International Securities Exchange has launched Gemini, its second options exchange and the 12^th in the U.S.

ISE Managing Director Boris Ilyevsky says the new trading venue is differentiated by offering transaction rebates to liquidity providers and prioritizing orders based on price, rather than prioritizing orders based on price and time.

“We’re the only maker-taker exchange offering pro rata with customer priority,” Ilyevsky told Markets Media. “We believe that’s an attractive differentiator for order-flow providers who are sending order flow to maker-taker markets, as all of them are price-time priority.”

The U.S. Securities and Exchange Commission green-lighted Gemini last week, and the exchange went live on August 5, utilizing nine market makers to match trades on six liquid names including Walt Disney, Texas Instruments, and Dow Chemical. Gemini’s trading volume on Tuesday more than doubled from “a few hundred” contracts on Monday, Ilyevsky said, and market share in its traded names was more than 1%.

The U.S. options-exchange population has steadily increased over the past few years, as Bats Global Markets, Nasdaq, Chicago Board Options Exchange, Miax Options Exchange, and now ISE have launched venues. Market participants note that the more competing exchanges there are, the more difficult it is to truly differentiate.

Gemini has at least a fighting chance of standing out from the pack, according to one investment manager who trades options.

“With all the competition, new exchanges need to differentiate with liquidity or new products,” said Stephen Solaka, managing partner at Los Angeles-based Belmont Capital Group. “With Gemini compensating market makers and larger liquidity providers, the ISE could definitely see a gain in market share with the new model.”

Gemini will offer more differentiated functionality over time, Ilyevsky indicated. For now, Gemini is focusing on the next stages of the rollout, which will include 50 additional names each Monday until mid-September, when the exchange will list 300 names that combined account for about 80% of all U.S. options trading.

“All of our non-transactional fees are waived until the beginning of next year,” Ilyevsky said. “The process of getting members up and running has been extremely smooth – no firms had to connect to anything new. We have 15 market makers registered and ready to go, compared with a total of approximately 25 on ISE. We expect most of the rest to start trading as we roll out additional names.”

“More than 40 order-flow providers have been approved as members of ISE Gemini, and we expect dozens more over the next few months,” Ilyevsky continued. “We’re confident the rollout schedule will go well, at that point the top priority will be to build a business.”