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Cboe Global Markets Posts Record Volumes for 2017, Shares Up


Shares of Cboe Global Markets, Inc. CBOE gained 2.9% in the last trading session after it reported solid average daily volume (ADV) for 2017. Total ADV of 7.2 million contracts improved nearly 11% over 2016.

Total contracts for 2017 were 1.8 billion, having improved 12.5% year over year. Of this, options contracts decreased 10.4% to 1.7 billion while futures contracts improved 23% to 74 million. Options ADV was 6.9 million and Futures ADV was 0.3 million.

Subsequently, ADV of the U.S. Equities Matched came in at 1.2 billion shares in 2017, down 18.1% from 2016 while the European Equities Matched reflected a decline of 10.7% year over year to €9.4 billion. Interestingly, the Global FX Matched climbed 9.8% to nearly $29.6 billion.

The company announced ADV in index options trading at both Cboe Options Exchange and C2 Options Exchange besides the same in S&P 500 index (SPX) options trading at Cboe, marking an all-time high for the fifth consecutive year.

CBOE Global Markets has been witnessing a rise in trading volumes over a considerable period of time, largely supported by increasing transaction fees and in turn, boosting revenue growth.

We believe this Zacks Rank #3 (Hold) options exchange to retain the revenue momentum in the coming quarters, backed by a strong market position, global reach, prudent acquisitions and a robust portfolio of proprietary products. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

For the fourth quarter of 2017, Options ADV decreased 7.7% while Futures ADV declined 4.3%. Average revenue per contract for the fourth quarter is projected in line with the earlier months. Following the Bitcoin Futures launch on Dec 10, total volume in Cboe Bitcoin Futures at Cboe Futures Exchange was 56,092 contracts for the 14 trading days in December.

Shares of CBOE Global Markets have significantly outperformed the industry in a year. The stock has soared 71.2% compared with the industry’s surge of 31%. We expect both bottom and top-line improvements along with a diversified product portfolio and expansion moves to fuel growth as well as drive the shares higher.

Recently, securities exchanges CME Group Inc. CME, Intercontinental Exchange, Inc. ICE and MarketAxess Holdings Ltd. MKTX have also reported their respective volumes. While Intercontinental Exchange’s average daily volume increased 5% to 5.1 million contracts, MarketAxess has reported a trading volume of $104.4 billion for December 2017. CME Group’s ADV of record of 15.9 million contracts per day declined 2% year over year.

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