NYSE Amex Options: A Revival Story

For NYSE Amex Options, 2011 was the turning point after several years of hard work. In November 2011, the Exchange hit new market share highs based on both volume and number of transactions, continuing months of growth. Today NYSE Amex Options executes roughly 1 in 5 trades industry wide and, at the time of writing, topped the industry for a sixth straight month by this metric. However, this was not always the case.

Prior to the deal with NYSE Euronext in October 2008, the picture was much less rosy for Amex. The Exchange touched a mere 1 in 50 trades and held an Equity Options Market Share of approximately 5%. The Exchange faced serious technology issues that had severely soured relationships between the Exchange and many Wall Street firms and some feared Amex could not recover.

However, under the stewardship and guidance of the NYSE Euronext US Options team, Amex moved seamlessly onto the NYSE technology platform in March 2009, heralding a revival for the Exchange. Amex migrated onto NYSE Euronext’s Universal Trading Platform (UTP) giving users access to all NYSE Euronext operated electronic and open outcry markets. For Amex clients this shift was monumental. Participants gained the ability to connect globally through a single gateway reducing costs and time to market, as well as the opportunity to connect to NYSE Euronext’s other Options SRO- NYSE Arca Options. Thus began the NYSE Euronext options motto “two great platforms, one great technology.” Furthermore, a new ethos permeated the way the Exchange functioned and once frosty relationships slowly thawed, thanks in large part to a modernization in the way client relationships are handled.

This growth for NYSE Amex Options was further solidified in September 2009 on the announcement that seven leading firms were purchasing a stake in Amex. The logic as noted by Larry Leibowitz, COO of NYSE Euronext, “You can own 100 % of something that grows at a low rate or you can own 50% of something you think is going to grow at a faster rate.”  This philosophy proved correct. The deal was finalized in June 2011 and since the initial agreement Amex Equity Option Market Share has increased from a market share of 8.8% up to 15.6%, solidifying Amex’s position as an exchange leader in the US Options space.

Today Amex Equity Option Market Share is 15.6%, topping the previous Amex high set the month before. This growth of a once beleaguered business has proven the true believers correct. The Exchange is capable of many things and with exciting growth in the Complex Order Book, volume has quintupled in the past year (based off of NYSE Euronext Internal Data from Jan 2011-Nov 2011). It seems the best is yet to come.