US market operator Nasdaq is looking to expand in options trading by acquiring the Philadelphia Stock Exchange (PHLX), according to a Wall Street Journal report.
The report, which cites people familiar with the situation, says the two exchanges have been talking for months but a deal isn't expected soon and may take several weeks to put together.
PHLX could be valued at $250 million to $300 million, according to the report, which is a small sum compared with the value of many exchanges.
Discussions between the two exchanges are thought to have intensified in the last few weeks as Nasdaq looks for its next step after failing in its bid to buy the London Stock Exchange.
The Philadelphia exchange, which is the third-largest options exchange in the US, is majority-owned by a group of brokerage firms. The six Wall Street firms - Merrill Lynch, Citadel Derivatives Morgan Stanley, Citigroup, Credit Suisse and UBS - hold a collective 89.4% stake in PHLX.
However PHLX is still considering an initial public offering of stock or selling up to a larger exchange.
Nasdaq and other exchanges are looking to expand into the options business, which has seen volumes increasing steadily in recent years, says the WSJ report.
Nasdaq said last September that it would launch an equity and index options market in the third quarter of 2007. The move followed the launch of Nyse's options trading platform in August.