A Change In Perspective
The options space has become so competitive that the only way to gain significant market share is to acquire a rival. There has been a tremendous amount of M and A activity in the options market over the past year. As a result, the overall options landscape has changed significantly since www.TheOptionsInsider.com launched in January 2007.
From a market share perspective, two acquisitions had the greatest impact on the industry:
- NASDAQ's acquisition of PHLX.
- NYSE Arca's bid for AMEX.
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June Total Market Share - Revised
source: OCC
- CBOE - 103,301,861 - 33.98%
- ISE - 81,421,295 - 26.78%
- NYSE/AMEX - 53,520,105 - 17.61%
- PHLX/NSDQ - 49,229,099 - 16.19%
- BOX - 16,531,604 - 5.44%
That was, until it made a bid for crosstown rival AMEX. As the above table shows, the combined NYSE Arca/AMEX entity has catapulted past NASDAQ/PHLX to claim the #3 spot on the options ladder. The gap between the two will likely close if AMEX continues to hemorrhage market share in the coming months. However, this reveals the dramatic impact of recent M and A activity on the options space.
The Year So Far
While snapshots of a single month are useful, the options market does not operate in a vacuum. As a result, it is often instructive to look at volume over longer time periods than a single month. Below is a chart that depicts the overall market share for all traded options contracts in 2008:
CLICK HERE FOR THE FULL-SIZED CHART
This data correlates well with the June market share data. It also suggests that, if oil and recession fears continue to dominate the headlines, then the CBOE's proprietary index suite will continue to gain ground in the endless turf war known as the options market.
