We are currently waiting for regulatory approval for electronic buy write packages, or a stock and an option package tied together. That will allow market participants to send single orders that have multi-product components. The option side gets optioned for price improvement, and the stock part, which gets priced as part of the option process, gets printed on CBSX. That is a multi-product offering that is serviced by an asset independent trading platform and is executed in a single regulatory entity. I believe that offering is unique in the United States.

The matching system is a very robust and a very fast system. The execution speed is in the range of 2 milliseconds. Our order capacity is growing almost every month and we are able to support about 18,000 orders per second. It is a fully scalable platform, so if CBSX decides to invest in increasing the capacity, it’s easily attainable. Our technology team is great and it seems that every time we increase the capacity, we reduce the execution time as a by-product.

We don’t plan any more investments in increasing the execution speed for the time being because most of our customers are very happy with the speed. It all comes back to the fact that, when you’re a new market, you must maintain a very low cost structure because good markets always take time to develop. The point is that it is critical to build your market to meet the needs of the users, and not run out of money in the meantime. That’s why it was so important for us to reach the break-even point at low volumes. That gives us the luxury of focusing on developing a lasting business as opposed to dealing with short-term problems.

Q: Having in mind the volatility of the markets, does your system have the capacity to handle periods with high volumes?

A: Yes. We haven’t used more than 20% of our total matching capacity at any given time, even with the volatilities in August. We are fully utilizing the economies of scale of the CBOE. Even on low volumes, we have a viable business model. We are really focused on developing a market that caters to our niche, leveraging both the staff and the technology of the CBOE to build a sustainable business model on the stock side.

If we were an independent startup exchange, it would be much more diffi cult because it is still a game of economies of scale. The CBOE has achieved economies of scales on the options side, so it is logical to extend to additional products, such as futures and stocks.

Q: Do you plan to expand your strategy towards the futures traders as well?

A: Yes. We do talk with futures exchanges about offerings that would make sense for the futures trader that utlize stock as part of the transaction. But our focus remains servicing the options traders.

We have the advantage that no one may focus on the option traders like CBSX. Also, I’m able to go to the fl oor of the CBOE and talk to our customers every day. Our competitors in the U.S. don’t have the same advantage in servicing this niche. Our users have very easy physical access to us, which is also important. If they have a problem, they know how to reach us. There’s a good communication fl ow that helps on both sides.