Exchange Operators Monthly Note: June Trading Volumes For CME, NASDAQ OMX, ICE

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

Exchange operators CME Group (NASDAQ:CME), IntercontinentalExchange Group (NYSE:ICE) and NASDAQ OMX Group (NASDAQ:NDAQ) released their volume reports for June last week. CME reported a 15% annual rise in derivative trading, while ICE reported flattish growth over the prior year period. NASDAQ witnessed continued rise in European derivative trade volumes, while equity trading also picked after a sustained period of low trading volumes. Equity options trade volumes continued to be low for NASDAQ on its U.S. platform. Below we take a quick look on the individual metrics and June performances for the global 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 agricultural commodity contracts traded were at a record high of over 1.7 million trades per day through June. [1] Trade volumes for agricultural commodities were 48% higher than the comparable prior year period. The number of FX contracts traded were up by 29% y-o-y t0 987,000 trades per day in June.  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 42% annual rise in FX trade volumes.

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Similarly, the company witnessed a 13% 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 has bee high since the starting of the year, which is attributable to volatility in oil prices complemented by the launch of European natural gas contracts on CME Europe. [2] 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%). Although interest rate trade volumes fell sequentially to about 6.9 million contracts per day in June, volumes were still 8% higher than the year-ago period. Combined overall volumes for CME during the month were about 15% higher than the prior year period at 14.6 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.

See our full analysis for CME Group

NASDAQ OMX Group

NASDAQ OMX Group (NASDAQ:NDAQ) observed mixed activity for various products during the month. Derivatives trading volumes in Europe continued to impress, with NASDAQ OMX reporting a 15% y-o-y rise in the number of options and futures traded to 7.5 million traded contracts in June. [3] However, the number of equity options traded in the U.S. remained low, with June volumes over 12% lower than the comparable prior year levels at 71 million contracts traded. 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. The trend continued through the first two months of Q2, with the number of shares traded in the U.S. in April and May falling by 10% over the year ago period to 48 billion. However, the trend reversed in June, with the number of shares traded rising by over 10% y-o-y to 26 billion shares traded through the month.

  • Trefis has a $46 price estimate for NASDAQ OMX’s stock, translating into a $7.7 billion market cap.
  • The Trefis price estimate implies an 8% discount to the current market price, which has risen by about 5% since the beginning of the year.

See our full analysis for NASDAQ OMX

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 remained suppressed. Average daily volume (ADV) for energy derivatives through June was up by 6% y-o-y to 2.2 million contracts traded per day. [4] Similarly, the combined ADV for agricultural commodities and metals was about 13% higher than the year-ago period at 420,000 trades per day. Moreover, FX trading volumes rose by a significant 120% over the prior year period to 62,000 trades per day. On the other hand, the number of short-term interest rates contracts traded fell by 21% to 1.5 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. The 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

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