Essay About Europes Derivatives Market And Market Share

Merger Would Create Force in U.S. Options
Merger Would Create Force In U.S. Options
By BRENDAN CONWAY And CORRIE DRIEBUSCH
The anticipated tie-up between Deutsche Börse AG and NYSE Euronext would create a powerful force in the U.S.
options market and a dominant one in Europes derivatives market, factors that analysts said are drivers of the
merger talks.
Derivatives have been an important component of exchange earnings the last several quarters, and competition
for more market share has heated up. In the U.S., NYSE Euronexts Amex and Arca options exchanges handled
23% of the U.S. options markets volume in January, and Deutsche Börses International Securities Exchange had
17.5%.
The 40% potential combined market share would exceed that of CBOE Holdings Inc.s Chicago Board Options
Exchange, the biggest single options exchange, as well as Nasdaq OMX Group Inc., which has rivaled CBOE the
last year for the markets top position.
“I think weve seen over the last several years the value of derivatives franchises in the global exchange
environment,” with the high growth a continuing reason for buyouts and mergers, said Andy Nybo, head of
derivatives research at the Tabb Group in New York.
Deutsche Börse and NYSE Euronext said they are in advanced merger discussions. No deal has been reached,
according to the companies.
A merger was seen by market participants as likely to pressure both CBOE and Nasdaq to find their own partners
and build up market share, but the possible tie-up wasnt seen as having a big impact on other U.S. rivals.
Some in the industry viewed the CBOE as a kind of stealth winner. Unlike competitors, the Chicago