The Boston Options Exchange, or BOX, is seeing substantial growth in the past year and a half, spurred on in part by the significant growth seen in the options landscape and by a shift in client base.

“The retail options marketplace has the potential for big growth,” said Tony McCormick, chief executive officer of BOX. “Right now we have 4.5 percent of the market, now that doesn’t seem like much, but the retail space is only 20 to 25 percent of the market. We only do retail, so if you take that, we really have about 15 percent of the market, we have a significant share of that business.”

In focusing on the retail investor, BOX made the decision in mid-2009 to switch to a taker-maker model, whereby takers of liquidity would receive an incentive to participate. The company has also seen an 80 percent year-over-year increase of the use of its Price Improvement Period, or PIP auction system, which helped users save $3.4 million during the month of July alone, and $348 million since its introduction in 2004.

McCormick saw the maker-taker model, which benefits the high frequency firms, as a “non-starter” when he came on board in in late 2009. “It takes a lot of technology to be in that game, it’s like an arms race, it’s expensive. All you can do is offer faster speed, but at some point you run out of speed. Then you sell price, which basically reduces exchange fees to zero, which the market is pretty close to now.”

July saw a 26 percent increase in options contracts traded to 348.2 million, compared to 277.4 million a year earlier, according to the Options Industry Council. Average daily volume during the month was up nearly 32 percent during the same time, to 17.4 million contracts per day.

With the markets as volatile as they’ve been in recent weeks, options trading volume has soared. As of Aug. 19, the average daily volume for the month was 27.3 million contracts, with a single-day high of 42.9 million on Aug. 8, the same day the Chicago Board Options Exchange’s VIX index spiked to a year-to-date high of 48 and the Dow Jones Industrial Average plummeted more than 600 points.

“Volatility drives derivatives,” said McCormick. That’s what these products do, they thrive on volatility. “When you see the VIX move from high teens into the low 40s, that creates a lot of trading opportunities on the derivatives side. I don’t suspect that will change.”