Gary Katz, president and CEO of the International Securities Exchange (ISE), has seen the options markets change dramatically since he co-founded the all-electronic options exchange in 2000.
Now with the launch of ISE Gemini in August, the ISE is looking to add another exchange model that differs from the flagship exchange. Gemini also represents the 12th US options exchange. Katz sat down for this video interview with JLN editor-in-chief Jim Kharouf to talk about the new exchange, which garnered two percent marketshare of the total industry options volume in its first month. The exchange also rolled out the first 300 names during its first weeks, ahead of its original planned rollout.
Katz also spoke about how the exchange is drawing options order flow that rests on the order book at the exchange. This type of pricing model is designed to provide more choice to its existing customer base.
Next up, ISE Gemini still has more listings to go. It currently has the top 500 names that represent about 90 percent of options volume. The final 10 percent of the listings will be added as the exchange increases its capacity, Katz said.
Another area ISE is focused on is in the exchange traded funds (ETF) space, particularly benchmark index ETFs. Katz said his team is looking closely at how ETFs operate, especially in terms of funds under management, and how such an approach can be further integrated into the exchange. In terms of options, ISE is working to expand its “implied order functionality,” which it launched in May 2012. That order type, allows multi-legged strategy orders by enabling greater interaction between the complex and regular order books. In its first 12 months, more than 15 million such orders were executed on ISE. The exchange hit the 20 million mark on October 15, 2013.