Seven, Eleven, and Now Twelve: How Many U.S. Equity Options Exchanges Are Enough?
Report Summary
Seven, Eleven, and Now Twelve: How Many U.S. Equity Options Exchanges Are Enough?
Competition between exchanges is fierce—what happens now that they own 12 listed equity options trading venues among them?
Boston, October 1, 2013 – Despite alarmingly frequent technical glitches, which could lead to a crisis in investor confidence, and flat or declining listed equity options trading activity, optimistic exchange organizations have added five equity options exchanges to the lineup since 2010, bringing the total number of U.S. equity options trading venues to a dozen. Product innovation may bring about sufficient demand to keep this industry growing in the long run. But given strong headwinds faced by the U.S. listed equities options industry, are 12 venues enough? And how can the industry handle the technical-glitch-related erroneous trades occurring at so many venues?
Based on January to August 2013 Aite Group conversations with market players, this Impact Report by senior analyst Howard Tai analyzes how the options trading environment has evolved in recent years. It also profiles the history and workings of the 12 options trading venues in the United States and highlights challenges faced by these entities and their customers. It is the second in a series of two Aite Group research reports that take an in-depth look at the future of the U.S. equity options industry--find the first one here.
This 70-page Impact Report contains 45 figures and seven tables. Clients of Aite Group's Institutional Securities & Investments service can download the report .