Nasdaq expands with options routing service
With the market focused on exchange expansion by
acquisition, International Securities Exchange (ISE) and Nasdaq
last week announced significant organic growth plans, with the
former announcing the launch of its venture into equity
trading, ISE Stock Exchange (ISESE). Nasdaq also crossed the
equity/options divide by launching options order routing,
though it did so through existing exchanges rather than its own
ISE was expected to commence trading in the third quarter.
The exchange said it would take a majority share in the venture
although it only expected to invest a nominal cash sum, with
the $32m establishment costs being paid by a raft of partners
from the banking and brokerage community.
These included Citadel Derivatives, Interactive Brokers
(IB), Bear Stearns, Deutsche Bank and JPMorgan Chase, further
establishing the trend for banks to fund, partner and invest in
exchanges. For example, the interests assumed by IB and Citadel
bolstered their respective exchange asset portfolios to three
each. Both firms also have a stake in Boston Options Exchange
(BOX) while IB also has a slice of OneChicago and Citadel a
piece of Philadelphia Stock Exchange.
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