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Cboe Global Posts Strong September Volumes, Guides Q3 RPC

Zacks Equity Research
·3 min read

Cboe Global Market, Inc. CBOE recorded total average daily volume (ADV) of 10.4 million contracts in September, up 26.4% year over year driven by solid performance in Options, partly offset by lower Futures volume. Though U.S. Equities and Global Forex witnessed increase, European Equities declined.

Total contracts for the month were nearly 218.2 million, up 32.6% year over year. Of this, Options improved 34% to 214.1 million while Futures decreased 13% to 4.1 million. Options’ ADV was 10.2 million whereas Futures’ ADV was 0.2 million.

Total volumes of U.S. Equities came in at 32.2 billion shares, up 33.5% year over year. European Equities reflected a 11.5% deterioration year over year to €129.3 billion whereas Global FX increased 10.1% to $702.1 billion. Total volumes of Canadian Equities traded were 828.8 million in September.

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 third-quarter Options RPC to be up 5 to 6% from the two months ended Aug 31 average, largely driven by 8-10% higher RPC projected for multi-listed options for September that in turn was driven by lower volume-related rebates. RPC for Futures is expected to be in line with the two-month ended Aug 31 average.

Shares of CBOE Global Markets have lost 26.8% year to date against the industry’s increase of 0.4%. Nonetheless, diversified product portfolio, compelling growth, expense synergies, increasing transaction fees and solid liquidity position should continue to help shares bounce back.

Recently, MarketAxess Holdings Ltd. MKTX, CME Group Inc. CME and Intercontinental Exchange, Inc. ICE reported trading volume for September 2020. MarketAxess reported trading volume of $461 billion, consisting of $206.2 billion in credit volume and $254.8 billion in rates volume. Intercontinental’s ADV decreased 10.7% to 6.1 million, largely attributable to lower Energy, Commodities and Financial ADV. CME Group reported ADV for September 2020 of 16.9 million contracts per day, down 14% year over year attributable to lower volumes in four of the six product lines.

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