International Securities Exchange (ISE)
ISE Launches Options Trading on the NASDAQ Q-50 Index
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Feb 9, 2009 - 6:50:40 PM

ISE Launches Options Trading on the NASDAQ Q-50 Index

The International Securities Exchange (ISE) announced

that it has launched options trading on the NASDAQ Q-50 IndexSM (Ticker: NXTQ), a benchmark that tracks the 50 non-financial securities that next qualify for inclusion in the NASDAQ-100 Index. The NASDAQ-100 Index comprises the 100 largest domestic and international nonfinancial

securities listed on The NASDAQ Stock Market® based on market capitalization. Options trading on the NASDAQ Q-50 Index began trading on ISE on December 23, 2008. Timber Hill LLC serves as the Primary Market Maker for this new product.   This will provide investors with the ability to trade options on a diverse basket of the fastest growing non-financial companies listed on The NASDAQ Stock Market.   It is said that this new product will allow ISE’s customers to trade their views on some of the most closely watched securities listed on NASDAQ’s marketplace.

This should give investors who use the NASDAQ Q-50 Index in their portfolios the additional flexibility of incorporating options into their trading strategies.   The NASDAQ Q-50 Index is a market-capitalization weighted, price return index that commenced calculation on October 10, 2007 with a base value of 150.00. It does not contain securities of financial companies including banking and investment companies, as these are ineligible for

NASDAQ-100 Index inclusion.

The International Securities Exchange (ISE) reported record average daily volume of 4.0 million contracts traded in 2008, exceeding average daily

volume for 2007 by 24.3%. ISE traded an average daily volume of 2.7 million contracts in the month of December.

For full year 2008, average daily trading volume of all options increased 24.3% to an annual record of 4.0 million contracts traded as compared to 3.2 million contracts traded in 2007. Total options contracts traded in 2008 increased 25.3% to a record 1.0 billion contracts from 804.4

million contracts traded last year.   In December 2008, average daily trading volume for all options contracts decreased 15.1% to 2.7

million contracts compared to 3.1 million contracts in December 2007. Total options volume for the month decreased 6.7% to 58.6 million contracts from 62.8 million contracts in the same year ago period.

2008 Highlights

• On March 10, 2008, ISE’s Depth of Market Feed for options was launched through PrecISE Trade™, its proprietary front-end trading application. ISE’s Depth of Market Feed is a real-time data feed that provides the aggregated volume of all quotes and orders available at each of the top five price levels for options that trade on ISE.

• On March 12, 2008, ISE, Eurex and The Options Clearing Corporation (OCC) announced their plan to create a transatlantic trading and clearing link that will give Eurex customers access to ISE’s options market using their existing Eurex connections. The link, which will be implemented in the second half of 2009 pending regulatory approvals, will provide

Eurex members with access to the full suite of options products available at ISE using their current connectivity and clearing accounts.

• On June 18, 2008, the First Trust ISE Global Wind Energy Index Fund began trading under the ticker symbol FAN. Based on the ISE Global Wind Energy Index, which includes global listings of companies that are active in the wind energy industry, the ETF was the newest addition to ISE’s suite of innovative proprietary indexes.

• On September 18, 2008, ISE’s options exchange set a new record daily trading volume of 7,903,304 options contracts, an increase of 14.2% over the previous record of 6,920,132 contracts traded on November 8, 2007.

• On December 23, 2008, ISE and Direct Edge Holdings announced that they have completed the transaction through which the ISE Stock Exchange has become a wholly owned subsidiary of Direct Edge. ISE also gained a 31.5% equity stake in Direct Edge.   Until Direct Edge receives SEC approval for two exchange licenses, it will utilize the ISE Stock Exchange for quotation display and trade-through protection in the National Market System. During this period, the ISE Stock Exchange will continue to operate as a facility

of ISE, LLC. ISE will also provide data center and regulatory services for Direct Edge exchange subsidiaries once they become part of the National Market System.

• ISE was the largest U.S. equity options exchange in December.

• In December 2008, ISE traded more volume than any other options exchange in 1,197 of 2,052 issues in its listings.