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MIAX to Debut Historic Pit Trading Alongside Electronic Venue in Miami

Published Nov 28, 2023 11:38AM ET Updated Nov 28, 2023 12:01PM ET
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© Reuters. MIAX to Debut Historic Pit Trading Alongside Electronic Venue in Miami

Quiver Quantitative - The burgeoning options trading market is about to get an infusion of old-school flair with MIAX’s introduction of a new trading floor in Miami's trendy Wynwood district. MIAX, short for Miami International Holdings Inc., is constructing a combined electronic and physical trading venue, with a 38,400-square-foot space dedicated to options pit trading, reminiscent of the pre-digital era. The move heralds a nod to traditional trading practices, even as electronic trading dominates the industry, offering a unique blend of the old and the new.

MIAX’s decision to establish a physical presence in Miami aligns with a resurgence in options trading, a market that has seen volumes more than double since 2019. The electronic portion of the new MIAX Sapphire exchange is slated for a Q2 2024 launch, while the open-outcry floor will become operational later in the year. This dual approach allows MIAX to cater to modern electronic traders while also facilitating complex orders that may benefit from the hands-on, open outcry method. The approach mirrors that of established venues like the New York Stock Exchange, which continues to operate its iconic trading floor, and CBOE Global Markets, which embraced its Chicago roots with a revamped floor blending electronic and pit trading in 2022.

MIAX's move comes amid a significant rise in options trading, spurred in part by the same forces that have driven interest in digital assets and meme stocks. With record volumes reported by MIAX’s existing options exchanges, the new MIAX Sapphire exchange, underpinned by a data center in Secaucus, New Jersey, will employ a taker-maker fee model. The physical trading floor, the first for MIAX’s fourth options exchange, is still finalizing its fee structure. The Wynwood location, known for its vibrant art scene and rapid development, signifies the merging of Miami's innovative culture with the high-stakes world of finance.

The initiative is not just about reviving the ambiance of traditional trading; MIAX plans to transform the space into a broadcasting hub, offering live views of market action, much like NYSE and CBOE. With an SEC approval pending for the new exchange, MIAX anticipates a modest but critical team of around ten employees to oversee the Miami operations. As MIAX gears up for the grand opening next year, the industry watches to see how this blend of tradition and technology will impact the options trading landscape.

This article was originally published on Quiver Quantitative

MIAX to Debut Historic Pit Trading Alongside Electronic Venue in Miami
 

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