International Securities Exchange
The first fully electronic options exchange in the U.S.
Last updated August 31, 2026
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Overview
The International Securities Exchange (ISE), founded in 2000, was the first fully electronic options exchange in the U.S. and became one of the largest options exchanges. It was acquired by Nasdaq in 2016 and now operates as a subsidiary.
History
The origins of the International Securities Exchange date to 1997, when William A. Porter, chairman of E-Trade, and Marty Averbuch approached David Krell and Gary Katz concerning an electronic options-exchange concept. The group sought to create a U.S. marketplace in which options could be traded through a fully electronic, screen-based system rather than relying primarily on exchange floors and human intermediaries. The resulting company was founded in 2000 and launched the first fully electronic options exchange in the United States. Its structure was designed to automate order routing and execution while supporting competitive quoting and broad electronic access. This made ISE an early example of the technology-driven transformation of U.S. securities markets. Its principal business became the trading of listed equity and index options, with additional activity in ETF-related options, proprietary indexes, and foreign-exchange options. ISE later developed a family of exchange venues, including ISE, ISE Gemini, and ISE Mercury. Alongside trading, it offered market-data products covering options activity, volatility, investor sentiment, and other information used by sophisticated market participants. The combination of exchange operations and analytical data positioned ISE as both a trading venue and a source of derivatives-market information. The company also explored related market infrastructure. In August 2008, the ISE Stock Exchange entered a partnership with Direct Edge, an electronic communication network. The arrangement transferred ownership of the ISE Stock Exchange to Direct Edge while providing ISE with an ownership stake in Direct Edge. In 2013, ISE established ETF Ventures to support the development of exchange-traded-fund and index products. ISE became a subsidiary of Deutsche Börse in 2007. Nasdaq subsequently acquired the exchange in 2016, bringing the ISE options venues into Nasdaq’s broader U.S. derivatives business. The business is a member of the Options Clearing Corporation and the Options Industry Council. In its current form, ISE remains an electronic U.S. options-exchange brand within Nasdaq, with operations centered on listed options, proprietary index products, foreign-exchange options, and related market data.
- 2016
Acquired by Nasdaq
[1]Nasdaq acquired ISE, adding its options exchanges and related capabilities to Nasdaq’s U.S. derivatives business.
- 2013
ISE ETF Ventures introduced
[1]ISE launched ETF Ventures to strengthen its work in exchange-traded-fund and index development.
- 2008
Direct Edge partnership
[1]The ISE Stock Exchange became a wholly owned subsidiary of Direct Edge, while ISE received an ownership interest in Direct Edge.
- 2007
Acquired by Deutsche Börse
[1]ISE became part of Deutsche Börse, expanding the German group’s presence in U.S. options markets.
- 2000
ISE founded and launched
[1]The International Securities Exchange was founded and began operating as the first fully electronic options exchange in the United States.
- 1997
Electronic exchange concept developed
[1]William A. Porter and Marty Averbuch approached David Krell and Gary Katz about creating an electronic U.S. options exchange.
Products and positioning
An electronic, technology-led U.S. options-exchange platform serving professional and institutional market participants through listed derivatives, proprietary index products, foreign-exchange options, and market data.
Options exchange · 2000
ISE
The core ISE venue is an electronic U.S. options exchange offering trading in equity and index options. Its screen-based design was created to automate order handling and support competitive quoting for professional and institutional participants.
Options exchange
ISE Gemini
ISE Gemini is one of the options exchanges operated within the ISE family. It provides an additional venue for listed-options trading within Nasdaq’s U.S. derivatives-market portfolio.
Options exchange
ISE Mercury
ISE Mercury is an ISE-affiliated U.S. options venue. Together with ISE and ISE Gemini, it forms the exchange group’s multi-venue approach to electronic options trading.
Listed derivatives · 2000
Equity and index options
ISE offers options linked to individual equities, exchange-traded funds, and indexes. These contracts give market participants tools for hedging, directional exposure, income strategies, and volatility management.
Currency derivatives
Foreign-exchange options
The exchange has offered options based on foreign-currency pairs, extending its derivatives range beyond equity-linked contracts and serving participants seeking currency-risk or volatility exposure.
Financial market data
Market data and analytics
ISE provides market-data tools related to options activity, investor sentiment, volatility, and other derivatives indicators. These resources are intended for sophisticated investors and professionals analyzing market conditions and trading strategies.
Brand decisions
2013
Launch ISE ETF VenturesProduct launchBackground
ISE increased its emphasis on exchange-traded-fund and index development as part of its broader product strategy.
Action taken
The company introduced ISE ETF Ventures to support ETF and index initiatives.
Aftermath
The initiative broadened ISE’s role beyond operating options venues into the development of index-linked products.
2008
Partner with Direct EdgeM&ABackground
ISE pursued a relationship with Direct Edge, an electronic communication network, to connect its stock-exchange activity with a broader electronic-market infrastructure.
Action taken
The ISE Stock Exchange became a wholly owned subsidiary of Direct Edge, and ISE received an ownership interest in Direct Edge.
Aftermath
The transaction linked ISE’s stock-exchange operations with Direct Edge while retaining ISE’s economic participation in the combined arrangement.
2000
Adopt a fully electronic options-market modelStrategyBackground
The founders sought to modernize U.S. options trading through a screen-based venue rather than a primarily floor-based exchange.
Action taken
ISE launched an electronic exchange with automated order handling and electronic access for options-market participants.
Aftermath
The launch established ISE as an early technology-led U.S. options venue and helped advance electronic trading in listed derivatives.
Recent events
- 2013
ISE introduces ETF Ventures[1]
Product launch
ISE launched ETF Ventures as part of a stronger focus on exchange-traded-fund and index development.
- 2008
ISE Stock Exchange forms partnership with Direct Edge[1]
M&A
The partnership made the ISE Stock Exchange a wholly owned subsidiary of Direct Edge and gave ISE an ownership interest in Direct Edge.
- 2000
International Securities Exchange launches as the first fully electronic U.S. options exchange[1]
Product launch · Other
ISE began operations with an electronic market structure intended to replace or supplement traditional floor-based options trading and provide automated access to listed options.
Sources2 sources
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