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Cboe Global May ADV Soft, Global FX Matched Solid, Shares Up


Cboe Global Markets, Inc. CBOE reported average daily volume (ADV) of nearly 7 million for May 2018. Though ADV declined 5.3% year over year, shares of the company gained nearly 3.6% in the last couple of trading sessions.

Total contracts for the month were 152.9 million, slipping nearly 5.3% year over year. Of this, options contracts declined 4.7% year over year to 147.6 million while futures contracts fell 4.7% to 5.4 million from the year-ago tally. While Options ADV was 6.7 million, Futures’ was 0.2 million.

Subsequently, ADV of the U.S. Equities Matched came in at 1.3 million shares last month, down 2.6% year over year whereas the European Equities Matched contracted 2.9% year over year to €10.5 billion. The Global FX Matched improved 45.3% to nearly $40.9 billion.

Though the May volumes were down compared with the year-ago level, the company has witnessed a year-to-date ADV increasing year over year. Rise in trading volumes should consistently drive transaction fees (accounting for 70% of total operating revenues in 2017). As a result, the company has kept the revenue growth momentum up for the past several years.

We believe the company to retain this positive trend in the coming quarters, backed by a strong market position, global reach, prudent acquisitions and a robust portfolio of proprietary products.

Shares of Cboe Global Markets have lost 17.4% year to date, underperforming the industry’s increase of 10.6%. Nonetheless, we expect market volatility lending momentum to trading volumes and benefits derived from Bats Global acquisition to help the stock rebound.

Cboe Global carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recently, the securities exchanges namely, CME Group Inc. CME, Intercontinental Exchange, Inc. ICE and MarketAxess Holdings Ltd. MKTX also reported their respective May volumes. While CME Group’s ADV of 20.1 million contracts per day improved 22% year over year, MarketAxess posted a trading volume of $141.2 billion. Plus, Intercontinental Exchange’s contracts per day averaged at 6.5 million, up 18.6% year over year.

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