Exchange Operators Month In Review: May Trading Volumes For CME, NASDAQ, ICE

+2.03%
Upside
137
Market
140
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ICE: Intercontinental Exchange logo
ICE
Intercontinental Exchange

Global exchange operatorsIntercontinentalExchange Group (NYSE:ICE), CME Group (NASDAQ:CME) and NASDAQ OMX Group (NASDAQ:NDAQ) released their volume reports for May earlier this month. Both ICE and NASDAQ witnessed a year-on-year decline in trade volumes during the month while CME reported an 8% annual rise in derivative trading. NASDAQ witnessed continued rise in European derivative trade volumes, while equity trading continued to be low. Here’s a quick roundup on the individual metrics and May performances for the exchange operators.

CME Group

CME Group (NASDAQ:CME) saw solid growth in trading volumes for commodities, foreign exchange (FX) and energy derivatives. The number of FX contracts traded were up by 50% y-o-y t0 880,000 trades per day in May. ((CME Group Monthly Trade Metrics For May, CME Group Investor Relations, June 2015)) The company witnessed high FX trading volumes through Q1 at 954,000 trades per day, which was about 17% higher than the prior year period. This has continued through Q2 as well, with a nearly 50% annual rise in FX trade volumes. Similarly, the company witnessed a 24% annual rise in energy derivative trading during the month with an average volume of over 1.7 million contracts traded per day. The average daily volume (ADV) for energy derivatives was about 25% higher y-o-y through the March quarter at 2.1 million contracts per day. High trading activity for energy derivatives in 2015 thus far is attributable to volatility in oil prices complemented by the launch of European natural gas contracts on CME Europe, in addition to the existing rise in trading volumes of energy contracts in December 2014. [1] Moreover, after a slow start to Q2 with low trade volumes for interest rate derivatives, activity picked up in May. CME registered an average of 7.8 million interest rate contracts traded per day through May, up both sequentially (+50%) and annually (+3%). Combined overall volumes for CME during the month were about 8% higher than the prior year period at 14.1 million contracts traded per day.

  • Trefis has an $87 price estimate for CME’s stock, implying a market cap of $29.3 billion.
  • The Trefis price estimate is about 10% lower than the current market price which has risen by about 7% since the beginning of 2015.
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See our full analysis for CME Group

IntercontinentalExchange Group

Similar to CME’s trade volumes, IntercontinentalExchange Group (NYSE:ICE) also observed high trade volumes for energy derivatives, agricultural commodities and FX products while volumes of interest rate (short-term) and equity derivatives have been suppressed. Average daily volume (ADV) for energy derivatives through May was up by 16% y-o-y to 2.2 million contracts traded per day, while volumes in Q1 were up by 16% y-o-y to nearly 2.4 million contracts traded per day. [2] Similarly, the combined ADV for agricultural commodities and metals was about 14% higher than the year-ago period at 309,000 trades per day. Moreover, FX trading volumes rose by a massive 181% over the prior year period to 56,000 trades per day. On the other hand, the number of short-term interest rates contracts traded fell by over 35% to 1.1 million trades per day. The total number of short-term interest rate derivatives traded on ICE’s platforms through the March quarter were also down by 30% y-o-y to 1.3 million contracts per day primarily due to continuing low interest rate policies in Europe and tougher year-over-year comparisons. Resulting revenues generated by ICE fell by about 30% y-o-y to $56 million for the March quarter.

See Our Full Analysis For IntercontinentalExchange Group

NASDAQ OMX Group

NASDAQ OMX Group (NASDAQ:NDAQ) observed mixed activity for various products during the month. The company reported a decline in derivatives trading volumes in the U.S, with the number of equity options traded falling by 13% y-o-y to 67 million contracts traded in May. The decline in volumes was similar to Q1 levels, when equity derivatives trading volumes on NASDAQ’s platform were about 6% lower than the comparable prior year period at 251 million contracts.Cash equity trade volumes in the U.S. through Q1 were about 5% lower than the comparable prior year period at a total of 83 billion shares traded. Keeping up the trend, the number of shares traded in the U.S. through May fell by 6% over the year ago period to 23 billion during the month. [3] However, derivatives trading volumes in Europe continued to impress. The number of options and futures traded on NASDAQ’s European platforms were about 7% higher than the prior year period at 7.5 million traded contracts in May.

  • Trefis has a $46 price estimate for NASDAQ OMX’s stock, translating into a $7.7 billion market cap.
  • The Trefis price estimate implies a 10% discount to the current market price, which has risen by over 5% since the beginning of the year.

See our full analysis for NASDAQ OMX

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Notes:
  1. CME Group Announces the Launch of a Suite of European Natural Gas Contracts on CME Europe, Market Watch, December 2014 []
  2. IntercontinentalExchange Group Monthly Volumes For May, ICE Group Investor Relations, June 2015 []
  3. NASDAQ OMX Monthly Trade Metrics For May, NASDAQ OMX  Investor Relations, June 2015 []