On a year-to-date basis, average daily trading volume of equity and index options increased 43.2% to 2.4 million contracts traded as compared to 1.7 million contracts traded in the prior year. Total equity and index volume through June 2006 increased 43.2% to 299.5 million contracts from 209.1 million contracts in the same period last year.
We continued to witness trading activity related to dividend trades among options market makers on certain other exchanges. These trades have minimal profitability impact, if any, and only serve to temporarily inflate and distort trading volume and market share when transacted. Dividend trades are typically effected in order to profit from the oversight or misunderstanding of certain retail investors who neglect to exercise their call options prior to a stock going ex-dividend. ISE does not provide a marketplace for dividend trades.
If the volume from the largest dividend trades were excluded from the data, our market share of equity options for the month of June would increase to 31.9% from 31.6%, an increase of 0.3 market share points. On a year-to-date basis, our market share would increase to 33.4% from 32.3%, an increase of 1.1 market share points, if the volume from the largest dividend trades were excluded. The exclusion of dividend trades from total industry volume data presents a more relevant measure of the relative trends in our business.
| Equity and Index Options Volume Statistics | |||||||
| Current Month | Year-to-Date | ||||||
| (000s) | Jun-06 | Jun-05 | % Change | Jun-06 | Jun-05 | % Change | |
| ISE Average Daily Volume | 2,208.5 | 1,527.2 | 44.6% | 2,396.2 | 1,672.9 | 43.2% | |
| ISE Total Volume | 48,587.8 | 33,598.2 | 44.6% | 299,520.3 | 209,109.4 | 43.2% | |
| Industry Average Daily Volume | 7,760.9 | 5,189.2 | 49.6% | 8,060.7 | 5,566.4 | 44.8% | |
| Market Share | 28.5% | 29.4% | (0.9) pts | 29.7% | 30.1% | (0.3) pts | |
| Market Share: Customer | 28.3% | 29.9% | (1.6) pts | 30.6% | 30.3% | 0.4 pts | |
| Market Share: Firm | 25.3% | 20.7% | 4.6 pts | 25.7% | 21.0% | 4.6 pts | |
| Market Share: Market Maker | 29.7% | 31.5% | (1.8) pts | 30.2% | 32.3% | (2.1) pts | |
| Equity Options Volume Statistics | |||||||
| Current Month | Year-to-Date | ||||||
| (000s) | Jun-06 | Jun-05 | % Change | Jun-06 | Jun-05 | % Change | |
| ISE Average Daily Volume | 2,170.1 | 1,504.6 | 44.2% | 2,364.2 | 1,660.8 | 42.3% | |
| ISE Total Volume | 47,742.0 | 33,101.8 | 44.2% | 295,526.5 | 207,606.2 | 42.3% | |
| Industry Average Daily Volume | 6,876.0 | 4,698.9 | 46.3% | 7,331.9 | 5,069.5 | 44.6% | |
| Market Share | 31.6% | 32.0% | (0.5) pts | 32.3% | 32.8% | (0.5) pts | |
| Market Share: Customer | 31.1% | 32.2% | (1.0) pts | 32.9% | 32.6% | 0.4 pts | |
| Market Share: Firm | 28.7% | 23.6% | 5.1 pts | 28.6% | 23.7% | 4.9 pts | |
| Market Share: Market Maker | 32.9% | 34.2% | (1.3) pts | 32.7% | 35.3% | (2.6) pts | |
| Index Options Volume Statistics | |||||||
| Current Month | Year-to-Date | ||||||
| (000s) | Jun-06 | Jun-05 | % Change | Jun-06 | Jun-05 | % Change | |
| ISE Average Daily Volume | 38.4 | 22.6 | 70.4% | 32.0 | 12.0 | 165.7% | |
| ISE Total Volume | 845.8 | 496.4 | 70.4% | 3,993.8 | 1,503.2 | 165.7% | |
| Industry Average Daily Volume | 884.9 | 490.3 | 80.5% | 728.8 | 496.9 | 46.7% | |
| Market Share | 4.3% | 4.6% | (0.3) pts | 4.4% | 2.4% | 2.0 pts | |
Monthly Highlights
- ISE was the largest U.S. equity options exchange in June.
- On June 19, 2006, the United States Court of Appeals for the Second Circuit unanimously affirmed the ruling of the United States District Court for the Southern District of New York which dismissed the complaints of Dow Jones & Company, Inc. and Standard & Poor's, a division of the McGraw-Hill Companies, Inc., against ISE and The Options Clearing Corporation ("OCC") pertaining to ISE's decision to trade SPDRs(R) DIAMONDS(R) without a license. The Court of Appeals affirmed ISE's ability to trade options on exchange traded funds without a license. It ruled that ISE's creating, listing, trading, and clearing of options on the shares of exchange traded funds that track the performance of stock market indexes does not constitute misappropriation of the stock market index owners' intellectual property or unfair competition, and that ISE's use of the SPDR(R) and DIAMONDS(R) trademarks in listing those options does not constitute trademark infringement or dilution. The Court of Appeals found that the allegations of Dow Jones and S&P were "legally insufficient."
- ISE traded more volume in 648 of 915 issues in its listings than any other options exchange.
