Magazine article Modern Trader

CBOE Takes on New York

Magazine article Modern Trader

CBOE Takes on New York

Article excerpt


When New York Stock Exchange (NYSE) Chairman John Thain visited the Chicago Board Options Exchanges (CBOE) last fall he expressed praise and a little envy of the CBOE's hybrid trading model. It would have been hard to predict at the time that less than a year later the two exchanges would be positioned to compete across three asset classes.

In July, CBOE announced that it would be launching a new securities trading marketplace, CBOE Stock Exchange LLC (CBSX). CBOE is partnering with Interactive Brokers Group LLC (IB), LaBranche & Co. Inc., Susquehanna International Group LLP and VDM Specialists. It is significant because, as CBOE Chairman and CEO Bill Brodsky pointed out to Thain during his visit, CBOE is NYSE's biggest customer.

The CBSX will feature a hybrid market and will trade NYSE, Nasdaq Stock Market and American Stock Exchange listed securities. Its launch is planned in early 2007 pending final regulatory approval.

"We have the electronics that are as good as anybody's and we have the ability of the broker to walk up and do a cross or a trade in a crowd," Brodsky says, adding, "There is a tremendous amount of stock that gets done in and around our options business so there is a potential for synergy there."

Aaron Hantman, CEO and president at Susquehanna says, "There's a total transition and evolution in the marketplace and the market structure of all exchanges. This is a natural fit for us." Hantman points out that Susquehanna has always been involved in options market making at CBOE, which is a natural order flow provider to equity markets. …

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