NYSE Arca Adopts License Fee For iShares Russell Options

NYSE Arca last week began charging market makers and brokerages a license fee--or royalty fee--for trading options on the popular iShares ETFs tracking six Russell indexes.

NYSE Arca last week began charging market makers and brokerages a license fee--or royalty fee--for trading options on the popular iShares ETFs tracking six Russell indexes. The fee is five cents per contract, and is being charged in addition to the 26-cent execution fee. Competing exchanges charge up to 45 cents for trading these options, so NYSE Arca is still a bargain despite the new fees, traders said. Options on the Russell ETFs are among the top-ten traded options classes on all exchanges, trading several million contracts each month. NYSE Arca wants traders to share the cost of licensing fees the exchange pays to Russell for listing the options to offset expenses. Spokeswomen for both companies declined to discuss fees NYSE Arca pays to Russell for licensing.