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Regulators approve new Chicago-based options trading floor

NEW YORK, Aug 2 (Reuters) - The first new U.S. open-outcry trading floor in decades was approved by regulators on Wednesday, allowing the BOX Options Exchange to buck the trend of shuttering floors in favor of fully electronic trading.

BOX plans to open the trading floor in Chicago later this month, the exchange said in a statement following the decision to allow the move by the U.S. Securities and Exchange Commission.

While the majority of options trades are done electronically, floor trading is sometimes preferred for larger, more complex orders, allowing some options trading pits to survive even as most stock and futures trading floors have been phased out.

There are currently four options trading floors in the United States: NYSE Arca Options in San Francisco, NYSE American Options in New York, Nasdaq PHLX in Philadelphia, and the Chicago Board Options Exchange.

CME Group Inc closed its options pits, where trades in commodities like gold, silver and oil took place face-to-face instead of electronically, last year, following the closure of most of its futures pits in New York and Chicago due to shrinking open-outcry volumes.

BOX, which is owned by Toronto Stock Exchange operator TMX Group Ltd and eight broker-dealers, had a 2.1 percent market share of options trading last month, according to the Options Clearing Corp. The exchange said the floor would help it attract new business.

BOX trades more than 1,500 options classes, with the bulk of trades on its exchange happening in stock options.

Some firms, such as CBOE Holdings Inc, Nasdaq Inc , and CTC Trading Group LLC, had opposed BOX's plan to open a new floor, saying the exchange's low market share and the cost to market makers of staffing the floor could limit participation and lead to worse prices for investors. (Editing by Matthew Lewis)