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UPDATE 1-Nasdaq OMX slips in options market share fight
February 1, 2010 / 11:13 PM / 8 years ago

UPDATE 1-Nasdaq OMX slips in options market share fight

*CBOE stays No. 1 in total market share for January

*Nasdaq OMX slips to fourth spot from second last month

*ISE total market share for January is 22.9 pct

*ISE says div trades inflate, distort trading volume (Recasts lead with market share of other exchanges)

CHICAGO/NEW YORK, Feb 1 (Reuters) - Nasdaq OMX Group (NDAQ.O) slipped from second to fourth spot in the heated battle for U.S. options market share last month, while NYSE Euronext NYX.N and the International Securities Exchange both gained ground in the crowded options space.

The dominant Chicago Board Options Exchange was No. 1 with 29.6 percent of the fast-growing options market in January, but market share was down from 31.2 percent in December and 32.4 percent in January 2009, according to the Options Clearing Corp.

NYSE Euronext’s two venues, AMEX and NYSE Arca options, had a combined 25.8 percent, while the ISE, a unit of Deutsche Boerse’s (DB1Gn.DE) Eurex arm, stood at 22.9 percent, putting them in the No. 2 and No. 3 spots, respectively, last month.

Nasdaq OMX, which runs the Nasdaq PHLX and NOM option platforms, dropped to a combined 19.8 percent in January, from 23.7 percent in December.

ISE, whose options market share tumbled late last year, said on Monday its market share rebounded in January from the previous month.

ISE accounted for 22.9 percent of overall options trading last month, up sequentially from 20.3 percent in December, when it slipped to fourth place among exchange operators.

ISE had previously long battled the CBOE for the top spot in the hotly contested market. Its U.S. options market share in January last year was 28.4 percent.

Ex-dividend strategies has inflated volume on rival exchanges, ISE said.

ISE said if dividend trades were excluded from January 2010 data, its market share in U.S. equity options would be 25.6 percent compared to 24.4 percent, an increase of 1.2 market share points.

“Exclusion of dividend trades from total industry volume data presents a more relevant measure of the relative trends in our business,” the exchange said. “These trades temporarily inflate and distort trading volume and market share when transacted.”

Meanwhile, two more option platforms are expected to go live this year, bringing the total to nine U.S. venues battling for order flow.

BATS Global Markets, a U.S.-based market operator, said last month it received U.S. regulatory approval to operate a U.S. equity options platform which is expected to launch on Feb. 26.

CBOE is also expected to roll out an electronic options platform called C2 this year.

Reporting by Jonathan Spicer and Doris Frankel in Chicago; Editing by Diane Craft

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