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3Q earnings at CBOE fall 16 percent

ActiS P pit Chicago Board Options Exchange which was near record highs.  | Al Podgorski~Chicago Sun-Times

Action in the S&P pit at the Chicago Board Options Exchange which was at near record highs. | Al Podgorski~Chicago Sun-Times

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Updated: December 3, 2012 6:35AM

The company that owns the Chicago Board Options Exchange, relying on financial products that it can list exclusively, Thursday reported a 16 percent decline in third-quarter earnings that was less than Wall Street expected.

CBOE Holdings Inc. said its net income fell to $37.7 million, 43 cents a share, from $44.7 million, 50 cents a share, for the same quarter in 2011. Revenue declined 11 percent to $128.3 million.

Analysts polled by I/B/E/S Thomson Reuters estimated CBOE would earn 38 cents a share. The stock rose 2.5 percent in early trading Thursday to $30.20.

All exchanges are weathering a decline in trading. CBOE Chairman William Brodsky said his exchange is banking on revenue growth from contracts tied to its VIX index of market volatility. VIX futures saw record volume during the quarter.

The CBOE also has the exclusive right to list options tied to the Standard & Poor’s and Dow Jones stock indexes. Options contracts on individual stocks can trade at multiple exchanges.

The company said average daily trading volume fell 22 percent during the quarter, to 4.34 million shares. It reduced expenses in response to the falloff.

“Our balance sheet remains strong, with cash of $160 million and no debt,” said Chief Financial Officer Alan Dean.

The company also owns the CBOE Futures Exchange.

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