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Cboe Global (CBOE) Posts Solid December Volumes, Guides Q4 RPC

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Zacks Equity Research
·3 min read
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Cboe Global Markets, Inc. CBOE reported total average daily volume (ADV) of 10.8 million contracts in December, up 45.8% year over year, driven by solid performance in Options, partly offset by lower Futures volume.  U.S. Equities Global Forex as well as European Equities increased.

Total contracts for the month were nearly 238.2 million, up 52.7% year over year. Of this, Options improved 55.3% to 234.8 million while Futures decreased 29.3% to 3.4 million. Options’ ADV was 10.7 million whereas Futures’ ADV was 0.2 million.

Total volumes of U.S. Equities came in at 34.8 billion shares, up 54.4% year over year. European Equities reflected a 10.1% improvement year over year to €127.23 billion whereas Global FX increased 14.5% to $719.1 billion. Total volumes of Canadian Equities traded were 1.1 billion in December.

CBOE Global should continue witnessing solid average daily volumes, given its compelling product portfolio, which drives transaction fees that account for the lion’s share of total operating revenues.

This Zacks Rank #3 (Hold) derivatives exchange in the United States has a strong market position and global reach with strength in its proprietary products, primarily SPX options, VIX options and VIX futures.

With respect to revenues per contract (RPC), Cboe Global estimates fourth-quarter Options RPC to be down 2% to 3% from the two months ended Nov 30 average, largely due to 1-2% lower RPC projected for multi-listed options for December. RPC for Futures is expected to be in line with the two-month ended Nov 30 average.

Concurrently, the company also reported sturdy volumes for full-year 2020. Options volumes were at a record high of more than 2.5 billion contracts while U.S. equities volume hit a record of more 436 billion shares. Options ADV increased 38%. U.S. Equities ADV improved 50% while Global FX ADNV increased 7% year over year.

Shares of CBOE Global Markets have lost 19.2% in a year against the industry’s increase of 12%. Nonetheless, diversified product portfolio, compelling growth, expense synergies, increasing transaction fees and solid liquidity position should continue to help shares bounce back.



CME Group CME reported December average daily volume of 14.2 million contracts per day, down 8% year over year, attributable to lower volumes in four of the six product lines.  MarketAxess Holdings MKTX reported December volumes of $472.3 billion, comprising $203.5 billion in credit volume and $268.7 billion in rates volume. Intercontinental Exchange ICE average daily volume in December decreased 1.4% to 4.9 million, largely attributable to lower Commodities and Financial ADV.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.               

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