10 Years of PHLX @ Nasdaq

The oldest stock exchange in the United States hit another milestone – the Philadelphia Stock Exchange (PHLX) celebrated its 10-year anniversary as a part of the Nasdaq family on July 24.

While the ‘07-’08 timeframe is best remembered in financial circles as the time of “bailout this” and “subprime that,” it was a transformational period for non-crisis reasons at Nasdaq.

Nasdaq purchased PHLX – founded in 1790 as a venue for bond trading – for $652 million in 2008. At the time PHLX was the third largest options exchange, with some 20 percent market share, behind ISE and CBOE. Nasdaq was looking for new products and did not have an existing footprint in U.S. derivatives. (The PHLX deal came with a futures business, too.) Besides a new technological framework, the PHLX move brought some venerable personnel along with it – Meyer (Sandy) Frucher, then PHLX chairman and CEO and now vice chairman with Nasdaq, and Tom Wittman, then a PHLX senior vice president and now a Nasdaq executive vice president, head of global trading and market services and CEO of the Nasdaq stock exchange.

Five months before Nasdaq would complete its PHLX deal, it finished its acquisition of OMX for $3.7 billion, giving the exchange a European foothold. The OMX move came on the heels of a failed bid to purchase the London Stock Exchange in 2007. Nasdaq also acquired the Boston Stock Exchange in this period.  

Nasdaq’s purchase of the International Securities Exchange for $1.1 billion in 2016 further grew Nasdaq’s options franchise. According to Tabb’s Options Liquidity Matrix, Nasdaq’s six options exchanges had 35.3 percent market share in June 2018. PHLX accounted for 14.3 percent of that total. The options business at Nasdaq accounts for some $280 million in revenues.

For more on PHLX’s background see this video from Nasdaq.