CBOE Holdings Inc , which runs the oldest U.S. stock-options trading venue, said on Friday that first-quarter earnings rose on a surge in trading in its lucrative stock-index options.

Net income at the operator of the Chicago Board Options Exchange rose to $41.8 million, or 48 cents a share, from $32.9 million, or 37 cents a share, a year earlier.

Excluding accelerated stock-based compensation expenses, the profit was 50 cents a share, better than 47 cents that analysts expected, on average, according to Thomson Reuters I/B/E/S.

The report underscored CBOE's reliance on its proprietary products, led by futures and options on two widely watched gauges of U.S. stock markets, the CBOE Volatility Index and the Standard & Poor's 500 Index .

Chief Executive William Brodsky and CEO-designate Ed Tilly have vigorously defended CBOE's right to list the products exclusively, and that strategy has been the centerpiece of the company's strategy. Rivals have unsuccessfully challenged that right in court for years.

The contracts are used by institutional as well as retail investors to bet on and hedge against swings in the overall U.S. stock markets.

Since the contracts are licensed and not offered at any other exchanges, CBOE is able to command much higher fees for them.

But it failed to open for a half a day last week because of a software bug, preventing investors from accessing the contracts. That raised new questions about the Chicago exchange's hold on the contracts.

Trading in CBOE index options was up 28 percent in the quarter from a year earlier to 1.5 million on an average day, even as trading in options on individual stocks, which are offered at CBOE's 10 rival exchanges as well, sank.

Including both CBOE's options and futures exchanges, index-based contracts accounted for 37.9 percent of total trades, compared with 25.4 percent a year earlier, the company said.

That drove a jump in the fee CBOE collected, on average, from each trade in the quarter to 37.8 cents from 28 cents in the prior year's period.

Operating revenue rose 18 percent to $142.7 million.

(Reporting by Ann Saphir; Editing by Jeffrey Benkoe)