Chicago Board Options Exchange profit fell 21% last quarter as CEO William Brodsky plowed money into developing an all-electronic trading outpost even as volume dropped on the CBOE’s existing platform.
Net income dropped to $24.3 million in the first quarter, from $30.6 million a year earlier, the CBOE said in a memo to members Friday.
Revenue fell 5% to $98.6 million, after 12 straight quarters of double-digit gains, as trading declined 3%. Expenses rose 13% to $58.2 million, driven largely by investments in the CBOE’s planned electronic exchange in New York as well as payments to traders rewarding them for doing business at the CBOE.
Mr. Brodsky is building a separate all-electronic market called C2 that will cater to rapid-fire large-volume traders in a bid to further cement the CBOE’s place as the nation’s leading stock-options market. Meanwhile, the recession has dampened trading at the CBOE, which offers a mix of electronic and face-to-face trading.
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