A long-planned electronic stock-options market developed by the Chicago Board Options Exchange will open for business Friday, Oct. 29, the company said Wednesday.

Options on the stock of Ford Motor Co. will be the inaugural contract for CBOE’s C2 Options Exchange, with contracts on AT&T Inc., Merck & Co. Inc. and McDonalds Corp. to follow on Nov. 1.

In the works for about two years, C2 is CBOE Holdings Inc.’s answer to a range of all-electronic options exchanges that have cut into the business of the Chicago Board Options Exchange over the past decade.

C2 will be the ninth U.S. options exchange, launching as the number of venues for trading stock options continues to expand. In February, BATS Global Markets introduced an options exchange, and International Securities Exchange is moving forward with plans to introduce a second market.

In August, trading and brokerage company Instinet Inc. introduced a new electronic platform designed to let investors privately arrange options transactions before executing the trades on an exchange.

The new C2 exchange will incorporate a market model seen appealing to high-speed electronic traders, who are keen to trade CBOE’s specialized options linked to major stock indexes such as the S&P 500 and the Dow Jones Industrial Average. Most of the trading in these contracts remains on the trading floor of the CBOE.

Those products are expected to make their debut on the all-electronic C2 exchange in the first quarter of 2011.

Before then, options on popular exchange-traded funds, such as the S&P 500 Depositary Receipts Exchange Traded Fund and the PowerShares QQQ Trust, will be added to the new market, according to the Wednesday notice from CBOE. C2 eventually aims to list the most-active options contracts that currently trade in penny increments; such penny-priced options are estimated to represent about 85 percent of daily trading in U.S. options markets.

The new market is being positioned to catch trades that CBOE otherwise might lose to another exchange. When C2 is displaying the most competitive price nationally for any given option contract, and CBOE isn’t, CBOE would make its new electronic sister market the primary destination for orders that aren’t filled on the CBOE.

While CBOE executives have touted the new exchange as boosting overall trading activity for the company, some analysts have aired concerns that C2 will siphon away business that otherwise would be done on the primary CBOE market.

“We have been somewhat cautious on our outlook for C2 as we believe it could cannibalize C1 at some level and the uptake in index electronic trading may not be as great as some investors are expecting,” wrote Ticonderoga Securities analyst Chris Allen in a note Wednesday.

Last week, CBOE moved to secure a ruling that would protect C2 from a long-running legal dispute between CBOE and the rival International Securities Exchange, centered on intellectual-property rights related to electronic trading systems.

CBOE shares closed 0.1% lower at $22.20 Wednesday.