CBOE Holdings Inc's second exchange, C2, could quickly boost its market share once it lists the exclusive Standard and Poor's 500 Index option, the head of a rival exchange said on Thursday.

I wouldn't be surprised at all if C2 didn't rocket to 5 percent market share, Jeromee Johnson, head of the BATS Options exchange said at the Futures Industry Association's annual meeting. Listing S&P 500 index options electronically for the first time offers a phenomenal opportunity, he said on a panel discussion with the other U.S. options markets.

C2, launched last year, has about a 1 percent market share.

CBOE has an exclusive license to list options on the S&P 500 index, allowing the Chicago market to charge traders more and to keep competitors out.

CBOE Chief Executive William Brodsky has argued that CBOE has a right to keep its exclusive hold on the contract because it developed the product.

But competitors, including BATS and the International Securities Exchange (ISE), have long argued that customers would benefit from cheaper prices, and exchanges would benefit from exploding trading volume, if the contract were available more widely.

ISE is suing for the right to list identical index options, but so far courts have ruled against it. ISE CEO Gary Katz said he believes the courts will eventually rule in his favor, and trading will increase tenfold once exchanges can compete to list the contracts.

(Reporting by Ann Saphir; Additional reporting by Jonathan Spicer; Editing by Chizu Nomiyama, Gary Hill)