MIAX sees ‘structural tailwinds’ driving growth one year after IPO

Speaking to FOW twelve months after the firm completed its initial public offering (IPO) on the New York Stock Exchange on August 14, chairman and chief executive officer Thomas Gallagher said that progress the firm has made is reflected in growth across its main businesses.

MIAX, which operates four US equity options exchanges, in the first half of the year had a market share of 16.9% according to data covering the US multi-listed options market. More recently, that has climbed to 18.4%, according to data published by MIAX covering average activity in the month to August 19.

“Our share in US equity options is now approaching 19% - in the second quarter it was around 16.5%,” Gallagher (pictured) said. “That will fluctuate like any other business, and in this case it is dictated by the dynamic around the economics of attracting flow. I would say there are significant structural tailwinds that are still helping our most mature and robust markets.”

Of that total, 3.84% came from MIAX Sapphire, the electronic options exchange and trading floor that uses a taker-maker fee model. Sapphire was launched in 2004 with the trading floor opening in September 2005.

“The first is the floor, we have more volume that can be attracted by adding more features and improving pricing,” Gallagher added. “Since the IPO we have built out a lot of functionality onto the floor and now some of that chunky business can come – but naturally the fees have to reflect those larger tickets.

“We opened the floor in September, and we now have a good suite of floor brokers and are adding another market maker this month which gets us up to eight. As we get participants physically relocating to Miami, you are going to get more volume.”

The emergence of blockbuster IPOs from technology related names like SpaceX, means that MIAX can leverage its strengths in attracting flows from existing clients.

“The environment, with a pipeline of historically important IPOs coming to market, plays to our strong suit,” Gallagher said. “We typically get an outsized percentage of highly volatile, retail focussed securities trading with us as these blockbuster names come to the listed market.

“I believe that the overall pie could be 15% to 17% bigger, meaning growth resulting from these IPOs, and in our case that outsize portion of trading relative to our historic market share means more volume in the options business.”

The MIAX IPO came after the firm signed a licensing agreement with Bloomberg Index Services. The ten year partnership was made to develop a suite of index futures and options based on Bloomberg indices. Part of the process included moving the then Minneapolis Grain Exchange (MGEX) technology to an inhouse system (called Onyx) to create MIAX Futures.

“We now have a strong foundation that is built,” Gallagher said. “Moving to Onyx was a major step for us last year, and seeing people show up and connect to our ecosystem was really a crucial part of our plans to grow from commodities and really drive the next generation of financial futures.

“So that was the plan, and the good news is that people have come, and we have data centers up and running in both Chicago and New Jersey. The screens are lit and we have multiple market makers providing two-sided quotes.”

MIAX Futures in May listed its “Tini” Bloomberg 100 index future, the first in a series of launches planned this year. It was followed by a Tini version of the B500 index in early June, and a standard-size contract the following week, in a bid to create an alternative to widely traded S&P 500 and Nasdaq benchmarks.

The Options Clearing Corporation (OCC) clears and settles the contracts, and MIAX has made an application with the for its futures commission merchant (FCM) to be approved for OCC membership, Gallagher said. MIAX bought regulated FCM Dorman Trading in 2022 to help facilitate expansion plans.

“The depth and the volume are where I want them, and the next step for us is retail engagement,” Gallager added. “We want the correct pricing and marketing incentives in place to attract the large retail brokers to this market. We did two things in the last 90 days that will really help that process – MIAX Futures Exchange became a member of the OCC so that Bloomberg financial futures can have the benefits of efficient margining, and Dorman Trading, our futures commission merchant became a clearing member as well.

“The way I think about it is that, like what we have done in the wider options space, we are trying to grow the overall market for financial futures in a meaningful way. I consider MIAX a disruptor in this category, because of the differentiated technology stack, the differentiated index and then the differentiated pricing structure. Bloomberg is a perfect partner for that.”

The US market has seen a wave of innovative products come to market in the period, including the emergence of prediction contracts and perpetual futures in the US market. MIAX retained a stake in Rothera when the old MIAXdx venue to Robinhood and Susquehanna International Group in late 2025. The firm is watching the perpetual futures market with interest as it executes its roadmap.

“I actually welcome the CFTC’s framework bringing these perpetual contracts into regulated US markets,” Gallagher said. “We’ll see if it takes hold, but I think it could bring a lot of volume that is being executed offshore into the US marketplaces.

“So I’m taking a position of what I would call active regulatory engagement on the topic, and I’m certainly open to considering an interesting product in that space. That could either be on the existing futures exchange or a new venue.”

Reflecting on the experience since the IPO, Gallagher said it has been transformative for the reach the firm now has with stakeholders.

“To me its been a large positive for the firm, yes there is a lot more work preparing disclosures and speaking with shareholders but I couldn’t pay for the megaphone its given MIAX,” he added. “There are a lot more people interested in what we are doing, thinking or saying and that has been extremely helpful to our global reach and it has exposed us to a whole new class of investors.”