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CORRESP
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July
14,  2006

Mr.  Joshua
S.  Forgione
Assistant Chief Accountant
Division of
Corporation Finance
Mail Stop 4561
Securities and Exchange
Commission
100 F Street, N.E.
Washington, D.C. 20549

Dear Mr.  Forgione:

On behalf of
eSpeed Inc. ( the ‘‘Company’’), we are
writing in response to the comment letter dated June  26,
2006 from you in connection with the Company’s Form 10-K for the
year ended December  31,  2005 as filed on March
15,  2006.

The Company has addressed all of your
comments resulting in enhanced or additional disclosures in the context
of future filings.

For your convenience, the Company has
restated your comments in full, and all of the Company’s
responses are consistent with the numbering of the comments and
headings used in your letter.

Form 10-K for the year
ended December  31,  2005

Note 2.
Summary of Significant Accounting Policies, page
62

Revenue Recognition

Transaction
Revenues, page 62

1.
In future filings
please expand your revenue recognition policy disclosure to clarify how
revenues are earned in each of the various types of securities and
related transactions.

Response #1

The Company
intends to prospectively modify the language in the Transaction
Revenues section of Note 2, Summary of Significant Accounting Policies,
in its Form 10-Q for the period ended June  30,  2006, by
adding the following:

Transaction
Revenues:    The Company derives transaction revenues from
related and unrelated parties. The Company’s related party
transaction revenues, which consist of fully electronic, voice-assisted
brokerage and screen-assisted open outcry transaction revenues, are
generated when Cantor clears and/or transacts trades on or with the
assistance of the Company’s trading platform. Related party
transaction revenues are determined based on revenue sharing
arrangements and commission rates negotiated with Cantor (see Note 10,
Related Party Transactions, for more information regarding such
negotiated revenue sharing arrangements and commission rates for these
transactions). Unrelated party transaction revenues, which consist of
fully electronic transaction revenues, are generated from transactions
that are neither cleared nor transacted by Cantor. In the case of fixed
fee contracts, transaction revenues are recognized ratably over the
term of the contract. All other transaction revenues are recognized on
a trade date basis.

Note 9. Commitments and
Contingencies, page 73

2.
We note from your
disclosure that you establish legal reserves in accordance with SFAS 5.
Your description of each significant litigation matter does not provide
a sufficient explanation as to the probable outcome and or estimated
loss. Please revise your disclosure to clarify the nature of the
material loss contingencies recorded in your financial statements in
accordance with paragraph 9 of SFAS 5 and SAB Topic 5Y. In addition,
for loss contingencies where no accrual is made please clarify whether
there are any material contingent liabilities that are probable but not
reasonably estimable or reasonably possible. If so, please revise to
also provide the disclosures required by paragraph 10 of SFAS 5 and SAB
Topic 5Y. Please show us how you will revise your disclosure in
response to this comment.

Response #2

The Company
does not believe it has any material legal liabilities that are
probable but not reasonably estimable. The Company intends to
prospectively change Legal Matters in Note 7, Commitments and
Contingencies, in its Form 10-Q for the period ended June
30,  2006, as follows:

In the ordinary course of
business, various legal actions are brought and are pending against the
Company. In some of these actions, substantial amounts are claimed. The
Company is also involved, from time to time, in other reviews,
investigations and proceedings by governmental and self-regulatory
agencies (both formal and informal) regarding the Company’s
business. Any of such actions may result in judgments, settlements,
fines, penalties, injunctions or other relief.

Legal
reserves are established in accordance with SFAS No. 5,
Accounting for Contingencies, when a material legal liability is
both probable and reasonably estimable. Once established, reserves are
adjusted when there is more information available or when an event
occurs requiring a change. As of June  30,  2006, there
were no material legal contingencies for which the Company can estimate
a possible loss or a range of losses.

By Summons and
Complaint, dated October  30,  2002, eSpeed commenced an
action in New York State Supreme Court against Municipal Partners LLC
(‘‘MPLLC’’) seeking, among other things,
damages as a result of MPLLC’s breach of a License and Services
Agreement, under which MPLLC failed to pay eSpeed for ancillary
information technology services and products provided to eSpeed, and
failed to pay eSpeed a percentage of certain revenues derived by MPLLC
from electronic trading. On November  19,  2002, MPLLC
answered the Complaint. On April  1,  2004, MPLLC filed an
amended Answer and Counterclaim. On May  25,  2004, eSpeed
filed its reply to MPLLC’s Counterclaim. The parties have
suspended active litigation pending settlement discussions. The
proposed settlement arrangement does not involve any material payments
or other obligations by the Company.

