2010 Annual Report
  • Chairman Letter
  • Market Leadership
  • Unique Products
  • Trading Technology
  • Industry Advocacy
  • CBOE Holdings
  • Financial Report
CBOE Holdings, Inc.:


C2 Options Exchange


C2 Options Exchange, Incorporated (C2) is CBOE Holdings’ newest all-electronic exchange and the second options exchange under the CBOE Holdings corporate umbrella. C2 is a wholly-owned subsidiary of CBOE Holdings and operates under a separate exchange license, with its own rules, connectivity, systems architecture and access structure.

The launch of C2 delivers three key benefits to the Company. One, C2 extends CBOE’s customer reach beyond its traditional Hybrid Trading System. The all-electronic nature of C2 enables CBOE Holdings to compete head-to-head with the industry’s growing number of maker-taker market models. Two, C2 may retain order flow currently routed away from CBOE’s Hybrid to other exchanges because of industry linkage requirements. And three, C2 positions our Company to attract incremental volume from other exchanges by virtue of a differentiated market model and fee schedule.



C2 was launched successfully on October 29, 2010. In a nod to nostalgia, many of the first classes to be listed on C2—Ford, Merck, McDonald’s, Texas Instruments and Xerox—were some of the same classes originally listed at CBOE for its first day of trading in April 1973. On C2’s first day of trading, volume totaled 654 contracts.

In the ensuing weeks, C2 deployed a measured rollout that included the most active, multiply-listed classes in the Penny Pilot program. By year’s end, options on 356 stocks and ETFs were available for trading at C2, representing 81 percent of the industry’s total volume. In its first two full months, trading volume at C2 registered 3.6 million contracts. In December, average daily volume was 111,038 contracts, and 2011 year-to-date, ADV was approximately 155,000 contracts through February.

The goal for C2 in the fourth quarter of 2010 was straightforward: to execute a successful rollout of multiply-listed classes on C2 in order to provide customers with the flexibility of a competing CBOE market model and cost structure. The performance of C2’s trading systems and market model exceeded initial expectations and feedback from the user community to-date has been overwhelmingly positive.

A major goal for C2 in the upcoming year will be the listing of an electronic S&P 500 Index option (SPX) product in the first half of 2011. The electronic version of the SPX index option will be identical in structure to CBOE’s traditional SPX index option product, except the new electronic product will have “p.m.” settlement. The new product will broaden CBOE’s customer reach by providing a “point-and-click” version of its most actively traded index product, with a settlement convention found in the Over-The-Counter (OTC) market.


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C2 Total Options Volume
In Millions

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