• BOX Options plans to start an open-outcry floor this year
  • Options market still has floors, an exception in modern era

In an age of light-speed electronic trading, an options exchange is going old school with a plan to let traders conduct business face to face.

BOX Options Exchange, which operates an electronic trading venue, plans to add open-outcry trading in Chicago later this year, according to Chief Executive Officer Edward Boyle. The proposal requires regulatory approval.

Few exchanges still have trading floors. Most fully operate out of nondescript data centers rather than grand temples of capitalism like the iconic New York Stock Exchange building in Manhattan. One of the biggest exchange operators, CME Group Inc., shut most of its pits last year and plans to close more in the next few months. The options market is an exception, a trend driven by some investors’ preference for the human touch when placing the complicated orders options trading is known for.

“There’s still a very good reason for trading floors to exist in options trading to facilitate these complex options trades,” Chicago-based Boyle said in an interview.

BOX is one of 14 exchanges in the U.S. equity options market. The Chicago Board Options Exchange has had a trading floor in Chicago since the 1970s, NYSE Group has them in New York and San Francisco, and Nasdaq Inc. operates one in Philadelphia. But starting a new trading floor is unusual these days.

“I can’t remember the last time someone has opened an open-outcry floor,” said Larry Tabb, the CEO and founder of research firm Tabb Group LLC who’s been in the securities industry since 1980.

BOX is owned by TMX Group Ltd., which also controls the Toronto Stock Exchange, and a group of brokers. TMX CEO Lou Eccleston said in August that his company was considering what to do next with the business, which handled 2.6 percent of U.S. options trading in April.

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