In June
2003, the Company filed a patent infringement suit against BrokerTec
USA, LLC, BrokerTec Global, LLC, its parent, ICAP, PLC, Garban, LLC,
its technology provider, OM Technology, and its parent company, OM AB
(collectively, ‘‘BrokerTec’’), in the
United States District Court for the District of Delaware. The suit
centers on BrokerTec's and Garban's alleged infringement of
U.S. Patent No. 6,560,580 issued on May  6,  2003, which
expires in 2016, with respect to which eSpeed is the exclusive
licensee. The patent covers a system and methods for auction-based
trading of specialized items such as fixed income instruments. In a
pre-trial ruling on February  7,  2005, the U.S. District
Court in Delaware ruled that the BrokerTec ETN did not infringe the
Company’s 580 Patent. On February  22,  2005, the
jury found that the Garban GTN did infringe the Company’s 580
Patent but that there was a deficiency in the application which led to
the 580 Patent, finding that the Company ‘‘failed to
provide adequate written description of each and every element
recited’’ in certain claims of the 580 Patent. Both
parties requested attorneys' fees from the other party, which may
be awarded by the court in exceptional cases. By Memorandum Order,
dated December  5,  2005, the Court denied eSpeed's
Motion for Judgment as a Matter of Law, or, in the Alternative, for a
New Trial, and also denied BrokerTec's Motion for

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Judgment as a Matter of Law on Invalidity and
Non-Infringement. In Post-Trial Findings of Fact and Conclusions
of Law dated February  22,  2006, the Court found that the
580 Patent was unenforceable due to inequitable conduct, but denied the
defendants’ request for an award of attorneys’ fees.
Final judgment was entered on April  3,  2006. By notice
dated April  27,  2006, the Company appealed to the U.S.
Court of Appeals for the Federal Circuit. BrokerTec did not appeal the
Court’s denial of attorneys’ fees.

In
August  2004, Trading Technologies International, Inc.
(‘‘TT’’) commenced an action in the United
States District Court, Northern District of Illinois, Eastern Division,
against the Company. In its complaint, TT alleged that the Company
infringed and continues to infringe U.S. Patent No. 6,766,304, which
issued on July  20,  2004 and U.S. Patent 6,772,132, which
issued on August  3,  2004. TT also filed a motion for
preliminary injunction seeking to preclude the Company from making,
selling, and offering to sell a product that allegedly infringes such
patents. A hearing on TT's motion for preliminary injunction was
held on December  2,  2004. On February  9,
2005, the Court denied TT's motion for a preliminary injunction.
The Court determined that the Company had not raised a substantial
question concerning the validity or infringement of the patents but
that TT had not proved that it would suffer irreparable harm absent an
injunction. A trial date for this case has not yet been set. On
March  16,  2005, TT filed an amended Complaint against the
Company and added infringement allegations against Ecco and ITSEcco. On
April  6,  2005, eSpeed and Ecco answered the Complaint in
which the Company denied the infringement allegations. At the same
time, eSpeed and Ecco filed a Counterclaim seeking a declaration that
the patents in suit are invalid, the Company does not make, use or sell
any product that infringes any claims of the patents in suit, and the
patents in suit are unenforceable because of inequitable conduct before
the U.S. Patent and Trademark Office during the prosecution of the
patents. On April  18,  2005, ITSEcco filed a motion to
dismiss TT's complaint against it for lack of personal
jurisdiction. TT agreed to dismiss ITSEcco from the lawsuit but added
eSpeed International and EccoWare LLC as defendants in a Second Amended
Complaint. On January  5,  2006, the Company answered
TT's Second Amended Complaint in which the Company denied the
infringement allegations. At the same time, the Company filed an
Amended Counterclaim seeking a declaration that the patents in suit are
invalid, the Company does not make, use or sell any product that
infringes any claims of the patents in suit, the patents in suit are
unenforceable because of inequitable conduct before the U.S. Patent and
Trademark Office during the prosecution of the patents, and the patents
are unenforceable due to TT's patent misuse. Discovery is
ongoing, and the Court consolidated for certain discovery and Markman
hearing purposes the Company’s case with other patent
infringement cases brought by TT against other defendants. A Markman
hearing currently is scheduled for June  1,  2006. No trial
date is currently set. If TT ultimately prevails in this litigation,
the Company may be required to pay TT damages and/or certain costs and
expenses, and the Company may be forced to modify or withdraw certain
products from the market. Both parties requested attorneys' fees
from the other party, which may be awarded by the Court in exceptional
cases.

