
Electronic Trading Sweeps Options Industry
What a difference six years has made in the U.S. options industry.
In 1998 the market was effectively divided into exclusive fran-
chises. Very few options traded on more than one exchange, and
all trading was conducted in traditional open outcry environments
dominated by crowds of specialists. Prices were indicative, and
there was a gentlemen’s agreement to limit competition.
Today the situation is radically different. Starting in August
1999, the exchanges began to compete directly for order flow
across a broad range of options classes, and multiple listings rap-
idly became