* fourth-qtr adj profit $0.64/shr vs. est $0.66
* Average daily volume up 15 pct to 5.64 mln contracts
* Operating costs rise 15 percent
* Shares down 4 pct (Adds shares, background)
Feb 6 (Reuters) - CBOE Holdings Inc, operator of the largest U.S. stock-options market, reported a lower-than-expected quarterly profit as higher expenses offset a surge in trading volumes.
Shares of the company fell more than 4 percent to $62.44 in early trading on Friday
Net income allocated to common stockholders rose to $49.1 million, or 58 cents per share, in the fourth quarter ended Dec. 31, from $45.6 million, or 52 cents per share, a year earlier.
Adjusted earnings were 64 cents per share. Analysts on average had expected 66 cents, according to Thomson Reuters I/B/E/S.
Operating revenue rose 17 percent to $166.5 million.
However, operating costs increased 15 percent to $79.5 million, mainly due to a spike in volume-based expenses, which include royalty fees and trading volume incentives.
The company said in August that it would cut expenses in the face of declining trading volumes that are eating into profits.
Average daily volume rose 15 percent to 5.64 million contracts during the quarter as increased volatility boosted trading activity.
Last year, total trading volume for options contracts on CBOE's Chicago Board Options Exchange and C2 Options Exchange and for futures contracts on CBOE Futures Exchange climbed 12 percent to a record 1.3 billion contracts, or an average of 5.3 million contracts a day.
CME Group Inc, the world's largest futures market operator, reported better-than-expected quarterly profit on Thursday and said it would shut nearly all of its futures pits in New York and Chicago as it pushes ahead with cost-cutting measures.
CBOE shares closed at $65.14 on Thursday on the Nasdaq. They have climbed 28 percent in the past year, compared to gains of 26 percent for CME Group. (Reporting by Anil D'Silva in Bengaluru and Tom Polansek in Chicago; Editing by Don Sebastian)