Two weeks after announcing its proposed US$2.3 billion combination with BOX, MEMX is beginning to map out how the enlarged group will integrate its technology, broaden its options offering and support expansion into new products and asset classes.
Jonathan Kellner, chief executive of MEMX, tells TradingTech Insight that the combination will bring together three distinct US options-market models while adding development and operational resources to MEMX’s third-party market-technology business. It comes as MEMX also seeks regulatory approval to enter the growing market for securities-based prediction contracts.
For MEMX, the strategic rationale goes beyond adding volume and scale. Combining its existing price-time options exchange and forthcoming pro-rata venue, MX2 Options, with BOX’s electronic and open-outcry capabilities will give the group access to three distinct US options-market models.“Bringing MEMX and BOX together gives us a much more complete footprint in the options market,” Kellner says. “We have our existing price-time exchange, we’re preparing to launch a pro-rata exchange, and BOX brings a hybrid model combining an electronic marketplace with an open-outcry trading floor. That rounds out our offering and enables clients to interact with different kinds of liquidity across our platforms. As electronic as the markets have become, the floor is still part of the options ecosystem, and there is still client demand for it.”
MEMX plans to begin rolling out MX2 Options on September 14. The customer-priority, pro-rata venue is intended to complement the price-time allocation model used by MEMX Options, giving members a size-based approach to execution and another mechanism for accessing liquidity.
BOX adds a further dimension. Alongside its electronic order book, it operates an open-outcry floor used in part to execute large and complex options trades. Its FLEX open-outcry facility also allows participants to negotiate certain contract terms, including exercise prices and expiration dates.
Together, MEMX and BOX represented approximately 10% of US listed-options volume at the time the transaction was announced. The businesses generated combined revenue of approximately US$280 million and adjusted EBITDA of approximately US$134 million in 2025.
Under the terms of the deal, TMX Group will invest approximately US$800 million and contribute its existing stake in BOX. The Canadian exchange operator will become the majority shareholder in the combined group, with an ownership interest of approximately 59%, while a number of existing MEMX and BOX investors will retain stakes.Kellner will lead the combined business, which will continue to operate independently. Subject to regulatory approval, the transaction is expected to close in the second half of 2027.
Integration and technology consolidation
Although the three options exchanges will retain their separate regulatory licences and market models, MEMX intends eventually to bring the underlying businesses onto a common technology platform.
That will require MEMX to reconcile its own technology architecture with the established systems supporting BOX’s electronic and floor-based markets.
“BOX has operated its own technology for a long time, so the work now is to understand that platform and take the best elements of both technology stacks,” Kellner says. “We’re gaining a substantial technology team and need to determine how best to deploy those resources. Ultimately, the goal will be to unify the businesses on a single platform, but we’re only beginning that work.”
The larger development and operational base is expected to support growth across MEMX’s existing equities and options businesses, as well as potential expansion into additional asset classes. It should also strengthen an increasingly important part of the company: its third-party market-technology operation.
“When we built MEMX, the goal was to create an asset-agnostic platform that could also be delivered to other markets,” Kellner says. “We now license the technology and operate markets for clients, effectively providing markets as a service: we bring the market up, run it and maintain it for the customer. The important point is that this is the same technology we use for our own highly regulated US markets. Clients are looking for stability, consistency and the ability to handle significant volumes in a regulated environment, and that experience has been valuable as we expand the business.”
MEMX technology supports the Blue Ocean overnight alternative trading system, 24X National Exchange and Long-Term Stock Exchange. The company has also signed a memorandum of understanding with Brazilian financial-market infrastructure provider CSD BR to explore launching a second trading venue in Brazil.
Its managed model is designed to allow a new or existing market operator to deploy trading, market data, risk, regulatory and surveillance capabilities without building and maintaining an entire exchange platform internally. For MEMX, the additional personnel and technology gained through BOX could increase its capacity to serve those external clients and pursue opportunities outside the US.
Moving into prediction contracts
At the same time, MEMX is preparing to move beyond conventional listed options. On August 12, it announced that it had filed a proposed rule change with the US Securities and Exchange Commission to list Equities-Based Exchange Prediction Contracts, or EPCs, on MEMX Options.
The proposed contracts would allow investors to take positions on objective financial metrics reported by US-listed companies, including earnings, revenue, product sales and other issuer-specific key performance indicators.
YES and NO positions would be priced between US$0.01 and US$0.99. Because the EPCs would trade as securities on a registered national exchange, investors could access them through familiar brokerage and listed-options infrastructure, with standardised contracts and transparent market pricing.
“Prediction markets have become increasingly popular, but we’ve focused on what we can do within the securities market,” Kellner says. “We think these contracts are distinctive because they could attract both retail and institutional interest. A portfolio manager might want exposure to one segment of a company’s performance, or might want to hedge a particular segment that they understand especially well. These contracts provide a way to do that on a regulated exchange, with central clearing, KYC, market surveillance and the other protections associated with the traditional securities market.”
A contract could, for example, allow participants to trade on whether a technology company’s revenue from a particular product or business segment will exceed a defined threshold. Its market price would provide a continuously updated indication of the probability that participants assign to that outcome.
Unlike prediction-market platforms that permit users to propose events, MEMX will define the eligible companies, metrics, thresholds and settlement terms. The exchange plans to determine the initial product set in consultation with its broker-dealer members, prospective liquidity providers and distributors.
“The contracts won’t be user-defined; they will be defined by MEMX in consultation with our clients,” Kellner says. “We’ll work with broker-dealers, market makers and institutional brokers to understand which companies and which KPIs their clients are interested in trading. We’re currently looking at around 25 companies, with a handful of KPIs for each, although I expect us to start slowly and deliberately. What we list will be driven not simply by what we want to offer, but by where clients see demand and want exposure.”
Interactive Brokers, an investor in BOX that is rolling its interest into the combined group, is working with MEMX on the initiative and expects to make EPCs available to its clients, subject to approval and operational readiness. MEMX is targeting an early 2027 launch.
A developing competitive field
MEMX will not be alone in applying an exchange-traded securities framework to prediction-style products.
Cboe launched its first Cboe Predicts contracts in June 2026, initially offering binary options based on the Mini-S&P 500 Index. It subsequently filed a proposal to list binary options on company KPIs, including earnings per share, revenue and individual business-segment sales for issuers such as Apple, AMD, Alphabet and Amazon. That filing remains subject to the SEC process.
MEMX’s proposal offers an alternative market structure. A participant taking a YES position would buy a contract, while one taking the opposing NO view would sell it, allowing both sides to interact in a single liquidity pool. Cboe’s proposed KPI products use a different options-based structure, providing market participants with distinct approaches to trading views on corporate performance indicators.
The commercial challenge will be establishing sufficient liquidity across a potentially large matrix of companies, financial metrics, thresholds and reporting periods. MEMX plans to address that by beginning with a limited set of widely followed companies and using feedback from brokers and market makers to decide which contracts to introduce.
If approved, the EPC initiative would bring together several strands of MEMX’s expansion strategy: the distribution and liquidity relationships of its exchange members, the larger options footprint created through BOX, and the technology infrastructure needed to launch and operate new market models.
Subscribe to our newsletter
