Nasdaq, the second-biggest equity market in the United States, said that the Philadelphia Stock Exchange and other US markets with strong options trade were also in its sights.

Nasdaq president Alfred Berkeley said a successful merger with Amex would give Nasdaq, which had no options trade, at least a quarter of the US-traded options market for equities.

But it wants more.

"In the options markets, we would love to get 40 or 50 per cent of the market," Berkeley told Reuters during a visit to Melbourne.

"We would like to talk to other markets that have substantial options (trade)," he added.

Nasdaq tried a few years ago to start an options market from scratch but decided acquisition was the only way, Berkeley said.

"That's one of the reasons that we are acquiring, first, the American Stock Exchange and hopefully some otherAmerican exchanges," he told a business luncheon earlier on Monday.

Later, speaking to Reuters, he identified the Philadelphia market as well as the Chicago-based Pacific exchange as among the nation's strongest markets for trading options.

"The one that everybody talks about that's reasonably obvious ... is the Philadelphia Stock Exchange," Berkeley said.

"It has lost its CEO so that's an obvious natural for us to talk to them."The Philadelphia exchange's chief executive, Leopold Korins, quit last month, re-igniting speculation that the fiercely independent market would now fall prey to a bigger exchange.

Berkeley stressed Nasdaq was not in merger talks with any exchange other than Amex and wanted to settle that deal first.

He said Nasdaq planned to fund its acquisitions through cost-savings and that the merger with Amex, if approved, would reap around $500 million in efficiencies over 10 years.

He said he was confident of overcoming the concerns of some of Amex's "absentee landlords", who ownseats on the nation's third-biggest exchange and lease them to traders. Some of these owners have criticised the terms of the merger.

"This is a dynamic that we knew existed," Berkeley said.

Amex, set up in 1911 with brokers trading on a lower Manhattan kerbside, still operates on an open outcry system where brokers shout prices on a trading floor.

Nasdaq is a tender 27 years of age and has no physical marketplace. Broker-dealers display prices on computer screens.

Its current market capitalisation of $1.9 trillion trails the New York Stock Exchange with $11.8 trillion, but Nasdaq says its daily volume of roughly 700 million shares exceeds Wall Street.

Nasdaq, which promotes itself as the stock market for the next 100 years, is also promoting itself aggressively offshore, seeking to persuade foreign exchanges to join the Nasdaq-fold.

Berkeley, who arrived in Australia from Hong Kong, said offshore expansion would proceed by way of cooperative agreements, starting with linkages between Internetsites.

The Hong Kong exchange has expressed enthusiasm about linking its Web site with Nasdaq's site, he said. Nasdaq also planned to raise the idea with the Australian and Singapore exchanges.

Ultimately, provided listing and accounting rules are harmonised, firms could be listed on both Nasdaq and their local exchange with orders entered via the Internet, Berkeley said.

"We have discovered quite to our surprise an enormous thirst on the part of investors for basic information," he added.