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CME Group Posts Mixed August ADV Across 6 Product Lines

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CME Group Inc.  (CME - Free Report) reported volumes for August 2018, marking growth across five product lines. ADV of 15.9 million contracts per day remained flat year over year but improved 18% sequentially. Of this, Options volume average totaled 3.2 million contracts.

Shares of CME Group have outperformed the industry year to date. While the stock has rallied 18%, the industry has registered 10.3% growth.



Metals volume of 0.6 million contracts per day inched up 1% whereas Interest rate volume of 8.6% million contracts grew 11% and Foreign exchange volume ascended 8% to about 0.8 million. Agricultural volume of about 1.4 million contracts climbed 3% year over year. Equity index volume of 2.4 million decreased 12% while Energy volume of 1.9 million contracts plunged 30% year over year.

Recently, securities exchange MarketAxess Holdings Ltd. (MKTX - Free Report) reported a trading volume of $124.4 billion for August comprising $66.1 billion in U.S. high-grade volume, $53.3 billion in other credit volume and $5 billion in liquid products volume. Nasdaq Inc. (NDAQ - Free Report) too posted a 10.5% increase in options volume, registering 154.6 million contracts.

Improved volumes across trading line should continue to fuel growth for CME Group.  Fundamental growth remains a huge driver for the company’s improving operating leverage. Increasing electronic trading volume adds scalability and hence leverage to the operating model. Expansion of futures products in the emerging markets plus a rise in non-transaction related opportunities as well as OTC (over the counter) offerings should continue to contribute modestly to top-line growth in the years ahead. Efforts to expand and cross-sell via strategic alliances, judicious acquisitions, product launches as well as a widening global footprint should also drive growth.

CME Group carries a Zacks Rank #4 (Sell).

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