MIAX is down 46% from its high. $57 in the spring, $30.93 today.

When a business you like falls that far, there are only two moves. Buy with a plan, or wait with a plan. Chasing is not a plan. 🐬

This week one of the people who knows exchanges best went on the record: he's still bullish.

James Davolos runs research at Horizon Kinetics. He has studied exchanges for 21 years, since the NYSE merged into Archipelago in 2005. His team bought exchange seats on the CBOE, the Philadelphia and the Minneapolis Grain Exchange before they turned into stock. Horizon now sits on MIAX's board. (Keep that last part in mind. He's informed, and he's not neutral.)

One line from the MicroCapClub interview stopped me cold:

"The holy grail of exchanges is a proprietary future product, because the revenue per contract is more than 10x a multi-listed product, because you own the liquidity."

That line is why I'm bullish on MIAX too. So I did the work. Is it true? Why is it true? How defensible is it? And does it make MIAX a buy today?

My answer is in section 7. It comes with a price on it.

1. Is the holy grail real? Yes, and the gap is bigger than 10x

Look at Cboe. It sells two kinds of options under one roof.

• SPX and VIX options (proprietary, licensed, only Cboe lists them): about $0.93 per contract (Cboe's Q3 2025 guidance).

• Multi-listed stock options (anyone can list them): about $0.05 per contract.

Same company. Same tech. Same customers. A 17x difference in what each trade pays. 🐯

CME is the pure version. Almost everything it sells is proprietary: SOFR futures, E-mini S&P, crude. It earns about $0.69 per contract on average (Q2 2025). MIAX, the best operator in multi-listed options, earned $0.124 per options contract in Q2 2026.

So Davolos isn't exaggerating. If anything he's being polite.

2. Why it's true: three locks on the same door

Lock 1: the contract can't leave. A share of Amazon is the same share everywhere. Buy it on Nasdaq, sell it on more than a dozen exchanges or a dark pool. US options work the same way. Every listed option clears through one shared clearinghouse (the OCC). So brokers route each order to whoever pays best, and the price per trade collapses.

A futures contract is different. A CME future clears at CME's own clearinghouse. Open it there, and you close it there. Here's how Davolos puts it: "You can't then buy that future on CME and sell it on ICE, even if they did list it." Your margin, your collateral and your open positions all live in one place. Moving means rebuilding all of it.

Lock 2: liquidity is a magnet. Traders go where the other traders are, because that's where spreads are tight. Davolos calls it "borderline impossible to displace liquidity once it's established on one venue." Every new trade makes the venue better, which brings the next trade.

Lock 3: the license. The S&P 500 name is licensed. Cboe owns the SPX options franchise, CME the S&P futures franchise. A rival can copy the tech. It can't copy the name.

And the regulators made the gap wider. In stocks and options, US rules force exchanges to link up and route to the best price (Davolos calls the stock version "absurd": incumbents carry the costs, everyone else free-rides). Futures have no such rule. The silo is legal by design. 🌴

3. How defensible is it? Ask the challengers

History is the honest test. Big, well-funded firms have attacked CME's interest-rate futures again and again. Eurex US, NYSE Liffe US, ELX (backed by a group of banks), Nasdaq Futures. All came, none broke the franchise, most closed. The newest, FMX (from BGC Group), launched SOFR futures in 2024 with its own clearing at LCH. When tariffs hit markets in April 2025, traders ran straight back to CME.

The playbook that DID work is the one Davolos told: Jeff Sprecher at ICE. In 2000 he sat in a strip mall in Atlanta. He didn't fight NYMEX for West Texas crude. He built a new contract, Brent, and traded it electronically. ICE is now roughly CME's size.

The lesson: you don't steal a holy grail. You build a new one next to it. Think of each one as a toll bridge (one crossing, and every trade pays the toll).

4. Here's the catch for MIAX

MIAX doesn't own a holy grail. It's trying to build one.

Its core business is multi-listed options: the low-margin, anyone-can-list product incumbents treated as an afterthought. MIAX went from zero to 17% market share in it with better tech. Davolos: 18 microseconds round trip, about half the competition, and it slows only about 2x on the craziest days while rivals slow 20 to 50x. Smart. But Davolos himself says "there's nothing proprietary to the technology." That's a speed edge, not a lock. And speed edges can go stale. 🐯

The holy-grail attempt is futures. MIAX launched Bloomberg index futures in May 2026 (B500, Tini B500, Tini B100). The ICE playbook: a new contract, cheaper than S&P, sold through retail brokers like Interactive Brokers and Robinhood.

Where it stands today:

• MIAX financial futures: 2,226 contracts a day in September 2026.

• CME equity index futures: about 7.7 million a day (Q2 2025).

• MIAX's futures unit lost $9.5 million (adjusted EBITDA) in Q2 2026 alone.

Davolos calls it an "out-of-the-money option" that is worth "more than the market cap of MIAX by a multiple" if it works. He expects to know by Christmas 2027. Both can be true: small odds, big payoff.

5. What the price expects

The numbers (MIAX Q2 2026 filing, guidance, IBKR price):

• Price $30.93, about 111 million shares: $3.4 billion.

• Cash $660 million, almost no debt. Enterprise value about $2.8 billion.

• My estimate of after-tax operating profit for the coming year: about $160 million (after stock comp, depreciation, a 28% tax rate and the futures losses). So you pay about 17x that profit. Without the futures losses, about 15x.

At a 9% cost of capital, today's price only works if MIAX grows profit about 8% a year, and keeps earning above that cost for about 12 years. Reasonable. Not a gift.

6. Five scenarios (value per share today)

Probability-weighted: about $30. The stock is $30.93.

7. So, is MIAX a buy now?

Not today. Not at $31.

The holy grail is real. It's the reason I'm bullish. Now the bitter part: at this price you pay full value for the options business and get the futures dream roughly at fair odds, not free. My rule for the Compounding Portfolio is simple: 12% a year expected, or I wait. MIAX at $31 works out to about 9%.

It stays on my watchlist with three triggers:

1. Price at or below ~$26. That's a 15% margin below my weighted value.

2. The futures start to take. Bloomberg futures volume climbing past ~25,000 contracts a day, with the price per contract disclosed. That's a second bridge being built, and I'd re-score the whole thesis.

3. The core holds. Q3 results land October 29 (mark the date). I want options share back at 17% or more (it slipped to 16.7% in September) and the price per contract holding near $0.12.

Three triggers, written down. No guessing, no chasing.

The casino doesn't chase the hot table. It waits for the odds to tilt. 🐬

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Happy hunting.
Simon & The Sprinters 🐬⚡️🐆

Not investment advice. MIAX is on my watchlist, not in my portfolio. Sources: MIAX Q2 2026 results (Aug 5, 2026) and September 2026 trading results; Cboe September 2025 volume release; CME Q2 2025 results; FOW on FMX (April 2025); MicroCapClub, "Why Exchanges Beat the Market" with James Davolos (Oct 19, 2026).