Last month, exchange operator Miami International Holdings announced the renaming of its wholly owned subsidiary, Minneapolis Grain Exchange, to MIAX Futures Exchange (MIAX Futures), setting the wheels in motion for a greater foray into the futures markets.
The rebranding follows an ambitious expansion by MIH over the last four years. Headquartered in Princeton, New Jersey, despite the name, it already owns several exchanges in the US, including MIAX, MIAX Pearl, MIAX Pearl Equities, MIAX Emerald, and MIAX Sapphire, the last of which was launched in August this year.
“MIH’s acquisition of MGEX in 2020 marked our entry into the futures industry, and the exchange has served as an important foundation upon which to expand our futures initiatives,” said Thomas Gallagher, chairman and chief executive officer of MIH.
As part of the rebranding, the exchange has renamed its flagship Hard Red Spring Wheat futures and options contracts to the Minneapolis Hard Red Spring Wheat futures and options. Troy Kane, the recently appointed president of MIAX Futures, says the company’s new name reflects the exchange’s ambition to expand beyond agricultural commodities.
“Although MGEX has a successful legacy in the futures industry, the new name reflects our strategy to broaden the range of futures and options products we list on the exchange,” he said.
This expansion will include financial futures products based on equity indexes published by Bloomberg Index Services, including index futures, options on futures and cash options products, which will be exclusively listed and traded on MIAX’s exchanges, subject to regulatory approval.
The company also plans to launch a newly developed technology platform called MIAX Futures Onyx, which is based on proprietary MIAX technology. As a result, the Minneapolis Hard Red Spring Wheat futures will migrate off CME Globex onto Onyx in 2025.
“The new MIAX Futures Onyx matching engine will provide us with a powerful platform to offer innovative agricultural and financial futures products to the marketplace,” Kane added.
The expansion of MIAX’s futures business is just one of many initiatives MIH is undertaking as it looks to build a diversified revenue stream across multiple asset classes. Presently, the company operates the fifteenth largest derivatives exchange group in the world, according to the company website.
In August this year, it launched MIAX Sapphire, its fourth exchange for trading US equity options. All its options exchanges have a distinct allocation and pricing model designed to meet specific client demands.
It also plans to open a physical trading floor in Miami for MIAX Sapphire in the second quarter of next year, offering trading in both old-school open-outcry and modern electronic formats.
“MIAX’s expansion in the US options space has been accomplished entirely through organic growth, and the successful launch of four options exchanges since 2012 is a significant achievement for the company,” said MIH’s Gallagher. “The launch of the MIAX Sapphire electronic exchange is an important first step towards opening our state-of-the-art physical trading floor in Miami in 2025 and further expanding our presence in Florida.”
In the summer of 2024, MIAX secured a $100 million investment from private equity firm Warburg Pincus to provide it with additional funding to outfit the physical trading floor as well as pursue acquisitions in the US and internationally and support the expansion of its agricultural and financial futures business.
Expansion
In October 2022, MIAX acquired Dorman Trading, a Chicago-based futures commission merchant that provides execution and clearing services for introducing brokers, retail customers, institutional clients and professional traders. MIAX said the acquisition will help it grow the products and services it can offer in futures trade execution, listing and clearing. This also marked the first time a derivatives exchange brought a clearing firm in-house.
In other areas, the exchange group last year bought LedgerX, the first-ever approved exchange and clearinghouse for digital currencies in the US, from the now defunct FTX. Renamed to MIAX Derivatives Exchange (MIAXdx), the move represents another important part of the company’s growth strategy, enabling it to expand its presence in the crypto industry and offer new and innovative products to the futures industry.
These recent acquisitions propel MIAX into the realm of becoming a multi-asset exchange operator, enabling it to expand its offerings beyond its flagship US options products to become a prominent presence in the futures industry and beyond.
