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Cboe Global Posts Solid September Volumes, Guides Q3 RPC

Zacks Equity Research

Cboe Global Markets CBOE reported solid volumes for September 2019. Total ADV of 8.2 million contracts improved 13.4% year over year driven by solid performance across Option. However, Futures ADB witnessed decline.

Total contracts for the month were nearly 164.5 million, up 19.4% year over year. Of this, Options contracts declined 19.9% to 159.7 million while Futures increased 3.4% to 4.7 million. Options ADV was nearly 8 million whereas Futures ADV was 0.2 million.

Total volumes of U.S. Equities came in at 24.1 billion shares, up 10.8% year over year. European Equities reflected a 28.6% deterioration year over year to €146 billion whereas Global FX fell 10.9% to $637.7 billion.

Q3 RPC Guidance

Concurrently, CBOE Global estimates revenue per contract (RPC) for total options for the third quarter of 2019 to be 1% to 2% lower than 24.10 cents for the two months ended Aug 31, 2019. The RPC for futures is projected to be 0.5% to 1% higher than the two-month average of $1.783, indicating lower volume-related rebates in September.

Compelling product portfolio should continue to drive solid average daily volumes for CBOE Global. This aids transaction fees, which accounts for the lion’s share of total operating revenues.

This 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. The company is also exploring new markets like the Middle East, Scandinavia and Asia, while pursuing jurisdictional approval in more established markets, including Switzerland and Israel.  

The company updates its diverse service offerings, makes technological advances and offers a strategic economic market model in order to remain competitive amid changing industry dynamics.

Shares of CBOE Global Markets outperformed the industry in the third quarter. The stock has rallied 10.9% compared with the industry’s increase of 7.4%.

Recently, MarketAxess Holdings MKTX, CME Group CME and Intercontinental Exchange ICE reported trading volume for September 2019. MarketAxess’ (MKTX) trading volume of $176.1 billion for the month consisted of $88.7 billion in U.S. high-grade volume, $83.9 billion in other credit volume, and $3.5 billion in liquid products volume. CME Group reported double-digit increase in September ADV in Interest Rate options, Equity Indexes, Energy and Metals. Foreign Exchange and Agricultural Commodities reported single-digit decline in September ADV. Intercontinental Exchange’s September Commodities ADV increased 10.2% while Financial ADV improved nearly 2%.

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Cboe Global Markets, Inc. (CBOE) : Free Stock Analysis Report
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