Bloomberg reports: Nasdaq Stock Market Inc. may acquire the Philadelphia Stock Exchange to expand in options trading after losing the race to create the first trans-Atlantic equity market, an official at the Philadelphia exchange said.
The closely held Philadelphia exchange, which controls about 13 percent of all options traded in the U.S., also has approached other markets and is considering an initial public offering, said the official, who declined to be identified because the discussions are private. An agreement with Nasdaq is weeks away at the earliest and may not be reached, the official said.
Nasdaq Chief Executive Officer Robert Greifeld planned to begin trading options in the third quarter, tapping a market that’s growing more than twice as fast as stocks. Buying the nation’s No. 3 options exchange could give Nasdaq an advantage over NYSE Euronext, the company formed last week when NYSE Group Inc. acquired Paris-based EuronextNV.
“It’s a build versus buy decision at Nasdaq,” said Rich Repetto, an analyst at New York-based Sandler O’Neill & Partners, who has a “buy” rating on the stock. “While it’s yet to be proven, there’s a lot of optimism in trading multiple asset classes on an exchange – namely equities and options.”
Nasdaq spokeswoman Bethany Sherman declined to comment on the discussions, which were reported late Monday by the Wall Street Journal. Nasdaq and the Philadelphia exchange agreed to merger terms in 1998 before breaking off the planned combination the following year.