On a year-to-date basis, average daily trading volume of equity and index options increased 37.0% to 2.4 million contracts traded as compared to 1.7 million contracts traded in the prior year. Total equity and index volume through April 2006 increased 35.3% to 193.0 million contracts from 142.7 million contracts in the same period last year.
During the quarter, we continued to witness trading activity related to dividend trades among options market makers on certain other exchanges. Dividend trades have minimal profitability impact, if any, and only serve to temporarily inflate and distort trading volume and market share when transacted. These 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 April would increase to 33.1% from 32.0%, an increase of 1.1 market share points. On a year-to-date basis our market share would increase to 34.2% from 32.6%, an increase of 1.6 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) | Apr-06 | Apr-05 | % Change |
Apr-06 | Apr-05 |
% Change |
| ISE Average Daily Volume | 2,379.5 | 1,760.6 | 35.2% | 2,383.0 | 1,739.8 | 37.0% |
| ISE Total Volume | 45,210.7 | 36,973.3 | 22.3% | 193,025.8 | 142,660.6 | 35.3% |
| Industry Average Daily Volume | 7,991.2 | 5,914.0 | 35.1% | 7,866.0 | 5,754.7 | 36.7% |
| Market Share | 29.8% | 29.8% | 0.0 pts | 30.3% | 30.2% | 0.1 pts |
| ISE Market Share: Customer | 30.7% | 29.3% | 1.4 pts | 31.8% | 30.3% | 1.5 pts |
| ISE Market Share: Firm | 26.2% | 21.4% | 4.8 pts | 25.3% | 21.3% | 4.0 pts |
| ISE Market Share: Market Maker | 30.0% | 32.5% | (2.5) pts | 30.5% | 32.5% | (2.0) pts |
Equity Options Volume Statistics
| Current Month | Year-to-Date | |||||
| (000s) | Apr-06 | Apr-05 | % Change |
Apr-06 | Apr-05 |
% Change |
| ISE Average Daily Volume | 2,354.2 | 1,746.7 | 34.8% | 2,355.9 | 1,732.2 | 36.0% |
| ISE Total Volume | 44,730.7 | 36,680.5 | 21.9% | 190,826.0 | 142,041.3 | 34.3% |
| Industry Average Daily Volume | 7,351.7 | 5,342.7 | 37.6% | 7,236.9 | 5,253.8 | 37.7% |
| Market Share | 32.0% | 32.7% | (0.7) pts | 32.6% | 33.0% | (0.4) pts |
| ISE Market Share: Customer | 32.7% | 31.7% | 1.0 pts | 33.9% | 32.7% | 1.2 pts |
| ISE Market Share: Firm | 28.8% | 24.2% | 4.6 pts | 27.9% | 23.9% | 4.0 pts |
| ISE Market Share: Market Maker | 32.4% | 35.8% | (3.4) pts | 32.7% | 35.6% | (2.9) pts |
Index Options Volume Statistics
| Current Month | Year-to-Date | |||||
| (000s) | Apr-06 | Apr-05 | % Change |
Apr-06 | Apr-05 |
% Change |
| ISE Average Daily Volume | 25.3 | 13.9 | 81.2% | 27.2 | 7.6 | 259.5% |
| ISE Total Volume | 480.8 | 292.8 | 63.9% | 2,199.8 | 619.4 | 255.2% |
| Industry Average Daily Volume | 639.5 | 571.2 | 12.0% | 629.1 | 500.9 | 25.6% |
| Market Share | 4.0% | 2.4% | 1.6 pts | 4.3% | 1.5% | 2.8 pts |
Monthly Highlights
- ISE was the largest U.S. equity options exchange in April.
- On April 4, 2006, ISE announced that it had acquired the intellectual property and other related assets of Longitude, Inc, inventor of a proprietary and patented technology that uses parimutuel principles to run derivatives auctions that aggregate liquidity and produce fair and efficient market-driven prices. The new entity, to be named Longitude LLC, will become an operating unit of ISE, which will retain majority-ownership in partnership with Goldman Sachs.
- On April 19, 2006, ISE announced that it was entering the equities market through the launch of the ISE Stock Exchange, LLC in partnership with key strategic firms. ISE retains majority ownership and the strategic partners have joint ownership interests in the business. The strategic partners are leading broker-dealers and members of the exchange including Bear Stearns, Citadel Derivatives Group, Deutsche Bank, Interactive Brokers Group LLC, JPMorgan, Knight Capital Group, Inc. and Sun Trading LLC. ISE Stock Exchange will introduce its first product, MidPoint Match (MPM™), early in the third quarter, subject to regulatory authorization. MPM is a continuous, instantaneous, fully automated, and anonymous matching platform for trading stock.
- ISE traded more volume in 621 of 883 issues in its listings than any other options exchange.
ISE Background
The International Securities Exchange (ISE) is an innovative securities market, founded on the principle that technology and competition create better, more efficient markets for investors. ISE is the largest equity options exchange and is among the leading options exchanges in the world. ISE developed a unique market structure for advanced screen-based trading systems and in May 2000 launched the first fully electronic US options exchange. The ISE Stock Exchange LLC will launch in the third quarter of 2006 with strategic partners, offering an innovative MidPoint Match platform, followed by a fully integrated displayed Best Bid Offer (BBO) market in the fourth quarter. ISE is also a majority owner of Longitude LLC, an innovative platform for events markets trading, and offers enhanced market data products for sophisticated investors.
ISE continually enhances its trading systems and develops new products, including index options and market data, to provide investors with the best marketplace and investment tools to trade smarter. For more information about ISE, its options products and its technology, visit www.iseoptions.com and for more information about the ISE Stock Exchange LLC, visit www.isestock.com.
Certain matters discussed in this press release are “forward looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements, to be materially different from those contemplated by the forward looking statements. We undertake no ongoing obligation, other than that imposed by law, to update these statements. Factors that could affect our results, levels of activity, performance or achievements and cause them to materially differ from those contained in the forward looking statements can be found in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, current reports on Form 8-K and quarterly reports on Form 10-Q.
