Chicago options exchange soars in US stock market debut

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The Independent Online

The last major unlisted bourse in North America went public yesterday when the Chicago Board Options Exchange, the biggest options trading venue in the US, began trading amid strong demand on Wall Street's Nasdaq index.

Shares in the CBOE opened at $33.31 – 15 per cent above the initial public offering (IPO) price of $29 per share – which itself was at the top end of the expected range of $27 to $29 apiece.

The debut, which saw the exchange raise about $339m by selling 11.7 million shares, was celebrated by traders throwing confetti on the floor of the CBOE in Chicago, The Illinois Governor Pat Quinn, the Mayor of Chicago Richard Daley and executives of the CBOE were also in attendance.

The offering was hailed as a success in what remains a volatile market for new listings. While 14 American IPOs have raised about $1.5bn since May, 18 have been put off or withdrawn, according to Thomson Reuters. Analysts say the listing of the CBOE could leave it vulnerable to a takeover, with speculation focused on the potential for approaches from the likes of NYSE Euronext and CME.

The CBOE, founded in 1973 as an offshoot of the Chicago Board of Trade, was the first US options exchange and it has earned $22.7m on revenues of $101.1m in the past quarter. It introduced options on the Dow Jones Industrial Average in 1997 and a year later saw annual volumes surpass more than 200 million contracts. By 2000, its annual volumes had jumped beyond 300 million contracts.

The busiest year in the exchange's history was 2008, when the CBOE dealt with business in 1.2 billion contracts as the credit crunch knocked world markets.