It has been awhile since I posted an article on NYSE. I have been touting this stock since it was trading as Archipelago Holdings (AX). The stock has been beaten up pretty bad over the last several months (-20%), leading to a trailing 52 week performance of these shares of -28%.

With that being said, I believe that this is all an over reaction to the increasingly volatile US market. One point that I want to really drill down, however, is that the same volatility that has been bringing the markets down have been increasing the revenue and profits of the exchanges. "NYSE Euronext said on March 6th, 2008 that trading volumes in February were very strong. The Euro Cash market volumes rose 43% year-over-year, and US Equities volume also rose by a 20% growth rate. Derivative volumes also rose on both sides of the Atlantic – European derivative volume rose by a 37% metric, and US derivative volume on the NYSE rose by over 70%!"

What is in store for this company? NYX is expected to achieve $3.29 in earnings per share this year (ending Dec 2008), putting the current P/E ratio for the Company at roughly 14x its expected calendar year forward earnings. 2009’s earnings are forecast in a range from $4.56 per share in EPS on the high end, all the way down to $3.87 on the low end.

Right now the stock is trading around $59 (up 3% for the day), which is significantly below their all time highs of $105-110. Daniel Jones of Options Notions believes that you should start accumulating shares at or below $60 per share, with a target exit price of $90 per share. That is a 50% increase.

Daniel has a few trading ideas, of which I am a full supporter:

1. Buy the stock outright/ write covered calls at intermediate points: We would commit 50% of the capital balance investors would like to commit to this company at present levels Monday Morning, March 10th, 2008, at or below $60.00 per share, and then look to add another 50% position if the stock price declines to a level of $57.50 or lower.

2. Option trade: Our written put strategy calls for investors to sell, or “write” the June and September 2008 expiration put options on NYX at the $60.00 and $55 strike price.

3. Bullish Call Spread Suggestion: Buy the June 70 calls and sell the June 80 calls. This will give option buyers an opportunity to sell capitalize on an upward move (June 80 calls are presently $0.93 bid) which offsets the cost of the lower strike price calls (June 70 calls are $2.74 ask), giving an option investor a net cost for June 70 calls of $1.81 ($2.74 minus $0.93).