Deutsche Borse Snaps Up the ISE: Is a 24 Hour Derivatives Market Next?

The International Securities Exchange (ISE) has agreed to merge with the European futures and options exchange Eurex, in a $2.8 billion deal that will create the largest transatlantic derivatives market.

Eurex’s parents, the Deutsche Borse and the Swiss exchange SWX, offered ISE shareholders a whopping 50 percent premium to their stock’s closing price prior to the merger announcement.

The move is seen at least in part as a response to the recent merger of the NYSE (NYX) and Euronext, who are looking aggressively at the fast-growing derivatives marketplace. The deal grants Eurex entry into the market for U.S. equity options, including index options.

With this deal and the Euronext merger in place, the landscape of derivatives trading going forward is increasingly clear: 24-hour trading is almost a certainty, and borders will become vanishingly important. In fact, Eurex President Andreas Preuss noted during the conference call for the ISE merger that the deal will make Eurex “an even more attractive partner” for other exchanges “in all three time zones.”

Tokyo, Beijing, Mumbai … are you listening?