In February  2005, Mircuz Partners, LLC
filed a purported class action complaint in the United States District
Court for the Southern District of New York against eSpeed, Cantor
Fitzgerald, L.P. and certain affiliated entities, as well as Howard
Lutnick and Lee Amaitis, on behalf of all persons who purchased the
securities of eSpeed from August  12,  2003 to July
1,  2004, alleging that eSpeed made ‘‘material
false positive statements during the class period’’ and
violated certain provisions to the U.S. Securities Exchange Act of
1934, as amended, and certain rules and regulations
thereunder. Two similar class action complaints were
subsequently filed. In May  2006, the Court entered a
Judgment in defendants’ favor. The time for the plaintiffs to
appeal the Judgment has expired and the case has been dismissed with
prejudice.

In addition to the matters discussed above,
the Company is involved in other legal proceedings that have arisen in
the ordinary course of business. None of the currently

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pending matters is expected to have a material
adverse impact on the Company’s financial position but may be
material to the Company’s results of operations or cash flows in
a given period.

Note 12. Reverse Repurchase
Agreements, page 75

3.
Please revise your
disclosure to summarize the relevant terms of your repurchase agreement
with Cantor including, but not limited to, the types of assets held as
collateral, the interest rates used during the periods and how these
rates are determined or reset as well as the settlement provisions. In
addition, please tell us how your loans to Cantor, which are accounted
for as collateralized financing transactions, meet the definition of
cash equivalents. Refer to paragraph 7 – 10 of SFAS 95. Please
show us how you will revise your disclosure in response to this
comment.

Response #3

Paragraph 8 of statement 95
defines cash equivalents as ‘‘short-term, highly liquid
investments that are both a) readily convertible to known amounts of
cash and b) so near their maturity that they present insignificant risk
of changes in value because of changes in interest
rates.’’ The Company believes that the reverse repurchase
agreements it has entered into with Cantor meet the above requirements.
The reverse repurchase agreements, which are fully collateralized, are
transacted on an overnight basis through third-party custodians.
Accordingly, the reverse repurchase agreements are readily convertible
into the amount of cash stated in the agreements and, because the
agreements are on an overnight basis, there is an insignificant risk of
changes in value due to changes in interest rates.

The
Company intends to prospectively change its reverse repurchase
agreement disclosure in Note 9, Reverse Repurchase Agreements, in its
Form 10-Q for the period ended June  30,  2006, as
follows:

Cash and cash equivalents at June
30,  2006 and December  31,  2005 included
$140.7  million and $141.4  million, respectively, of
reverse repurchase agreements with Cantor. The Company enters into
reverse repurchase agreements with Cantor as short-term investments as
part of its overall cash management strategy. The Company’s
reverse repurchase agreements mature on a next day basis. Interest
rates for the reverse repurchase agreements are reset daily and
approximate market rates, which are based on the Fed Funds Rate and the
quality of the underlying collateral.

Reverse repurchase
agreements are accounted for as collateralized financing transactions
and are recorded at fair value, approximated by the contractual amount
for which the securities can be resold, including accrued interest. It
is the Company’s policy to require collateral with a market
value equal to or in excess of the principal amount deposited. All
collateral is held in third-party custodial accounts. The value and
eligibility of the collateral deposited are determined daily by the
third-party custodian, and the Company may require Cantor to deposit
additional collateral or return amounts deposited when appropriate.
Under the terms of these agreements, the securities collateralizing the
reverse repurchase agreements are not permitted to be resold or
repledged. Cash and collateral for each reverse repurchase agreement
are settled daily. Of the $140.7  million held in reverse
repurchase agreements as of June  30,  2006, $44.3
million is fully collateralized by U.S. government securities and
$96.4  million is fully collateralized by eligible equity
securities. The fair value of such collateral at June  30,
2006 and December  31,  2005 totaled $151.2  million
and $150.7  million, respectively.

Additionally,
the Company intends to prospectively change the language in the Cash
and Cash Equivalents section of Note 2, Summary of Significant
Accounting Policies, as follows:

The Company considers
all highly liquid investments with original maturity dates of 90 days
or less at the date of acquisition to be cash equivalents. Cash
equivalents consist of securities purchased under agreements to resell
(reverse repurchase agreements) transacted on an overnight basis for
the purpose of cash management and a money market fund. See Note 9,
Reverse Repurchase Arrangements, for more information regarding the
Company’s reverse repurchase arrangements.

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Note 17. Options and Warrants,
pages 80-81

4.
Please tell us how you
considered the guidelines in Issues 24, 36 and 39 of EITF 00-23 in
evaluating whether any of the stock options granted during 2004 and
2005 represent replacement awards of options cancelled granted during
the respective years.

Response #4

The Company has
considered the guidance outlined in I