International Securities Exchange Holdings, Inc. is a wholly owned subsidiary of German derivatives exchange Eurex

Eurex

Eurex is one of the world's leading derivatives exchanges, providing European benchmark derivatives featuring open and low-cost electronic access globally...

. It is a member of the Options Clearing Corporation

Options Clearing Corporation

Options Clearing Corporation or OCC, founded in 1973, is the world's largest equity derivatives clearing organization, providing central counterparty clearing and settlement services to 14 exchanges and platforms for options, financial and commodity futures, security futures and securities...

 (OCC) and the Options Industry Council (OIC). Historically, responsibility for organizing the Options Industry Conference is rotated amongst the exchanges on an annual basis. ISE is organizing the 28th annual conference, which will be held in Phoenix, Arizona from April 29 to May 1.

Founded in 2000, the ISE began its inception in 1997 with then-chairman of E-Trade, William A. Porter

William A. Porter

In 1982, William A. Porter and Bernie Newcomb founded the first ever electronic stock brokerage, E*TRADE — heralding both the demise of the ticker tape and the advent of the electronic trading age....

 and his colleague, Marty Averbuch. They approached David Krell and Gary Katz about their concept and the four founded what is today the International Securities Exchange, the world’s largest equity options exchange to date.

Launched as the first fully electronic US options

Option (finance)

In finance, an option is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price. The buyer of the option gains the right, but not the obligation, to engage in that transaction, while the seller incurs the...

 exchange, ISE developed a unique market structure for advanced screen-based trading.

ISE offers equity and index options, including proprietary index products, as well as FX options based on foreign currency pairs. ISE also offers market data tools designed for sophisticated investors seeking information on investor sentiment, volatility

Volatility (finance)

In finance, volatility is a measure for variation of price of a financial instrument over time. Historic volatility is derived from time series of past market prices...

, and other options data.

ISE Stock Exchange launched in September 2006. In August 2008, ISE Stock Exchange announced a partnership with Electronic Communication Network

Electronic Communication Network

An electronic communication network is the term used in financial circles for a type of computer system that facilitates trading of financial products outside of stock exchanges. The primary products that are traded on ECNs are stocks and currencies. The first ECN, Instinet, was created in 1969...

 (ECN) Direct Edge. The deal makes the ISE Stock Exchange a wholly owned subsidiary of Direct Edge and will give ISE an ownership stake in Direct Edge.

ISE Options Exchange

The ISE Options Exchange lists over 2,000 equity, index, ETF and quarterly options. ISE introduced index options in October 2003 and later in 2004 launched ISE Sector Indexes - industry indexes that track the performance of publicly traded companies in various industries. In 2007, ISE announced a partnership with First Trust to launch ETFs based on ISE proprietary indexes.

Since April 2007, the exchange also trades FX options, options based on foreign currency movements. These options are exchange-listed securities that can be accessed through most major brokerage accounts. All ISE FX Options have U.S. Dollar-based underlying values, which have an underlying value similar to traditional equity or index options and are cash-settled, eliminating the need to hold the actual foreign currency.

ISE offers educational content, including podcasts and webinars, which allow people to learn trading options strategies

Options strategies

Options strategies can favor movements in the underlying that are bullish, bearish or neutral. In the case of neutral strategies, they can be further classified into those that are bullish on volatility and those that are bearish on volatility...

 for individual and institutional investors.

ISE Stock Exchange/Partnership with Direct Edge

The ISE Stock Exchange launched in September 2006 and is an electronic marketplace offering two primary capabilities on one platform: “MidPoint Match” and “Displayed Market”. 'MidPoint Match' is an exchange-based, non-displayed market. Members can use MidPoint Match to trade equities instantaneously at the exact midpoint price of the National Best Bid and Offer (NBBO). Displayed market is a fully electronic displayed market of the Best Bid and Offer trading the common stocks and ETFs listed on the NYSE, Nasdaq and Amex.

The ISE Stock Exchange became a wholly owned subsidiary of ECN Direct Edge in December 2008. ISE now holds ownership stake in the company. Direct Edge will continue with its efforts to submit two Form 1 applications to gain exchange status for the purpose of operating EDGA and EDGX as newly registered national securities exchanges. Until SEC approval of the two exchange licenses is granted, Direct Edge will utilize the ISE Stock Exchange for quotation display and tradethrough protection in the National Market System. During this period, the ISE Stock Exchange will continue to operate as a facility of ISE, LLC. ISE will also provide data center and regulatory services for Direct Edge exchange subsidiaries once they become part of the National Market System.

