International Securities Exchange Holdings Inc. today reported record third quarter earnings, up 66.3% to US$14 million.

Total revenues for the quarter increased 30.3% to US$50.1 million versus US$38.4 million in the prior year. Gross margin, or total revenues less cost of revenues, increased 31.8% to US$44.5 million from US$33.7 million in the third quarter of 2005. The average daily volume of equity and index options contracts traded increased 29.7% to 2.2 million contracts as compared to 1.7 million contracts in the year-ago quarter.

“We continued to execute our strategic initiatives while delivering strong top line growth and record earnings for the third quarter,” said David Krell, ISE’s president and CEO. “In order to build upon this momentum, we implemented several new strategic initiatives which will establish ISE’s footprint in new markets and expand the penetration of our core business in the markets in which we already compete. The launch of the ISE Stock Exchange and its first product, Mid Point Match, was an operational success and has performed according to our expectations. We are pleased with the performance and the favorable response that we have received to date and we are looking forward to the launch of our fully displayed market later this year.”

“In addition to our progress in expanding into new businesses, we continue to introduce new and differentiated products,” continued Krell.

For the first nine months of 2006, average daily volume of equity and index options increased to 2.3 million contracts traded as compared to 1.7 million equity and index options contracts traded in the prior year. Revenues increased to US$148.7 million from US$112.3 million. Gross margin increased to US$131.1 million from US$99.6 million. Net income increased to US$40.1 million from US$25.4 million last year.