Can a 19^th US options exchange truly add value to the marketplace?

“We asked ourselves the same thing” when mapping out a plan for a new exchange, said John Palmer, Head of Options at IEX Group, in a recent interview with Trader TV.

But with growing complexity in the options market, particularly around stale quotes, increased strikes, and fast-moving prices, IEX Options believes it can deliver solutions that better serve market makers and improve trade execution.

IEX Group was founded in 2012. The firm’s Investors Exchange launched in 2016 and has since increased its market share in US equities to more than 2.5%.

Palmer and Ivan Brown, Executive for Options Business Development at IEX, told Trader TV that the options exchange, set to launch by the first quarter of 2026, will be built around the same technologies that have supported IEX’s growth in equities. Specifically, it will leverage the firm’s proprietary Signal model and its speed bump, which IEX believes can be adapted to address similar challenges in the options market.

“The value here stems from adverse selection and helping market makers mitigate that,” Palmer said. “We’ve been successful in the equities market using the Signal and the speed bump as foundational tools, and now we’re tailoring those practices for the options market.”

Brown described the Signal as a mathematical model based on the Black-Scholes framework, designed to evaluate the relationship between the stock and its associated options. “We employ that in conjunction with the speed bump in order to neutralize the geographic latencies in terms of market data feeds, calculate the Signal, and take action on behalf of market maker quotes.”

Before moving forward, IEX spent several months speaking directly with market participants to validate their approach. “We were encouraged by just the openness of market makers actually walking through how they think about adverse selection and where they see issues,” Brown said. “We were able to take that back and tailor what we’re trying to build to help them as much as possible.”

Palmer noted that the firm has filed a 400-page options rulebook with the SEC and is now focused on building out the technical infrastructure. A detailed project timeline—including industry testing dates, OCC coordination, and participant onboarding milestones—is expected later this year.

Watch the full interview here: Trader TV – John Palmer and Ivan Brown, IEX