Miami International Holdings: Technology Moat Drives 1,100 Basis Points of Market Share Gains Since 2016
Morgan Stanley US Financials Conference, June 9, 2026
Miami International Holdings is approaching its first anniversary as a public company with a clear value proposition: latency advantages that matter most when markets get volatile. Speaking at Morgan Stanley's US Financials Conference, Chairman and CEO Tom Gallagher and CFO Lance Emmons laid out a compelling case for sustained market share gains driven by technology differentiation that competitors are finding difficult to replicate.
Technology Advantage Manifests During Market Stress
The core of MIAX's competitive position centers on what Gallagher calls "speed, throughput and determinism consistently day in and day out." The company has captured 1,100 basis points of market share growth from the first quarter of 2016 through the first quarter of 2026, reaching approximately 17% market share in multi-listed options. More striking is the nature of that advantage. MIAX maintains 18 microsecond latency for quote cancellations under normal conditions, but the real differentiation emerges during volatility. At the 99.99th percentile during extreme market stress, MIAX latency increases by roughly 2x while competitors see degradation of 50x or more.
Gallagher explained the practical impact with a vivid analogy: "You're a pilot flying into Logan Airport on Thanksgiving Eve and you're one of 20 planes in the queue. And it's foggy out. You're 1,000 feet away from the runway and you ask for some guidance and coordinates and you don't hear anything back. Why don't you hear anything back? You don't hear anything back because the tower is overwhelmed." That tower, in market structure terms, is a matching engine that cannot acknowledge quote cancellations quickly enough, leaving market makers exposed to adverse selection when their prices go stale.
The importance of this advantage will be tested immediately. With SpaceX expected to IPO later this week or early next week, followed by Anthropic and OpenAI, MIAX expects to capture outsized market share in what will be highly volatile retail-driven names. The company already over-indexes by one to three points in the most active names, and Emmons noted that stocks like NVIDIA and Tesla currently represent four to six percent of industry volume. If SpaceX follows a similar pattern, the upcoming IPO wave could provide meaningful volume tailwinds, with options available for trading the Tuesday following Friday's expected IPO.
First Quarter Performance Demonstrates Operating Leverage
The financial results underscore the operating leverage in the model. First quarter net revenues grew 40% year-over-year, while adjusted EBITDA surged 66% to $66 million. Margins exceeded 50% for the first time, expanding 800 basis points. Average daily volume grew 27% compared to 17% industry growth, meaning MIAX grew 60% faster than the overall market. The company reported results for its third quarter as a public company, having completed its IPO in mid-2025.
Structural Tailwinds Support Multi-Year Growth Outlook
Beyond cyclical volatility, management pointed to several structural drivers that should sustain industry growth. At the SEC's options roundtable, the first in nearly 20 years, data from the Consolidated Audit Trail revealed that approximately 70 million unique customer IDs trade equities, but only five million trade options. Emmons views this penetration gap as evidence that growth is not purely cyclical.
The generational wealth transfer from baby boomers represents another sustained tailwind. Gallagher expects this transfer over the next nine to ten years to fuel dramatic growth in retail futures, similar to what occurred in retail options 20 years ago. The zero-commission model pioneered by firms like Robinhood coincided with the pandemic and helped drive industry volumes from 20 million contracts daily to 65 million to 70 million currently. Structured products with embedded options, including leveraged ETFs and options on those ETFs, provide additional volume drivers.
Zero-DTE Expansion Proceeding Cautiously
The industry rolled out short-dated Monday and Wednesday expiries on nine single-name symbols in January 2026, complementing the existing Friday expiries. MIAX is capturing an outsized market share in these expirations, and importantly, management believes the volume has been additive rather than cannibalistic. However, with less than six months of data, Gallagher believes the industry needs another three to four months before adding more symbols or additional expiry days.
An exchange proposal filed this week would add Tuesday and Thursday expiries to two ETFs, which Emmons noted are easier to implement than single names because ETFs lack earnings announcements. The proposal would also add two additional ETFs to the program. The industry's cautious approach reflects concern for customer protection, particularly around avoiding automatic exercises on earnings-related moves.
Perpetual Futures Viewed as Regulatory Overreach
On the controversial topic of perpetual futures, Gallagher took a notably skeptical stance. While CFTC allowed Kalshi to launch perpetual futures on Bitcoin, Gallagher believes this represents regulatory overreach and that expansion beyond crypto faces significant hurdles. "When you look at the legislation that governs futures products, I don't often agree with Terry, but I agree with him wholeheartedly in his approach that this seems to be an illegal act," he said, referring to what he views as products that have been heretofore prohibited in the U.S.
