Top 3 Current Projects

Penny Quoting

Objective:

Options is our biggest business right now and our biggest money maker, so we're making sure we have the capacity and infrastructure, as well as the strategy, in place to compete in a penny-quoting options environment.

Electronic Equity Trading

Objective:

We're in the process of building a brand-new electronic equity trading system. It's going to have the functionality of what you would see in the ECNs out there today, and it's going to position the exchange to compete in the equity markets.

PBOT XL Initiative

Objective:

Building a totally electronic futures platform. We're going to be introducing some very exciting futures products and trading them electronically.

2007 Initiatives

PHLX XL

We will continue to evolve the PHLX XL program for options as competition demands, and add enhancements to go after certain types of business. We'll continue to grow the capacity and make sure the applications and infrastructure are ready to compete. As an industry, we do more than 1 billion quotes a day through the OPRA system, of which more than 380 million messages are done in Philadelphia. We'll also tweak some applications to introduce new features.

Enhance Equity and Futures Platforms

When it comes to the equities business, with the initial product due to launch this year, we'll be adding Day 2 features designed to grow that business. We'll be doing the same with PBOT XL as we talk and learn from customers.

Vitals

IT Budget:

In excess of $45 million; that's supporting four businesses: options, equities, futures and the clearing services business for the equity program.

Key Technology Management:

• Tom Wittman, SVP of Development,
• Frank Ziegler, VP of Communications,
• Bernie Donnelly, VP of Quality Assurance and Quality Control,
• Frank Reidy, VP of Data Center Operations in IS,
• Rich Ward, Director of Technical Services,
• Al Pomerantz, Director, Chief Data Security Officer,
• Bruce Smith, VP, Technical Consulting,
• Bill Terrell, First VP, Market Operations

Size of Technology Team:

228, including market operations.

Percent of IT Projects Outsourced:

We hardly outsource anything because this is a very customized business. We can't go out and buy a trading system somewhere; we pretty much have to build what is deployed here. We save money by being masters of our own destiny.

Key Technology Partners:

Stratus, Sun as well as Nortel and soon, Juniper and IBM. The most important are Stratus, Sun and Nortel -- I consider them partners because they are vital to our day-to-day operations.

Success Metrics:

Return on investment. For us, ROI means setting clear business objectives and asking, Has a project met our business objectives, and has it increased our market share? PHLX XL is a perfect example. When you look at the money we spent on that program and you look at the increase in our market share, there's no question this is a project that has changed the way we do business.