MarketsMuse options market update courtesy of extract from our friends at MarketsMedia LLC and their profile of yet another proposed options exchange with yet another “rebate” scheme intended to capture market share in the very competitive world of order routing.

International Securities Exchange will have its ISE Mercury exchange ready for trading by the end of the second quarter, though the launch remains subject to approval by the U.S. Securities and Exchange Commission.

New York-based ISE is the ‘s flagship ISE options exchange has market share of about 10.5%, 3rd-most of 12 U.S. options exchanges, while its Gemini exchange, launched in August 2013, has a 3.1% share, according to the OCC.

ISE has said Gemini is differentiated by offering transaction rebates to liquidity providers and prioritizing orders based on price, rather than prioritizing orders based on price and time. Mercury is expected to have its own differentiated market structure, though details have yet to be specified.

“We look at our exchanges as a group because they’re intended to work together,” said ISE Chief Executive Officer Gary Katz. “They address certain segments of the market, and offer pricing to attract different types of customers, whether they be professionals or priority customers. This strategy is working well in a super-competitive environment.

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