Philadelphia, American Exchanges to Merge

The American Stock Exchange solidified its position as a leader in financial options trading by reaching an agreement in principle to merge with the Philadelphia Stock Exchange. The AMEX said in a joint statement with the Philadelphia exchange that Philadelphia’s board of governors had voted to accept its offer over a rival bid from the Chicago Board Options Exchange. The proposed merger would likely bolster AMEX’s position as the second-largest options exchange in the country after the CBOE and give it control over trading in the prized options of Dell Computer Corp. The AMEX scrambled to present its offer as the Philadelphia’s board of governors met to vote on the CBOE’s competing bid. The AMEX had only approved a draft of its bid, according to a spokesman. The CBOE declined to comment on the agreement. The Philadelphia exchange has 8% of the U.S. options market, making it the nation’s fourth-largest behind the CBOE, Amex and Pacific exchanges. Members of both exchanges and the SEC must approve the combination. Options are contracts that give holders the right to buy or sell something at a predetermined price within a certain time.