The International Securities Exchange (NYSE: ISE) today announced that it has completed the initial rollout of its Second Market for options. Approximately 700 options classes now trade in the Second Market with an aggregate average daily volume for the month of January of over 79,000 contracts.
ISE introduced its Second Market to provide its members with a distinct platform to leverage ISE's leading community of market makers and proven, competitive market structure to create additional liquidity in options that have typically experienced lower trading volumes. Since Second Market's launch in October 2006, trading volumes for Second Market options classes have grown approximately 35% across all exchanges.
ISE also recently welcomed three additional Second Market Competitive Market Makers (CMMs(R)). Lehman Brothers Inc. is an existing CMM in ISE's primary options market and will now also quote in the Second Market. DC Trading Partners LLC and Monadnock Capital Management, LP are new ISE members and have also become Second Market CMMs. These new Second Market CMMs join ten existing market makers, bringing the total number of Second Market CMMs to thirteen.
CMMs are market makers that add depth and liquidity to the market. The Second Market offers separate quoting rules and access standards from ISE's primary market to provide greater flexibility for competitive market making.
Gary Katz, ISE's Chief Operating Officer, said, "When we launched the Second Market, we anticipated that it would appeal to market makers, such as DC Trading and Monadnock, who specialize in this niche of the options market, and we are glad to welcome them as new ISE members. We are also pleased that Lehman Brothers, a member of our existing CMM community, has decided to participate in the Second Market. We look forward to the additional liquidity and trading expertise that these Second Market CMMs will provide."
ISE Background
International Securities Exchange Holdings, Inc. (NYSE: ISE), through its subsidiaries, operates a family of innovative securities markets. ISE is founded on the principle that technology and competition create better, more efficient markets for investors and consists of an options exchange, a stock exchange and an alternative markets platform. ISE continually enhances its trading systems and develops new products to provide investors with the best marketplace and investment tools to trade smarter.
ISE developed a unique market structure for advanced screen-based trading systems and in May 2000 launched the first fully-electronic US options exchange. Currently, ISE operates the largest U.S. equity options exchange and is among the leading options exchanges in the world. ISE offers index options, including a portfolio of proprietary index products, and enhanced market data products for sophisticated investors. ISE FX Options(TM) are slated to launch in 2007.
ISE Stock Exchange, launched in September 2006 with strategic partners, includes an innovative MidPoint Match(TM) platform which offers investors continuous price improvement. MidPoint Match was integrated with a fully-displayed Best Bid Offer market in the fourth quarter of 2006.
ISE's alternative markets business currently consists of an events market trading platform known as Longitude. Longitude's patented and proprietary technology provides a unique parimutuel structure for derivatives auctions which results in greater trading and pricing flexibility for market participants.
For more information about ISE and its options exchange, visit www.iseoptions.com and for more information about ISE Stock Exchange, visit www.isestock.com. Additionally, to learn more about ISE alternative markets technology, visit www.longitude.com.
