Wall Street's top broking firms, including Goldman Sachs, Merrill Lynch and Barclays, are buying a stake in a major US options exchange, as the war for a share of the $1.9trillion options trading market hots up.
NYSE Euronext, the owner of the New York Stock Exchange and the European exchange Euronext, is selling a majority stake in its NYSE Amex options exchange to a consortium of brokers in the hope of encouraging them to route their business through the company.
NYSE Amex has been losing business to other trading platforms for several years, even as the market for trading options - financial derivatives which allow investors to bet on the future movements of share prices and other instruments - has grown in size.
The fate of NYSE Amex mirrors wider problems for established exchanges, who have seen brokers set up their own "dark pools" of liquidity where they trade financial instruments privately between themselves.
Edward Boyle, senior vice president of US options for NYSE Euronext, said bringing in brokers as partners would help to improve the liquidity and efficiency of its market. He said: "Market participants will benefit from tighter spreads, deeper liquidity, superior technology, and the distinct market model of NYSE Amex options."
As well as Goldman, Merrill and Barclays Capital, the other investors are UBS, Citadel Securities, Citigroup and TD Ameritrade.
NYSE Euronext will still be the largest shareholder. It acquired the options exchange when it bought the American Stock Exchange for $260m last year.