The International Securities Exchange is opening up a second stock options exchange market. ISE is also looking into a launch of a new larger options contract linked to a popular exchange traded fund.

Consideration of a new exchange is “back on the front burner,” according to ISE Chief Executive Gary Katz. The details such as the launch date or market structure have not been decided, reports Jacob Bunge for The WSJ.

The plan was previously looked at before the merger deal between Deutche Boerse AG and NYSE Euronext was executed and during the ISE introduction of a new technology platform last year. [ETF Spotlight: SPDR S&P 500]

ISE is also interested in bigger sized options contracts linked to the SPDR S&P 500 (NYSEArca: SPY) which will list options on the ISE Max SPY Index, a proprietary measure that represents 10 times the value of the ETF. [S&P 500 ETFs Surpass April 2011 High]

A larger-sized version of the SPY contract to be offered by ISE aims to capture rising interest in options trading among financial institutions, as well as the established use of options on the SPDR ETF. [Big Investors Dial Back from Stock ETFs]

According to the ISE, SPY options have been the most heavily traded options in the U.S., with about two million traded a day in 2012.

Tisha Guerrero contributed to this article.

Full disclosure: Tom Lydon’s clients own SPY.

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