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# Why Exchanges Beat the Market | James Davolos
- URL: https://microcapclub.com/why-exchanges-beat-the-market-james-davolos/
- Published: 2026-10-19T09:51:38.000Z
- Updated: 2026-10-19T09:51:38.000Z
- Author: David Barbato
- Tags: Interview

James Davolos is a portfolio manager at Horizon Kinetics, where he has spent nearly 21 years studying exchanges and what the firm calls croupier businesses. These are companies that earn fees on trading volume without putting their own capital at risk. One of his first projects at the firm was the New York Stock Exchange’s reverse merger into Archipelago, and his team later bought exchange seats ahead of demutualizations at the CBOE, the Minneapolis Grain Exchange and others.

In this episode, James explains why exchanges have outperformed their local markets over 20 years, why derivatives are the strongest moat in the industry and why inflation and volatility work in exchanges’ favor. He also breaks down MIAX: how it took close to 17% of the multi-listed options market, whether perpetual futures threaten the business and what the Bloomberg futures bet could be worth. The conversation closes with James’s reflections on Horizon Kinetics founder Murray Stahl.

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You can listen/watch this conversation on [Spotify](https://open.spotify.com/episode/1I7sCITcUa4ryEeOWlZZKv?si=Wb6m1gG0TUCWmJE4LZnH4A&ref=microcapclub.com), [Apple](https://podcasts.apple.com/us/podcast/microcapclub/id1765974269?i=1000797047654&ref=microcapclub.com), and YouTube below:

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