Options Lunch With the New Exchange

Your intraday option s trading update. Does the option world need another
exchange? Shelly Brown and his team at the Miami International Securities
Exchange think so and are preparing to file with regulators all the paper work
needed to get the trading going. Brown, senior VP, strategic planning with the
Princeton, N.J-based exchange, told Options Lunch the Miami exchange (MISE for
short?) will offer all new technology, quick-order action and huge bandwidth.
"We are starting from scratch and building options trading systems. (Current
options exchanges) have legacy systems," originally built for equity trading,
said Brown. "We will be more flexible, provide more through-put and faster
speeds." Brown is a veteran of the options trading world. He has been with the
NASDAQ OMX, the Philadelphia Stock Exchange when NASDAQ swallowed it, and most
recently was with PEAK 6 Investments, owner of the OptionsHouse brokerage. There
are now nine options exchanges in the U.S. Total options trading volume set a
record in March with more than 417 million contracts changing hands. The overall
leader was the Chicago Board Options Exchange which dominates index options with
such products as the so-called "Fear Index," the CBOE Volatility Index
(CBOE: VIX ), and the S&P Index Options (CBOE: SPX ). The top exchange for
equity options in March was the NASDAQ OMX PHLX which held nearly 24% of that
market. Brown says Miami International plans to file all the right forms with
the Securities and Exchange Commission in the next three months. The goal is to
begin trading in the second quarter of 2012, he said. According to reports, the
Miami exchange has about 20 employees and a second office in Miami. Good luck to
the MISE team. But watch your tails, there are some big cats out there. High
Options Volume by Strike Top trading strike is the Industrial SPDR (NYSE: XLF )
with the XLF Jun11 40 Call trading a little more than 101,000 contracts, up .04
to .43. Microsoft (NASDAQ: MSFT ) selling off a little with the MSFT AprWk5 26
Call trading about 65,000 contracts. Its down .88 to .03. Time is ticking.
Citigroup (NYSE: C ) Jan12 7.5 Call trades about 52,000 contracts, unch at .02.
Also busy is iShares Russell 2000 ETF (NYSE: IWM ) with several strikes
including the IWM May 11 88 Put trading 43,525 contracts, down .38 to 2.23.