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On a year-to-date basis, average daily trading volume of equity and index options increased 41.7% to 2.4 million contracts traded as compared to 1.7 million contracts traded in the prior year. Total equity and index volume through July 2006 increased 41.7% to 345.4 million contracts from 243.8 million contracts in the same period last year.
Our average daily trading volume continues to be negatively impacted by trading activity related to dividend trades among certain options market makers. These trades temporarily inflate and distort trading volume and market share when transacted. If the volume from the largest dividend trades were excluded from the data, our market share of equity options for the month of July would increase to 32.6% from 32.4%, an increase of 0.2 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 Year-to-
Month Date
(000s) Jul-06 Jul-05 % Change Jul-06 Jul-05 % Change
--------- -------- --------- --------- ---------- ---------- ---------
ISE
Average
Daily
Volume 2,295.0 1,732.3 32.5% 2,382.2 1,681.1 41.7%
ISE Total
Volume 45,900.0 34,645.3 32.5% 345,420.3 243,754.7 41.7%
Industry
Average
Daily
Volume 7,730.1 5,643.2 37.0% 8,015.1 5,577.0 43.7%
Market
Share 29.7% 30.7% (1.0) pts 29.7% 30.1% (0.4) pts
--------- -------- --------- --------- ---------- ---------- ---------
Market
Share:
Customer 28.9% 30.2% (1.3) pts 30.4% 30.2% 0.2 pts
Market
Share:
Firm 26.7% 23.5% 3.2 pts 25.8% 21.4% 4.4 pts
Market
Share:
Market
Maker 31.3% 33.1% (1.8) pts 30.3% 32.4% (2.1) pts
--------- -------- --------- --------- ---------- ---------- ---------
Equity Options Volume Statistics
Current Year-to-
Month Date
(000s) Jul-06 Jul-05 % Change Jul-06 Jul-05 % Change
--------- -------- --------- --------- ---------- ---------- ---------
ISE
Average
Daily
Volume 2,263.2 1,708.9 32.4% 2,350.3 1,667.5 40.9%
ISE Total
Volume 45,263.2 34,178.3 32.4% 340,789.8 241,784.5 40.9%
Industry
Average
Daily
Volume 6,979.2 5,155.2 35.4% 7,283.3 5,081.4 43.3%
Market
Share 32.4% 33.2% (0.8) pts 32.3% 32.8% (0.5) pts
--------- -------- --------- --------- ---------- ---------- ---------
Market
Share:
Customer 31.4% 32.2% (0.8) pts 32.7% 32.5% 0.2 pts
Market
Share:
Firm 29.7% 26.4% 3.3 pts 28.8% 24.1% 4.7 pts
Market
Share:
Market
Maker 34.3% 35.8% (1.5) pts 32.9% 35.4% (2.5) pts
--------- -------- --------- --------- ---------- ---------- ---------
Index Options Volume Statistics
Current Year-to-
Month Date
(000s) Jul-06 Jul-05 % Change Jul-06 Jul-05 % Change
----------- --------- --------- --------- -------- --------- ---------
ISE Average
Daily
Volume 31.8 23.3 36.4% 31.9 13.6 135.0%
ISE Total
Volume 636.8 467.0 36.4% 4,630.5 1,970.2 135.0%
Industry
Average
Daily
Volume 750.9 488.0 53.9% 731.8 495.6 47.7%
Market
Share 4.2% 4.8% (0.6) pts 4.4% 2.7% 1.7 pts
----------- --------- --------- --------- -------- --------- ---------
Monthly Highlights
-- ISE was the largest U.S. equity options exchange in July.
-- On July 5, 2006, ISE announced the introduction of a Second
Market that will list approximately 850 additional equity
options beginning in the third quarter of 2006, pending SEC
approval. The listing of these equity options classes will
double the total number of options classes traded at ISE.
-- On July 10, 2006, ISE received SEC approval to launch its new
Quarterly options product. Quarterly options expire at the end
of a calendar quarter. For each options class, ISE offers five
expiration dates: four front calendar quarters and the fourth
quarter from the following year. The ISE now offers Quarterly
Options expiring on the last trading days in September 2006,
December 2006, March 2007, June 2007, and December 2007.
-- On July 19, 2006, ISE announced that it rolled out PrecISE
Trade(TM), its new front-end trading application for
broker-dealers to access ISE's markets. PrecISE offers users a
lighter application with reduced bandwidth requirements and a
faster, flexible trading interface that provides greater
capacity to support future enhancements.
-- On July 24, 2006, ISE announced that Nomura Securities
International, Inc., Van der Moolen, and a subsidiary of
E*TRADE FINANCIAL Corporation joined previously announced
strategic partners Bear Stearns, Citadel Derivatives Group,
Deutsche Bank, Interactive Brokers Group LLC, JPMorgan, Knight
Capital Group, Inc., and Sun Trading LLC as joint owners of
the new ISE Stock Exchange LLC.
-- ISE traded more volume than any other options exchange in 660
of 924 issues in its listings.
