Philadelphia Stock Exchange
|Philadelphia Stock Exchange|
|Key People||Christopher R. Concannon, CEO; Thomas A. Wittman, President; Adam Nunes, Executive Vice President|
|Products||Cash equities, options and currencies|
The Philadelphia Stock Exchange (PHLX or Phil-Ex) was the oldest U.S. stock exchange, the third-largest options market in the U.S. and the world's 12th-largest derivatives platform by volume shortly before it was acquired by Nasdaq in July 2008 in a $652 million cash sale. 
NASDAQ OMX PHLX was formed in July of 2008 when the NASDAQ OMX Group took over the Philadelphia Stock Exchange. The Philadelphia exchange didn't go away completely. NASDAQ kept its options-trading center. The Philly exchange had electronically listed more than 7,000 stocks, more than 2,500 equity options, 17 index options, and multiple currency pairs.
After World War II, the Philadelphia Stock Exchange began to reach out beyond Philadelphia. Philadelphia merged with the Baltimore Stock Exchange in 1949, and with the Washington Stock Exchange in 1953. Through associate membership agreements, Philadelphia expanded its trading base to Pittsburgh, Boston and Montreal.
Philadelphia was among the first exchanges to catch the wave of electronic trading. In 1975, the Philadelphia Stock Exchange introduced an order routing and execution system for stocks called PACE (Philadelphia Automated Communication and Execution system). It was a computer-to-computer system that provided electronic execution of stock orders instantly. Brokers could use the system to buy or sell any of the most actively traded stocks in the United States, while receiving the best quoted price on any of the U.S. exchanges.
By April, 1988, the exchange utilized the electronic trading technology first used on the equity floor to build a new system to accommodate options trading. The Automated Options Market (AUTOM) system allowed electronic delivery of options orders from member firms to the exchange floor, automatic execution of certain orders and electronic confirmation of execution.
The Philadelphia Stock Exchange began offering currency options in 1982, and by 1988, the options were trading in volumes as high as $4 billion per day in underlying value. Buoyed by the success of currency options, the Philadelphia Board of Trade (PBOT) was established in 1985 to trade currency futures and other futures products.
The Philadelphia Stock Exchange became the first floor-based stock exchange to transform its structure from that of a seat-based, cooperative institution to a share-based for-profit company in January 2004.
Its business in recent years was driven by stock options. Index options, stocks and currency products were also listed. PHLX recently hired bankers to pursue a potential acquisition or initial public stock offering. That was achieved in November 2007 as NASDAQ announced its agreement to purchase PHLX.
The PHLX's Gold/Silver Sector (XAU) is the most actively traded, industry-based index option offered by any exchange, serving as a widely quoted benchmark of the gold and silver mining industry. Similarly, the PHLX's Oil Service Sector (OSX), Semiconductor Sector (SOX), KBW Bank Index (BKX) and Utility Sector (UTY) are well-established as leading industry indicators.
On Nov. 7, 2007, NASDAQ announced that it had entered into a definitive agreement to acquire the Philadelphia Stock Exchange (PHLX), with the purpose of significantly diversifying NASDAQ’s product portfolio by providing NASDAQ with an option trading platform. Under the terms of the agreement, NASDAQ would pay $652 million in cash consideration for the capital stock of the Philadelphia Stock Exchange. The board of directors of each company unanimously approved the transaction and it is subject to other customary approvals. The transaction closed in the first quarter of 2008 to become accretive to 2009 earnings.
- Smoke forces halt of trading at Nasdaq's options floor in Philadelphia. LA Times.
- Philadelphia Exchange Takes Stock of its History. The Philadelphia Inquirer.
- The Philly Stock Exchange and the Death of America’s Cities. WSJ.com.
- The Philly Stock Exchange and the Death of America’s Cities. The Wall Street Journal.
- Update: Nasdaq Resumes Trading. The Wall Street Journal.
- History. PHLX.
- "NASDAQ to Acquire Philadelphia Stock Exchange". NASDAQ.