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CBOE Holdings (CBOE) Reports Increase in February Volumes

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CBOE Holdings, Inc. (CBOE - Free Report) recently announced that its average daily volume (ADV) for February has increased 16% year over year to 5.4 million contracts. Sequentially, the metric climbed 11%. The month of February had 19 trading days.

Total contracts for Feb 2017 was 102.7 million, up 11% year over year. Of this, options contracts increased 10% to 97.8 million, while futures contracts jumped 22% to 5 million. Of average daily volume, Options ADV was 5.1 million and Futures ADV was 0.3 million. Year to date, the company recorded higher volumes.

ADV for SPX options was 1.2 million contracts, while for VIX options was 0.7 million contracts. ADV for VIX futures was 0.2 million contract in February. Notably, the year 2016 marked the fourth consecutive year of record index trading driven by new all-time highs in SPX options and VIX futures trading. We believe that launching products, which not only meet the needs of the derivatives industry but also complement its core product lines and update its diverse service offerings and technological advances, should help the exchange retain its revenue momentum. Notably, revenues have grown at a five-year CAGR of 6%.

Recently, securities exchange Intercontinental Exchange, Inc. (ICE - Free Report) also reported its February volumes. Average daily volume dipped 3% to 58 million contracts. MarketAxess Holdings Inc. (MKTX - Free Report) , on the other hand, reported monthly trading volume of $117.8 billion for Feb 2017. CME Group Inc.’s (CME - Free Report) ADV was $18.4 million, down 1%.

Shares of CBOE Holdings’ have modestly underperformed the growth for the Zacks categorized Securities Exchanges industry, year to date. While CBOE Holdings gained 6.1%, securities exchanges gained 7.5%. Though the company has been facing intense competition due to increased market consolidation that tends to reduce market share and leverage of the business, we see potential upside for the stock fueled by its organic growth.


Nonetheless, CBOE Holdings is the first and largest global options exchange in the U.S. Since its inception, the company has been a trendsetter in volatility trading. Recently, the company closed the acquisition of Bats Global Markets for $3.4 billion in a cash-stock deal to address the increasing demand for index–based investing market.

Zacks Rank

CBOE Holdings carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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