ISE Intl Secs Exchange Hldgs

The International Securities Exchange (NYSE:ISE) today reported that average daily trading volume for equity and index options contracts for June 2006 increased 44.6% to 2.2 million contracts as compared to 1.5 million contracts during the same period in 2005. Total equity and index options volume for the month increased 44.6% to 48.6 million contracts from 33.6 million contracts in the same year-ago period. On a year-to-date basis, average daily trading volume of equity and index options increased 43.2% to 2.4 million contracts traded as compared to 1.7 million contracts traded in the prior year. Total equity and index volume through June 2006 increased 43.2% to 299.5 million contracts from 209.1 million contracts in the same period last year. We continued to witness trading activity related to dividend trades among options market makers on certain other exchanges. These trades have minimal profitability impact, if any, and only serve to temporarily inflate and distort trading volume and market share when transacted. Dividend trades are typically effected in order to profit from the oversight or misunderstanding of certain retail investors who neglect to exercise their call options prior to a stock going ex-dividend. ISE does not provide a marketplace for dividend trades. If the volume from the largest dividend trades were excluded from the data, our market share of equity options for the month of June would increase to 31.9% from 31.6%, an increase of 0.3 market share points. On a year-to-date basis, our market share would increase to 33.4% from 32.3%, an increase of 1.1 market share points, if the volume from the largest dividend trades were excluded. The exclusion of dividend trades from total industry volume data presents a more relevant measure of the relative trends in our business. -0- *T Equity and Index Options Volume Statistics Current Month (000s) Jun-06 Jun-05 % Change ---------------------------------------------------------------------- ISE Average Daily Volume 2,208.5 1,527.2 44.6% ISE Total Volume 48,587.8 33,598.2 44.6% Industry Average Daily Volume 7,760.9 5,189.2 49.6% Market Share 28.5% 29.4% (0.9) pts ---------------------------------------------------------------------- Market Share: Customer 28.3% 29.9% (1.6) pts Market Share: Firm 25.3% 20.7% 4.6 pts Market Share: Market Maker 29.7% 31.5% (1.8) pts ---------------------------------------------------------------------- Year-to-Date (000s) Jun-06 Jun-05 % Change ---------------------------------------------------------------------- ISE Average Daily Volume 2,396.2 1,672.9 43.2% ISE Total Volume 299,520.3 209,109.4 43.2% Industry Average Daily Volume 8,060.7 5,566.4 44.8% Market Share 29.7% 30.1% (0.3) pts ---------------------------------------------------------------------- Market Share: Customer 30.6% 30.3% 0.3 pts Market Share: Firm 25.7% 21.0% 4.7 pts Market Share: Market Maker 30.2% 32.3% (2.1) pts ---------------------------------------------------------------------- Equity Options Volume Statistics Current Month (000s) Jun-06 Jun-05 % Change ---------------------------------------------------------------------- ISE Average Daily Volume 2,170.1 1,504.6 44.2% ISE Total Volume 47,742.0 33,101.8 44.2% Industry Average Daily Volume 6,876.0 4,698.9 46.3% Market Share 31.6% 32.0% (0.5) pts ---------------------------------------------------------------------- Market Share: Customer 31.1% 32.2% (1.1) pts Market Share: Firm 28.7% 23.6% 5.1 pts Market Share: Market Maker 32.9% 34.2% (1.3) pts ---------------------------------------------------------------------- Year-to-Date (000s) Jun-06 Jun-05 % Change ---------------------------------------------------------------------- ISE Average Daily Volume 2,364.2 1,660.8 42.3% ISE Total Volume 295,526.5 207,606.2 42.3% Industry Average Daily Volume 7,331.9 5,069.5 44.6% Market Share 32.3% 32.8% (0.5) pts ---------------------------------------------------------------------- Market Share: Customer 32.9% 32.6% 0.3 pts Market Share: Firm 28.6% 23.7% 4.9 pts Market Share: Market Maker 32.7% 35.3% (2.6) pts ---------------------------------------------------------------------- Index Options Volume Statistics Current Month (000s) Jun-06 Jun-05 % Change ---------------------------------------------------------------------- ISE Average Daily Volume 38.4 22.6 70.4% ISE Total Volume 845.8 496.4 70.4% Industry Average Daily Volume 884.9 490.3 80.5% Market Share 4.3% 4.6% (0.3) pts ---------------------------------------------------------------------- Year-to-Date (000s) Jun-06 Jun-05 % Change ---------------------------------------------------------------------- ISE Average Daily Volume 32.0 12.0 165.7% ISE Total Volume 3,993.8 1,503.2 165.7% Industry Average Daily Volume 728.8 496.9 46.7% Market Share 4.4% 2.4% 2.0 pts ---------------------------------------------------------------------- *T Monthly Highlights -- ISE was the largest U.S. equity options exchange in June. -- On June 19, 2006, the United States Court of Appeals for the Second Circuit unanimously affirmed the ruling of the United States District Court for the Southern District of New York which dismissed the complaints of Dow Jones & Company, Inc. and Standard & Poor's, a division of the McGraw-Hill Companies, Inc., against ISE and The Options Clearing Corporation ("OCC") pertaining to ISE's decision to trade SPDRs(R) DIAMONDS(R) without a license. The Court of Appeals affirmed ISE's ability to trade options on exchange traded funds without a license. It ruled that ISE's creating, listing, trading, and clearing of options on the shares of exchange traded funds that track the performance of stock market indexes does not constitute misappropriation of the stock market index owners' intellectual property or unfair competition, and that ISE's use of the SPDR(R) and DIAMONDS(R) trademarks in listing those options does not constitute trademark infringement or dilution. The Court of Appeals found that the allegations of Dow Jones and S&P were "legally insufficient." -- ISE traded more volume in 648 of 915 issues in its listings than any other options exchange. ISE Background The International Securities Exchange (ISE) is an innovative securities market, founded on the principle that technology and competition create better, more efficient markets for investors. ISE is the largest equity options exchange and is among the leading options exchanges in the world. ISE developed a unique market structure for advanced screen-based trading systems and in May 2000 launched the first fully electronic US options exchange. The ISE Stock Exchange LLC will launch in the third quarter of 2006 with strategic partners, offering an innovative MidPoint Match platform, followed by a fully integrated displayed Best Bid Offer (BBO) market in the fourth quarter. ISE is also a majority owner of Longitude LLC, an innovative platform for events markets trading, and offers enhanced market data products for sophisticated investors. ISE continually enhances its trading systems and develops new products, including index options and market data, to provide investors with the best marketplace and investment tools to trade smarter. For more information about ISE, its options products and its technology, visit www.iseoptions.com and for more information about the ISE Stock Exchange LLC, visit www.isestock.com. Certain matters discussed in this press release are "forward looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements, to be materially different from those contemplated by the forward looking statements. We undertake no ongoing obligation, other than that imposed by law, to update these statements. Factors that could affect our results, levels of activity, performance or achievements and cause them to materially differ from those contained in the forward looking statements can be found in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, current reports on Form 8-K and quarterly reports on Form 10-Q.