CBOE, NYSE To Trade Russell Index Equity Options

CBOE Holdings Inc. (CBOE) and NYSE Euronext (NYX) will share the right to list options on equity indexes owned by Russell Investments, whose gauges serve as benchmarks for $3.9 trillion in investments.

The agreement includes the six indexes which have listed options such as the Russell 2000 gauge, whose contracts are on multiple U.S. exchanges, the companies said today. Trading in the index-based derivatives will begin in late April. The other indexes are the Russell 1000, Russell 1000 Growth, Russell 1000 Value, Russell 2000 Growth and Russell 2000 Value.

CBOE, home of the biggest U.S. options market, already has an agreement with S&P Dow Jones Indices to list contracts linked to the Standard & Poor’s 500 Index, which only trade at the company’s Chicago Board Options Exchange. Exclusive rights to trade Russell stock-index futures are held by Intercontinental Exchange Inc., the energy and commodity futures bourse that in December agreed to acquire NYSE Euronext in a $8.2 billion deal.

Russell Investments, based in Seattle, said in January that distribution of real-time data for its indexes is switching to NYSE Euronext from Nasdaq OMX Group Inc. as the two firms plan to create new options on the gauges.

Exchanges are seeking to boost revenue amid declining volume. Options trading slowed to a daily average of 15.9 million contracts last year from a ninth-consecutive record of 18.1 million in 2011, data from the Chicago-based Options Clearing Corp. show. Daily average stock volume slipped to 6.42 billion shares in 2012 from 9.77 billion in 2009, data compiled by Bloomberg show.

To contact the reporter on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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