Timeline

2000	February 24, 2000: Registered as a national securities exchange with the Securities and Exchange Commission May 26, 2000: Launched its Options Exchange - the first transaction was a purchase of 20 SBC Communications October 45 calls.
2001	May 29, 2001: Traded its 25 millionth contract. November 1, 2001: Became the 3rd largest U.S. equity options exchange when average daily volume for October 2001 reached 380,299 contracts,
2002	May 22, 2002: Met its goal of listing equity options representing 90% of average daily trading volume in the US options industry. October 29, 2002: Traded its 200 millionth contract.
2003	February 20, 2003: Traded its 250 millionth contract. March 1, 2003: Became the largest US equity options exchange after average daily volume for February 2003 reached 710,218 contracts.
2004	January 2004: Was named Derivatives Exchange of the Year by Risk Magazine for the second time in three years.
2005	March 9, 2005: Became the first securities exchange to sell its shares in an initial public offering. May 24, 2005: Traded its 1 billionth contract. December 8, 2005: Completed its secondary public offering.
2006	January 20, 2006: Traded a record daily trading volume of 4,580,678 equity and index options contracts. March 24, 2006: Launches its alternative markets trading platform. May 16, 2006: Traded its 1.5 billionth contract. September 1, 2006: Adopted a holding company structure. September 8, 2006: Launched the ISE Stock Exchange, with its first product, MidPoint Match. December 8, 2006: ISE Stock Exchange rolled out its fully displayed stock market, the first fully electronic exchange to provide integrated access to non-displayed and displayed liquidity pools.
2007	February 27, 2007: Set a new record daily trading volume of 5,531,875 equity and index options. contracts. March 5, 2007: Announced partnership Toronto Stock Exchange to launch DEX, a new derivatives market in 2009. The agreement was later terminated when Toronto Stock Exchange agreed to buy Montreal Exchange Inc. March 9, 2007: Traded its 2 billionth options contract. April 17, 2007: Launched ISE FX Options. April 30, 2007: German exchange operator Deutsche Börse Deutsche Börse Deutsche Börse AG is a marketplace organizer for the trading of shares and other securities. It also is a transaction services provider. It gives companies and investors access to global capital markets. It is a joint stock company and was founded in 1993. The headquarters are in Frankfurt,...  announced it will buy International Securities Exchange (ISE.N) for $2.8 billion, creating a transatlantic derivatives marketplace. December 20, 2007: Eurex completes acquisition of ISE. ISE will continue to be regulated by the SEC as a registered national securities exchange and will operate under the existing management team as an independent subsidiary of Eurex.
2008	September 18, 2008: Trades a new record daily trading volume of 7,903,304 options contracts. October 28, 2008: Enters into an agreement with the New York Stock Exchange New York Stock Exchange The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...  to license the right to list ISE FX Options products on the NYSE Arca Options platform. December 23, 2008: Completes deal with Direct Edge. ISE Stock Exchange becomes a wholly owned subsidiary of the Direct Edge with ISE gaining a 31.54% ownership stake.

See also

• Binomial options model
• Call option
  Call option
  A call option, often simply labeled a "call", is a financial contract between two parties, the buyer and the seller of this type of option. The buyer of the call option has the right, but not the obligation to buy an agreed quantity of a particular commodity or financial instrument from the seller...
  
  
• Index options
• Moneyness
  Moneyness
  In finance, moneyness is a measure of the degree to which a derivative is likely to have positive monetary value at its expiration, in the risk-neutral measure. It can be measured in percentage probability, or in standard deviations....
  
  
• Option-adjusted spread
  Option-adjusted spread
  Option adjusted spread is the flat spread which has to be added to the treasury yield curve in a pricing model to discount a security payment to match its market price. OAS is hence model dependent. This concept can be applied to a mortgage-backed security , option, bond and any other interest...
  
  
• Option screener
  Option screener
  An option screener is a tool that evaluates options based on criteria and generates a list of potential trading ideas. Most people who trade options are technical traders. It essentially means they look for patterns in charts. Also they use statistical correlations and deviations and give them...
  
  
• Option time value
  Option time value
  In finance, the time value of an option is the premium a rational investor would pay over its current exercise value , based on its potential to increase in value before expiring. This probability is always greater than zero, thus an option is always worth more than its current exercise value...
  
  
• Option time value
  Option time value
  In finance, the time value of an option is the premium a rational investor would pay over its current exercise value , based on its potential to increase in value before expiring. This probability is always greater than zero, thus an option is always worth more than its current exercise value...
  
  
• Put option
  Put option
  A put or put option is a contract between two parties to exchange an asset, the underlying, at a specified price, the strike, by a predetermined date, the expiry or maturity...
  
  
• Put-call parity
• Strike price
  Strike price
  In options, the strike price is a key variable in a derivatives contract between two parties. Where the contract requires delivery of the underlying instrument, the trade will be at the strike price, regardless of the spot price of the underlying instrument at that time.Formally, the strike...
  
  
• Volatility smile
  Volatility Smile
  In finance, the volatility smile is a long-observed pattern in which at-the-money options tend to have lower implied volatilities than in- or out-of-the-money options. The pattern displays different characteristics for different markets and results from the probability of extreme moves...