall be changed into or exchanged for a
different  number or kind of shares of stock or other  securities of the Company
or  of  another  corporation  (whether  by  reason  of  merger,   consolidation,
recapitalization,   reclassification,   split-up,   combination  of  shares,  or
otherwise)  or if the  number of such  shares  shall be  increased  through  the
payment of a stock dividend or a dividend on shares of Common Stock of rights or
warrants to purchase  securities of the Company shall be made,  then there shall
be  substituted  for  or  added  to  each  share  of  Common  Stock  theretofore
appropriated or thereafter  subject or which may become subject to an Option the
number  and  kind of  shares  of  stock  or other  securities  into  which  each
outstanding  share of Common  Stock shall be so changed,  or for which each such
share shall be exchanged,  or to which each such share shall be entitled, as the
case may be, and references  herein to shares of Common Stock shall be deemed to
be references to any such stock or other securities as appropriate.  Outstanding
Options shall also be  appropriately  amended as to price and other terms as may
be necessary to reflect the  foregoing  events.  In the event there shall be any
other change in the number or kind of the outstanding  shares of Common Stock or
any stock or other  securities into which such shares shall have been changed or
for which it shall have be exchanged,  then if the Committee  shall, in its sole
discretion,  determine that such change equitably  requires an adjustment in any
Option  theretofore  granted  or which may be  granted  under  this  Plan,  such
adjustments  shall be made in  accordance  with such  determination.  Fractional
shares  resulting from any adjustment in Options  pursuant to this Section 7 may
be settled in cash or otherwise as the Committee shall determine.  Notice of any
adjustment shall be given by the Company to each holder of an Option which shall
have been  adjusted  and such  adjustment  (whether or not such notice is given)
shall be effective and binding for all purposes of this Plan.


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     8. Effective Date and Termination of Plan. The Plan shall become  effective
on the date of its  adoption by the Board,  subject to the  ratification  of the
Plan by the  affirmative  vote or consent of holders of a majority of the issued
and outstanding  shares of Common Stock.  The Plan shall terminate 10 years from
the date of its adoption or such earlier  date as the Board may  determine.  Any
Option outstanding under the Plan at the time of its termination shall remain in
effect in accordance with its terms and conditions and those of the Plan.

     9.  Amendment.  The Board may  amend the Plan in any  respect  from time to
time;  provided,  however,  that no  amendment  shall  become  effective  unless
approved by affirmative  vote of the Company's  shareholders if such approval is
necessary  for the  continued  validity  of the Plan or if the failure to obtain
such approval would adversely  affect the compliance of the Plan with Rule 16b-3
under the  Exchange  Act or any other  rule or  regulation.  No  amendment  may,
without the consent of a participant, impair such participant's rights under any
Option previously granted under the Plan.

     10. Legal and Regulatory  Requirements.  No Option shall be exercisable and
no shares  will be  delivered  under  the Plan  except  in  compliance  with all
applicable Federal and state laws and regulations including, without limitation,
compliance with  withholding tax requirements and with the rules of all domestic
stock exchanges on which the Common Stock may be listed.  Any share  certificate
issued to evidence shares for which an Option is exercised may bear such legends
and statements as the Committee  shall deem advisable to assure  compliance with
Federal and state laws and  regulations.  No Option shall be exercisable  and no
shares shall be delivered under the Plan, until the Company has obtained consent
or approval from regulatory bodies,  Federal or state,  having jurisdiction over
such matters as the Committee may deem advisable.

     11. General Provisions.

          (a) Nothing  contained in the Plan, or in any Option granted  pursuant
     to the Plan,  shall confer upon any employee any right to the  continuation
     of the employee's employment or services.

          (b) The Plan and all Options made and actions taken  thereunder  shall
     be governed by and  construed in  accordance  with the laws of the State of
     New York.








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