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Cboe Global's (CBOE) August Volume Increases Year Over Year

Zacks Equity Research

Cboe Global Markets, Inc. CBOE posted total average daily volume (ADV) of 8.8 million contracts, improving 24.8% year over year driven by solid performance across Options and Futures. Though U.S. Equities witnessed increase, European Equities and global forex declined.

Total contracts for the month were nearly 194 million, up 19.4% year over year. Of this, Options improved 18.7% to 186.1 million while Futures increased 36.2% to 7.9 million. Options’ ADV was 8.5 million whereas Futures’ ADV was 0.4 million.

Total volumes of U.S. Equities came in at 28 billion shares, up 11.9% year over year. European Equities reflected a 28.5% deterioration year over year to €146.9 billion whereas Global FX fell 9.2% to $728 billion.

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

The 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.

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.  In its efforts to boost growth, the company plans to launch CBOE Closing Cross, a new post-close trading service operating across 18 European markets in October 2019 and intends to bring similar product in the U.S. Equities market too.  

Shares of CBOE Global Markets have outperformed the industry quarter to date. The stock has rallied 15% compared with the industry’s increase of 13.3%. Diversified product portfolio, compelling growth, expense synergies, increasing transaction fees and solid liquidity position should continue to help retain the bull run.

Recently, other securities exchanges, namely Nasdaq Group Inc. NDAQ, MarketAxess Holdings Ltd. MKTX and CME Group Inc. CME also posted their respective monthly volumes.

CME Group’s ADV of 24.3 million contracts for August 2019 were up 53% year over year. This marks the second-highest monthly ADV of the company. Nasdaq’s U.S. equity options volume increased 5.4% year over year to 157 million contracts, European options and futures volume rose 33.9% year over year to 7.5 million contracts. MarketAxess’ total volume of $172.8 billion included $85.2 billion in U.S. high-grade volume, $83 billion in other credit volume and $4.6 billion in liquid products volume.

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