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Nasdaq (NDAQ) Q4 & December Volumes Mixed, Expense View Updated

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Nasdaq (NDAQ - Free Report) reported mixed volumes for fourth-quarter 2020. While U.S. equity options volume increased 70.7% year over year to 741 million contracts, European options and futures volume dropped 29.8% year over year to 17.4 million contracts. Shares of the company gained 1.1% in the last couple of trading sessions.

Though revenues per contract for U.S. equity options dropped 21.4% to 11 cents, the same for European options and futures improved 40% to 56 cents.

Under its cash equities, Nasdaq’s U.S. matched equity volume in the fourth quarter grossed 115.4 billion shares, up 45.2% from the prior-year quarter. European equity volume increased 39.1% year over $281 billion.

Under fixed income commodities, U.S. Fixed income volumes traded were $1.7 trillion, down 0.6%. European fixed income volume decreased 7.7% to 6 million contracts.

In the fourth quarter, there were 4,051 listed companies on Nasdaq compared with 3,768 in the year-ago period. Total listings grew 6.8% year over year to 4,119.

Nasdaq continues to witness growth in its index and analytics businesses, followed by moderate growth in exchange data products across U.S. and Nordic equities, options and fixed income businesses. The company is ramping up its non-transaction revenue base, which includes market technology, listing and information revenues. It is also expanding technology and analytics offerings. Nasdaq remains focused on core special marketplace platform businesses but intends to lower capital resources for investment in businesses that do not offer considerable growth for the company.

Concurrently, Nasdaq updated its expenses guidance. Earlier, it had raised 2020 non-GAAP operating expense guidance to a range of $1.36 billion to $1.37 billion from $1.33 billion to $1.36 billion guided earlier, given organic increase in expenses and unfavorable changes in foreign exchange rates. It now estimates the high end to increase by $45 million including $20 million increase in performance-linked compensation and other variable expenses and $25 million for costs from single customer implementation project.  

Shares of this Zacks Rank #3 (Hold) provider of trading, clearing, marketplace technology, regulatory, securities listing, information and public and private company services gained 32.2% in a year compared with the industry's growth of 13.8%.


Nasdaq also reported December volumes. U.S. equity options volume increased 88.4% year over year to 277 million contracts. European options and futures volume decreased 14.5% year over year to 5.3 million contracts.

Recently, CME Group (CME - Free Report) reported average daily volume of 14.2 million contracts per day, down 8% year over year in December, attributable to lower volumes in four of the six product lines.  MarketAxess Holdings (MKTX - Free Report) reported December volumes of $472.3 billion, comprising $203.5 billion in credit volume and $268.7 billion in rates volume. Intercontinental Exchange (ICE - Free Report) ADV decreased 10.7% to 6.1 million, largely attributable to lower Energy, Commodities and Financial ADV.

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