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Nasdaq (NDAQ) Posts Mixed Q3 Volumes, Revenue per Contract


Nasdaq, Inc. NDAQ has reported mixed volumes for third-quarter 2017. While the U.S. equity options volume improved 4.9% year over year to 364 million contracts, revenue per contract was 14 cents and declined 17.6% on a year-over-year basis. Market share jumped to 41.0% from 39.2% in the year-ago quarter

European options and futures volumes were 19.2 million contracts in the third quarter, flat year over year. Revenue per contract was 51 cents, up 4.1% on a year-over-year basis.

Under its cash equities, Nasdaq’s U.S. matched equity volume in the third quarter totaled 69.1 billion shares, down 26% from the prior-year quarter. While the European equity volume expanded 22.6% year over year to $221 billion. Again, the U.S. Fixed income volume in the third quarter contracted 17.5% year over year to $3.9 billion. The European fixed income volume on the other hand was 6.8 million contracts, up 38.8% year over year.

Nasdaq’s strategic initiatives have always accelerated growth. A sustained improvement in revenues has been aided by the company’s scheme to build up non-transaction revenue base, including market technology, listing and information revenues. Management’s medium-term outlook calls for mid-single digit growth over the next three-five years. Strategic acquisitions have been helping the company diversify as well as add capabilities to its portfolio. The organization is also intensifying focus on Nasdaq Private Market Alternatives and the Nasdaq Ventures to ramp up growth over a longer term.

In the third quarter, there were 3,525 listed companies on Nasdaq compared with 3,452 in the year-ago quarter. Total listings improved 3.7% over the earlier-year quarter to 3,887.

Nasdaq’s shares have gained 11% year to date, underperforming the 22% rally of the industry. The stock has been witnessing the Zacks Consensus Estimate tilting toward downward estimate revisions over the last 60 days. The company is set to report third-quarter earnings on Oct 25 before the market opens.

Our proven model does not conclusively show if the company is poised to beat on earnings this quarter. Nasdaq currently carries a Zacks Rank #4 (Sell), which lowers the predictive power of ESP. However, when the same is combined with a Earnings ESP of +0.49%, it leaves the surprise prediction inconclusive.

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

Concurrently, Nasdaq reported lower September 2017 volumes, reflecting a fall in trading activities. The U.S. equity options volume decreased 5.7% year over year to 116 million contracts. However, the European options and futures volume was 8 million contracts, flat year over year.

Recently, securities exchanges namely, CBOE Holdings Inc. CBOE, CME Group Inc. CME and MarketAxess Holdings Ltd. MKTX also posted their September volumes.

CBOE Holdings’ ADV reduced 5.4% to 7.0 million contracts per day, while CME Group witnessed a 13% rise in ADV to 17 million contracts. MarketAxess’ monthly trading volume for September was $116.8 billion.

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