For MIAX, the immediate impact is limited. The company's futures business launched with Hard Red Spring Wheat, an institutional agricultural commodity product serving hedging needs of elevator operators, farmers and co-ops. Perpetual contracts make little sense for physical commodities that are actually consumed. Gallagher expressed concern that expanding perps to retail products beyond crypto could create devastating losses for inexperienced investors, potentially damaging an industry that has grown from 10 million or 11 million contracts 10 to 15 years ago to 65 million through careful guardrails.
That said, if a reputable member firm approaches with a compelling use case, management would evaluate it. Emmons noted that MIAX has the technology and licenses to bring perps to market if member demand materializes and regulation permits, but the company sees no need to lead on this product innovation.
Market Share Strategy Shifts from Growth to Quality
With market share now at 17%, MIAX is pivoting from pure share gains to optimizing revenue capture per contract. Gallagher was explicit about this strategic shift: "For the first 10 years, the rocket fuel for an exchange is market share. If you're not five, six, seven percent in Tesla, no one is going to connect to your exchange. When you start to become 10%, 12%, 15%, 18% of a symbol, then people are calling me up." The first decade involved aggressive tactics including low or zero fees and equity rights programs offering deep equity stakes in the parent company for volume commitments.
Now, as a public company, management is more selective. When potential partners offer two points of additional market share but require payment of two cents per contract, Gallagher declines. "I'm not going to chase that. I'm going to tell my sales guys we don't need that." The focus is on higher-quality, more profitable volume.
Several opportunities exist to gain share in attractive segments. The Miami trading floor, which opened only in September and represents just the second trading floor opening in U.S. history, currently captures just 0.4% to 0.5% market share. Yet floor trading still represents six to eight percent of multi-listed volume on any given day. Management sees potential to capture well above its one-sixth market share through new functionality, incentive pricing and additional floor members. The company ranks second nationally in complex order functionality, which Gallagher calls "good capture business," and plans additional functionality rollouts.
Risk protection settings also present opportunity. In the first nine months of operating exchanges, MIAX maintained conservative risk parameters. Some market participants cannot send large orders because position limits are set too low for their needs. As the platforms mature, selectively adjusting these parameters for appropriate counterparties could unlock new customer segments without compromising the overall risk framework.
Futures Business Targets Disruptive Competition
The futures business represents MIAX's most ambitious expansion. Success, in Gallagher's view, would mean becoming "the first exchange operator to really make inroads so that the futures industry is not subject to only one dominant market participant as they have been for the last 20 to 25 years." The company is showing up with both the chicken and the egg: a brand-new On-X platform that management claims is five times faster than competition, combined with disruptive aggressive pricing that monopolistic competitors never needed to deploy.
The infrastructure investment is largely complete. MIAX has built data centers in Chicago for commodities and Secaucus for financial products, and has migrated off the CME Globex platform. Emmons emphasized that every dollar of revenue generated now flows through at very high incremental margins, and over time, futures margins should approach the company's options business margins, which now exceed 50%.
Since launching on May 17, 2026, the Bloomberg 100 and Bloomberg 500 futures products have averaged approximately 13,000 contracts daily with three market makers providing tight, liquid markets. Management characterizes the execution as flawless across three product launches. The strategy begins with retail, leveraging aggressive pricing to attract retail firms focused on low execution costs. By year-end, Gallagher expects five major retail brokerages to be fully engaged. The institutional adoption will take longer, and MIAX plans to lean into its Bloomberg partnership to drive that penetration.
The futures roadmap includes launching the first new grain products in years during the fourth quarter, driven by customer demand. More significantly, next year MIAX plans to launch options on SEC-regulated exchanges for the Bloomberg 100, Bloomberg 500 and other financial futures products. These will be proprietary, similar to VIX options, meaning the only place to trade B100 options will be on a MIAX exchange. This creates a sustainable competitive moat beyond multi-listed products.
International Expansion Provides Long-Term Differentiation
Looking five years ahead, Gallagher believes investors will be most surprised by MIAX becoming "the first truly global exchange operator that can honestly say that we grew internationally, not to just grow revenues in an uncorrelated way, but we thoughtfully became one of the first truly global exchange operators." The company started with Bermuda, moved to the Channel Islands in Guernsey, and views these smaller venues not as minor leagues but as respected jurisdictions with strong regulatory regimes where new concepts can be tested before broader rollout.
The path from options exchange startup in 2012 to diversified global operator reflects what Gallagher calls "a culture of commitment to its employees" that should sustain continued growth and expansion. With the technology platform built, licenses secured, and Bloomberg partnership in place, MIAX appears positioned to leverage its core competency in low-latency execution across multiple asset classes and geographies.