The International Securities Exchange (ISE) today reported average daily volume of 2.5 million contracts in December 2010, a decrease of 6.4% over December 2009. Total options volume for the month was 56.0 million contracts.
Average daily volume for full year 2010 was 3.0 million contracts, and total volume for the year was 745.2 million contracts. ISE maintained its position as the second-largest U.S. equity options exchange in 2010 with market share of 21.7%*. Business highlights for the month of December include:
- On December 8, 2010, ISE announced that it will begin the rollout of its new options trading system in April 2011. Based on Deutsche Börse Group's Optimise™ trading architecture, the new platform will be an industry leader in terms of latency and performance. ISE's members will benefit from enhanced functionality and improved risk management tools to enhance the ISE customer experience.
- On December 13, 2010, ISE announced that it was the first options exchange to offer post-trade allocation functionality for the stock leg of complex options orders. For the first time, firms who solicit liquidity from multiple parties for their clients' tied-to-stock options orders can send their orders to ISE as one package and then split it among different parties after the trade is executed.
- On December 14, 2010, ISE launched Sweep and Cross functionality in its best-in-class front-end trading system, PrecISE Trade®. With the efficiency of a single click, traders who enter large crossing orders are now able to sweep the entire options market to execute against the top of book liquidity at other exchanges and then cross the remainder of the order at ISE.
- On December 20, 2010, ISE announced that aggregate assets under management for ETFs based on its proprietary indexes exceeded the $1 billion milestone.
Business highlights for the full year 2010 include:
- First Trust Advisors L.P. launched three new exchange traded funds (ETFs) based on ISE's newest proprietary sector indexes. In March 2010, First trust launched ETFs based on the ISE Global CopperTM Index and the ISE Global PlatinumTM Index. The ISE Global Copper Index and the ISE Global Platinum Index provide benchmarks for investors interested in tracking public companies that are active in the copper mining industry or the platinum group metals mining industry, respectively. In April 2010, First trust launched an ETF based on the ISE BICK™ Index, a proprietary index that tracks the performance of the largest and most liquid public companies that are domiciled in Brazil, India, China or South Korea.
- ISE expanded its ISE FX Options® portfolio with the launch of currency options on the Brazilian real (Symbol: BRB). In April 2010, ISE extended the trading hours for all products in its suite of ISE FX Options. Trading in ISE's currency options now opens at 7:30 a.m. ET and closes at 4:15 p.m. ISE also launched an online trader community exclusively dedicated to FX options at www.fxoptions.com . The new website features breaking news, trading and educational tools, as well as market commentary and analysis on
- ISE introduced Do Not Route (DNR) orders for both priority and professional customers. This new order type allows ISE's customers to indicate that they want to cancel their options orders rather than have them routed to another exchange if the National Best Bid or Offer (NBBO) is not posted at ISE.
- ISE launched a new Step Up and Match feature for Facilitation and Price Improvement Mechanism (PIM) orders. These orders are exposed to all ISE market participants who may respond to participate with the order during a one second auction. The Step Up and Match functionality now allows firms originating the order to step up and match the best price achieved during the auction or up to a specific limit price, allowing greater flexibility for participation.
- ISE expanded the number of expiration months available for 20 of the most actively traded options classes on its exchange. ISE pioneered the pilot program, which allows all US options exchanges to list up to two additional, consecutive expiration months. Each options exchange can select up to 20 options classes for the pilot.
- ISE made an investment in Hanweck Associates, LLC, a premier financial-services provider specializing in high-performance risk management and trading solutions for institutional investors. ISE's minority investment helped support further product development to meet the increasing market demand for real-time options analytics. The partnership also provides ISE and Hanweck Associates with opportunities for collaboration in ISE's suite of market data product offerings.
- In November 2010, Longitude LLC (Longitude), a wholly owned subsidiary of International Securities Exchange Holdings, Inc. (ISE Holdings), announced that it is exploring new business opportunities for its patented technology platform. Longitude's calculation engine uses parimutuel principles to aggregate liquidity and produce fair and efficient prices for event-driven transactions. The innovative features of this proprietary system enable a broad range of possible applications. Among the business opportunities being considered, Longitude is exploring the introduction of its powerful technology platform to the parimutuel wagering industry, where it can provide increased transparency, improved record keeping, and the efficiencies of a single parimutuel wagering pool.
- In March 2010, ISE enhanced the risk management tools available to its options exchange members connecting via FIX. The enhancement allows members to define hard risk management limits for their own connections and their sponsored access customers. ISE's risk management tools also include order monitoring via PrecISE, FIX Trade Drop Copy Reports and the FIX Order Drop Copy Feed, which allows exchange members to monitor firm and sponsored customer activity in real time. These reports are available for orders routed through PrecISE, FIX and API connections.
- In March 2010, ISE published its whitepaper Dividend Trade Strategies in the U.S. Options Industry. In June 2001, ISE began publishing dividend trade statistics on its website.
- On May 26, 2010, ISE celebrated its 10th anniversary and a decade of innovation and leadership in the options industry.To commemorate ISE's 10th anniversary, New York City's Deputy Mayor Robert Lieber opened the exchange for trading and presented ISE with a proclamation from the City of New York.
- In honor of its tenth anniversary, ISE partnered with Ronald McDonald House New York to launch its first Corporate Social Responsibility Program, "Ten in Twenty-Ten." Ronald McDonald House New York provides temporary housing and support services for pediatric cancer patients and their families, while they undergo active treatment. Under this initiative, ISE organized ten different events to benefit the families staying at Ronald McDonald House New York. ISE's Corporate Social Responsibility initiative will extend into 2011 and beyond.
- In August 2010, ISE submitted a comment letter to the Securities and Exchange Commission (SEC) recommending that the SEC examine certain anticompetitive and discriminatory fee practices at three options exchanges, demonstrating its ongoing commitment to fostering a fair, efficient marketplace for all types of investors. ISE stated that as fee schedules in the options industry grow increasingly complex, it is important for the SEC to ensure that opaque fee practices do not foster unfair discrimination among categories of market participants nor work against the robust competitive standards the Commission has set for the marketplace.
Detailed volume statistics are found in the tables below:
Total Options Volume (Equity, ETF, Index and FX Options)
Equity and ETF Options Volume Statistics
Index Options Volume Statistics
ISE FX Options® Volume Statistics
*ISE does not include dividend trade volume in market share statistics. ISE's market share statistics continue to be negatively impacted by dividend trade strategies that are permitted based on a non-economic rationale, inflate and distort trading volume and market share when transacted. Exclusion of dividend trades from total industry volume data presents a more relevant measure of the relative trends in our business. For ISE's whitepaper on dividend trades and their impact on the options industry, please visit www.ise.com/dividendtrades.
Dividend Trade Impact on Industry Market Share**