MIAX Options Trading Floor Kicks Off in Miami Amid Market Boom
(Bloomberg) -- Fresh off its own public-market debut, Miami International Holdings Inc. started its physical trading floor for options with some of the largest market-making firms, including Jane Street Group, Susquehanna International Group and Citadel Securities providing quotes out of Miami.
The new location gives MIAX, as the company is known, access to a slice of the market it was previously excluded from — the business of handling complex single stock and ETF orders, which are still frequently handled in person at places including the Philadelphia Stock Exchange, founded in 1790 and now owned by Nasdaq Inc.
“We’ve never had access to 100% of the market,” MIAX Chairman and Chief Executive Officer Thomas Gallagher told Bloomberg TV. “This gives us access to that 6% to 7%” of the market by contract volume that’s still traded in person, Gallagher said.
Options is one of the rare asset classes where hand signals and verbal communications are still used to place orders. In open-outcry derivatives trading, brokers shout out client orders to buy or sell options to market makers.
Other market-making firms taking seats in the new trading pit include Group One Trading, IMC and Wolverine Trading, alongside brokers such as Casey Securities and Matrix Executions, according to a MIAX spokesperson. MIAX operates nine securities and derivatives exchanges, and has a 16% market share of the US-listed options market.
Options trading has exploded since the Covid-19 pandemic and the meme-stock craze of 2021. Options in the US trade on exchanges, meaning MIAX and its competitors, such as Cboe Global Markets Inc., Nasdaq and Intercontinental Exchange Inc., have benefited from the rise in retail trading.
Overall US options volume rose 22% in August, with an average of 60 million contracts changing hands a day compared with the same month a year ago, according to data from the Options Clearing Corp.
Cboe operates a thriving trading floor in Chicago, dominated by its flagship S&P 500 Index Options pit, while ICE still has in-person options trading at NYSE on Wall Street and at NYSE Arca in San Francisco. BOX Options Exchange also has a physical presence in Chicago.
Warm Weather Lure
The new physical trading floor follows the electronic options venue that MIAX launched last year known as MIAX Sapphire. The firm made a bet on Miami not just because it’s the firm’s namesake, but due to its warm weather and lower taxes, which it sees as a lure for traders to come from New York, Chicago and other parts of the country.
“People pick up an immediate 10% or 12% raise just by being in this very business-friendly jurisdiction,” Gallagher said.
The parent company, Miami International Holdings Inc., went public last month, in a debut that raised $345 million for the Princeton, New Jersey-based exchange operator. MIAX’s shares have soared roughly 60% since the initial public offering.
MIAX is set to launch a new set of futures and options based on the Bloomberg 500 Index next year, the company spokesperson said.
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