NEW YORK (AP) -- The Chicago Board Options Exchange filed for an initial public offering of up to $300 million as it converts from a member-owned organization to a publicly traded corporation.
The Chicago company, CBOE Holdings Inc., did not say when it plans to go public or how many shares it hopes to sell.
CBOE, the largest options exchange in the U.S., has wanted to go public for a long time. It settled a dispute over payment for ownership with the CME Group Inc., which operates the Chicago Mercantile Exchange and the Chicago Board of Trade, in August 2008, clearing the way for an IPO.
Options are a type of derivative, a financial instrument whose value depends on an underlying asset, such as a stock. They can help hedge risks but have come under fire recently from European politicians who accuse speculators of worsening debt problems in Greece and other countries. U.S. regulators have pushed for more oversight of the trading of derivatives.
CBOE was the world's first marketplace for options, founded in 1973. Its daily trading volume exploded over the past decade, with 1.13 billion contracts traded in 2009, as technology helped reduce costs and hedge funds and other money managers increasingly traded in derivatives and other new financial instruments.
Daily trading volume last year was 4.5 million contracts a day, down slightly from 4.7 million in 2008 as the recession bit into trading activity. In 2007, daily trading volume was 3.8 million.
Even as trading of derivatives has jumped, the Securities and Exchange Commission and the Obama administration have proposed measures regulating the trading of financial instruments that could hurt CBOE's revenue.
New rules on short selling which take effect in May 2010, the proposed ban of "flash orders," which give investors a split-second edge in trading and other legislation related to reform of financial regulation that impacts traders' behavior could have a "material adverse affect" on the business, CBOE said.
The company is also facing increasing competition from other exchanges. Its share of options traded in the U.S. fell to 31 percent last year from 45 percent in 2000.
It is launching C2, an all-electronic market later this year to build its trading platform and plans to introduce more products.
It also hopes to capitalize on proposed regulation. The push for investors to move from unlisted, "over the counter" trading to more visible trading on exchanges could boost its business, CBOE said.
CBOE says it plans to pay a yearly dividend of 20 to 30 percent of adjusted income from the previous year.
In 2009, the company earned $106.5 million, down from $115.3 million the previous year. In the past five years, however, net income has grown nearly tenfold.
Revenue in 2009 rose 2 percent to $426 million from $416.8 million.
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