CME Group, Inc. (CME - Analyst Report) recently announced that its average daily volume (ADV) for September increased 6% year over year to 15 million contracts. Of this, Options volume inched up 9% year over year and averaged 2.9 million contracts per day, while electronic options surged 22% year over year and averaged 1.7 million contracts per day.
While Metals volume of 0.4 million contracts per day increased 30%, Energy volume of 2.4 million contracts climbed 25%. Also, Interest rate volume of 6.5 million contracts per day improved 5%, Equity index volume of 3.8 million increased 3%, Foreign exchange volume was up 2% to nearly 1 million. However, Agricultural volume of about 1 million contracts per day declined 9% year over year.
For the third quarter of 2016, total volumes were 14.3 million contracts, flat with year-ago level. Total open interest at the end of third-quarter 2016 was 103 million contracts, up 12% year over year. Notably, in the third quarter the company’s open interest approached record levels, hitting 111.2 million contracts on Sep 15, 2016.
In late July, CME Group announced its equity member subscription rate program. Though the program is at a nascent stage, the company estimates revenues of about $0.15 million to be booked in Other Revenue for third-quarter 2016.
Recently, securities exchanges CBOE Holdings Inc. (CBOE - Analyst Report) , Intercontinental Exchange, Inc. (ICE - Analyst Report) and MarketAxess Holdings Ltd. (MKTX - Analyst Report) also posted their September volumes. While CBOE Holdings’ average daily volume inched up 0.3% to 5.1 million contracts per day, Intercontinental Exchange’s average daily volume increased 26.8% to 5.2 million contracts. MarketAxess’ monthly trading volume for Sep 2016 was $113.4 billion.
CME Group’s strong fundamentals help it in improving operating leverage (a catalyst to fuel growth in average daily volumes). This enables CME Group to maintain its strong foothold in the market where it operates. In fact, the insurer holds about 90% market share of the global futures trading and clearing services. Expansion of futures products in emerging markets, non-transaction related opportunities and OTC offerings should continue to contribute modestly to top-line growth in the coming years. Efforts to expand and cross-sell through strategic alliances, acquisitions, new product initiatives and global presence should also drive growth.
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