CBOE’s Q2 profit up 11%

The Chicago Board Options Exchange said on Thursday second-quarter net income rose 11 percent as increased trading helped offset higher costs.

The largest U.S. options exchange, which has been operating as a for-profit model since January 2006, said quarterly revenue was up 12 percent to $109.4 million from $97.6 million a year ago as trading volume rose 8 percent.

"CBOE 's top strategic priority remains building the strong fundamentals of our core business, and we are totally focused on investing prudently in growth initiatives that leverage CBOE 's existing infrastructure and expertise," Chairman and Chief Executive William Brodsky said in a statement.

Quarterly expenses were up 15 percent to $61.9 million compared with $53.7 million a year ago.

Net income for the second-quarter ending June 30, rose to $28.1 million from $25.4 million a year earlier. Before taxes, the profit was $47.5 million, compared with $43.9 million a year ago, the exchange said.

Options trading volume for the quarter rose to 296.9 million contracts up from 275.2 million last year.

CBOE said the increase in quarterly revenues was mainly due to a $9.6 million gain related to other member fees. This included $8.3 million in temporary member access fees and a $4.2 million increase in volume-related transaction fees.

Former Chicago Board of Trade members who are now part of CME Group Inc., who continue to have trading rights on the CBOE , were assessed access fees for the first 6 months of 2009.

The CBOE may be best known as the home of the Volatility Index or VIX , which is Wall Street's favorite gauge of investor sentiment. The VIX often rises when the benchmark Standard & Poor's 500 Index declines.

In addition to options on stocks, indexes and exchange-traded funds, other products offered on the CBOE include interest-rate options on the yield of U.S. Treasury bills, notes and bonds.

Last October, CBOE announced plans to launch an electronic options platform called C2 to attract new customers.

CBOE previously indicated that C2 expenditures would be about $25 million. The alternative exchange, expected to be launched this year, would complement CBOE's hybrid platform, which features both electronic and open auction trade.