On a year-to-date basis, average daily trading volume of equity and index options increased 43.0% to 2.4 million contracts traded as compared to 1.7 million contracts traded in the prior year. Total equity and index volume through May 2006 increased 43.0% to 250.9 million contracts from 175.5 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 May would increase to 32.5% from 31.8%, an increase of 0.7 market share points. On a year-to-date basis, our market share would increase to 33.8% from 32.4%, an increase of 1.4 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) | May-06 | May-05 | % Change |
May-06 | May-05 |
% Change |
| ISE Average Daily Volume | 2,632.1 | 1,564.3 | 68.3% | 2,436.2 | 1,704.0 | 43.0% |
| ISE Total Volume | 57,906.6 | 32,850.5 | 76.3% | 250,932.5 | 175,511.2 | 43.0% |
| Industry Average Daily Volume | 9,077.1 | 5,226.2 | 73.7% | 8,124.7 | 5,647.0 | 43.9% |
| Market Share | 29.0% | 29.9% | (0.9) pts | 30.0% | 30.2% | (0.2) pts |
| ISE Market Share: Customer | 28.9% | 30.4% | (1.5) pts | 31.1% | 30.3% | 0.8 pts |
| ISE Market Share: Firm | 27.2% | 20.3% | 6.9 pts | 25.7% | 21.1% | 4.7 pts |
| ISE Market Share: Market Maker | 29.6% | 32.1% | (2.5) pts | 30.3% | 32.5% | (2.2) pts |
Equity Options Volume Statistics
| Current Month | Year-to-Date | |||||
| (000s) | May-06 | May-05 | % Change |
May-06 | May-05 |
% Change |
| ISE Average Daily Volume | 2,589.0 | 1,545.9 | 67.5% | 2,405.7 | 1,694.2 | 42.0% |
| ISE Total Volume | 56,958.5 | 32,463.1 | 75.5% | 247,784.6 | 174,504.4 | 42.0% |
| Industry Average Daily Volume | 8,138.1 | 4,738.2 | 71.8% | 7,429.4 | 5,148.7 | 44.3% |
| Market Share | 31.8% | 32.6% | (0.8) pts | 32.4% | 32.9% | (0.5) pts |
| ISE Market Share: Customer | 31.4% | 32.7% | (1.3) pts | 33.3% | 32.7% | 0.6 pts |
| ISE Market Share: Firm | 30.6% | 22.7% | 7.9 pts | 28.6% | 23.7% | 4.9 pts |
| ISE Market Share: Market Maker | 32.6% | 35.2% | (2.7) pts | 32.7% | 35.5% | (2.8) pts |
Index Options Volume Statistics
| Current Month | Year-to-Date | |||||
| (000s) | May-06 | May-05 | % Change |
May-06 | May-05 |
% Change |
| ISE Average Daily Volume | 43.1 | 18.4 | 133.6% | 30.6 | 9.8 | 212.7% |
| ISE Total Volume | 948.1 | 387.4 | 144.8% | 3,147.9 | 1,006.8 | 212.7% |
| Industry Average Daily Volume | 939.0 | 488.0 | 92.4% | 695.3 | 498.3 | 39.5% |
| Market Share | 4.6% | 3.8% | 0.8 pts | 4.4% | 2.0% | 2.4 pts |
Monthly Highlights
- ISE was the largest U.S. equity options exchange in May.
- ISE established a new monthly volume record of 57.9 million contracts.
- On May 5, 2006, ISE launched index options on the new FTSE 100 (UKX) through an innovative “Mini” contract structure.
- On May 11, 2006, in accordance with its new dividend policy, ISE declared a quarterly dividend of $0.05 per outstanding share of its Class A Common Stock. The dividend will be paid on June 30, 2006 to holders of record as of the close of business on June 23, 2006.
- On May 11, 2006, ISE announced that Ivers W. Riley was stepping down as Chairman of the ISE but will remain on ISE's Board of Directors. Dr. Frank J. Jones, Ph.D was elected Chairman and Dr. John F. Marshall, Ph.D was elected Vice Chairman.
- On May 16, 2006, ISE traded its 1.5 billionth contract.
- On May 23, 2006, ISE launched index options trading on the FTSE 250 (FTZ), the second product offering using ISE's innovative "Mini" contract structure.
- On May 30, 2006, ISE announced that in response to clients' needs, it will launch a new options product, Quarterlies, an innovative product that expires at the end of the calendar quarter.
- ISE traded more volume in 658 of 892 issues in its listings than any other options exchange.
