Lead Stories

CBOE holds lead as biggest U.S. options market
By Ann Saphir, Reuters
CBOE Holdings Inc, which runs the oldest U.S. stock-options market, handled more contracts than any other U.S. options exchange operator in April, figures from the OCC clearinghouse showed Tuesday. Some 86.6 million contracts changed hands at the Chicago Board Options Exchange during the month, more than at any of its five competitors and giving it a 27.1 percent market share, the figures on OCC’s website showed.
http://jlne.ws/ITgUZx

Quick View: OTC fight heads to Chicago
By Telis Demos and Hal Weitzman in Chicago, FT.com
The selection of Chicago as the site of this year’s International Swaps and Derivatives Association annual meeting, just a few “L” train stops away from the city’s listed derivatives exchanges, may be just a coincidence.
But ISDA taking its issues to the mid-west city neatly encapsulated the challenge faced by the New York dealer-dominated world of privately-negotiated, bilateral derivatives. That is; how to maintain its position in financial markets against Chicago’s futures and options exchanges while an onslaught of regulation, technology and capital stringency possibly shifts the ground away from them.
http://jlne.ws/Irjwhi


OCC announces Cleared contract Volume Declined 5% In APRIL, Securities Lending Volume rose 34%
CHICAGO (May 1, 2012) OCC announced that cleared contract volume reached 321,989,037 contracts in April, a 5 percent decrease from the April 2011 volume of 338,562,433 contracts.
Based on Futures Industry Association data released in April, OCC’s first quarter cleared volume of 1,068,689,268 contracts accounted for 57 percent of all listed derivatives contracts cleared in the U.S. during that period. Options: Exchange-listed options volume reached 319,640,606 contracts in April, a 5 percent decrease from April 2011. Year-to-date options trading volume is down 7 percent from 2011 with 1,380,749,815 contracts.
http://jlne.ws/InAiPx

THE OPTIONS INDUSTRY COUNCIL ANNOUNCES APRIL OPTIONS TRADING VOLUME DECREASED 5%
CHICAGO (May 1, 2012) – The Options Industry Council (OIC) announced today that 319,640,606 total options contracts changed hands in April, 4.71 percent less than the 335,425,947 contracts traded in April 2011.
Average daily trading volume in April was 15,982,030 contracts, 4.71 percent lower than the 16,771,298 contracts in the same year ago period. Year-to-date volume for April stood at 1,380,749,815 contracts, which is 7.04 percent lower than the 1,485,309,264 contracts traded at the same point last year. http://jlne.ws/IruHGW

Exchanges

ISE Reports Business Activity for April 2012
· ISE was the second largest equity options exchange in April with market share of 18.3%, excluding dividend trades.
· Dividend trades made up 4.5% of industry volume in April 2012.
The International Securities Exchange (ISE) today reported average daily volume of 2.6 million contracts in April 2012. This represents a decrease of 10.7% compared to April 2011. Total options volume for the month was 52.0 million contracts. ISE was the second largest U.S. equity options exchange in April with market share of 18.3%*.
http://jlne.ws/IHoIJN (PDF)

ISE Receives Award for “Most Proactive Exchange for ETF Options/Derivatives”
at 8th Annual Global ETF Awards NEW YORK, May 1, 2012 – The International Securities Exchange (ISE) announced today that it received the “Most Proactive Exchange for ETF Options/Derivatives” award at the 8th Annual Global ETF Awards Dinner and Workshop on April 26, 2012. This is the second year in a row that ISE has received this honor. Hosted by exchangetradedfunds.com, the Global ETF Awards are awarded to ETF industry participants for outstanding achievements in 2011. Winners were selected by ETF industry professionals representing over 520 organizations worldwide. http://jlne.ws/JLFcCt (PDF)

NASDAQ OMX Launches New Options Based on MSCI Indexes
MSCI Emerging Markets and EAFE Index Options are the Only Cash-Settled Options Available in the U.S. on These Major Global Indexes
NEW YORK, May 1, 2012 (GLOBE NEWSWIRE) — The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) announced today the launch of MSCI Emerging Markets (Symbol: EEMIQ) and MSCI EAFE (Symbol: EAFEQ) Index Options, which will be the latest U.S. options listings offered at NASDAQ OMX PHLX. They are the first and only listed cash-settled options available in the U.S. on these major global indexes.Beginning today, these listings are available to investors who seek direct exposure to a previously untapped market with a cash-settled options offering that exactly tracks the performance of the index. NASDAQ OMX PHLX market participants will be among the first to trade this offering and may use MSCI EM and MSCI EAFE Index Options to track the performance of the index, employ additional trading strategies for cash-settled index options and gain more opportunity to hedge.
http://jlne.ws/ITVZW5

Nasdaq Aims At Popular Emerging-Markets Trading
By Brendan Conway, Barrons.com
If you were to combine all the money investors have plunked into the iShares MSCI Emerging Markets Index Fund (EEM) and the Vanguard MSCI Emerging Markets (VWO), you’d end up with the second largest U.S. ETF, at $92 billion. It would displace today’s number two, the SPDR Gold Trust (GLD), currently at $69 billion. The combined fund’s size would rank behind only the $103 billion SPDR S&P 500 ETF (SPY).
All this by way of previewing what could be some new competition in one of this fertile area’s offshoots: The options market. There is a deep and liquid market for put and call options on the iShares EEM fund, where a range of investors go for portfolio insurance, speculative positions and everything in between. These contracts are routinely on the list of the most heavily traded options in the entire U.S. That’s where Nasdaq OMX Group (NDAQ) comes in.
http://jlne.ws/KoRlvG

Options Exchange Marketshare for April 2012
Courtesy of the OCC

April 2012 Total Options Marketshare:
AMEX- 14.66%
BATS- 3.14%
BOX- 3.87%
CBOE- 27.11%
C2- 1.32%
ISE- 16.27%
NSDQ- 5.65%
NYSE Arca- 9.83%
OMX PHLX- 18.15%

April 2011 Total Options Marketshare:
AMEX- 14.18%
BATS- 3.41%
BOX- 2.65%
CBOE- 25.70%
C2- 1.04%
ISE- 17.37%
NSDQ- 4.56%
NYSE Arca- 9.96%
PHLX- 21.14%

April 2012 Equity Options Marketshare:
AMEX- 15.81%
BATS- 3.39%
BOX- 4.18%
CBOE- 21.64%
C2- 1.38%
ISE- 17.50%
NSDQ- 6.11%
NYSE Arca- 10.61%
OMX PHLX- 19.38%

April 2011 Equity Options Marketshare:
AMEX- 15.09%
BATS- 3.64%
BOX- 2.82%
CBOE- 21.08%
C2- 1.11%
ISE- 18.32%
NSDQ- 4.86%
NYSE Arca- 10.60% PHLX- 22.48%

Strategy

An Options Trade Bernard Baruch Would Have Liked
By STEVEN M. SEARS, Barrons.com
Use call spreads to minimize risk and extend profits on two high-flying stocks.
Bernard Baruch, the legendary investor who avoided the Great Crash of 1929, credited his good
fortune with a simple investment habit: He sold stocks when they were rising, even if it meant selling too soon. That simple piece of advice is often hard for most investors to follow because no one wants to miss the chance to make more money — especially on a hot stock.
But a well-placed call option neatly solves the problem and reduces risk.
http://jlne.ws/InAU7Q

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