The International Securities Exchange reported that its net income for the first quarter increased 40.1% to a record US$12.4 million.

Total revenue for the quarter increased 28.9% to $47.5 million vs $36.9 million in the prior year. Gross margin increased 25.0% to $41.6 million as compared to $33.3 million in the first quarter of 2005. The average daily volume of equity and index options contracts traded increased 37.6% to 2.4 million contracts as compared to 1.7 million contracts in the year-ago quarter.

“We delivered another strong performance in the first three months of 2006 as our average daily volume exceeded two million contracts for the second consecutive quarter,” said David Krell, ISE’s president and CEO. “The double digit growth in our core options business fuelled a 40% increase in net income once again reflecting the operating leverage that is inherent in our business. We also continued to post strong cash flow, which we now share with our stockholders by virtue of the implementation of the dividend policy that we announced last year.

“During the quarter, we made further progress in executing our strategy to grow our information and market data products. In January, we announced the launch of a new market data product that provides historical market data to traders and investors to improve the effectiveness of their respective trading strategies. This product is the latest offering in our suite of market data products, which will soon expand to include depth-of-book and enhanced sentiment market data offerings. Additional introductions of new products in this area will enable us to monetize the significant amount of proprietary data that we store in the normal course of our operations,” added Krell.