NEW YORK — Online brokerage E-Trade Group Inc. and other broker-dealers plan to start a new electronic stock-options exchange that will offer trading at a much lower cost than the four major options floors.
The new International Securities Exchange will be "much more efficient than a floor-based system," and could shave the price of an options trade by 30% or more, E-Trade Chairman William Porter said this week. Porter would be chairman of the new market.
The ISE aims to be up and running in January 2000, trading options on the shares of 600 companies. It would be the first new exchange in the U.S. since the Chicago Board Options Exchange was formed in 1973.
The $80-million exchange has been financed by a consortium of broker-dealers known as Adirondack Trading Partners. Not all the investors are being disclosed, but besides E-Trade, the group includes AmeriTrade Holding Corp., Knight/Trimark Group Inc., Scottsdale Securities and Herzog Heine Geduld.