Executed by pressing down and all three punch buttons while standing over a knife, Cody will stoop down, pick the knife up and play with it ("Great!"). This is a reference to Cody's origins in Final Fight, as he was also capable of picking up weapons in that game, the knife being his best and favored one.
Picking up the knife affects two factors: his usual punch attacks become knife attacks with extra reach, more damage, and chip damage on block, though this prevents him using certain Unique Attacks. Also affected is his Bad Stone attack, which becomes a Knife Throw attack that travels in a faster and more linear trajectory, but inflicts less damage. Being hit, performing the Knife Throw or using the Focus Attack (the latter case in the Street Fighter IV games) causes Cody to lose the knife until he picks it up again.A knife will appear in any fight involving Cody, and he is the only character capable of picking it up. In this way, it's similar to Vega's claw and mask - however, unlike these, Cody does not begin the fight with the knife in his possession, and it cannot be picked up by simply walking over it. In Super Street Fighter IV, should two Cody players both go for the knife, the one who loses out has a shocked expression on his face.