What Is IntercontinentalExchange’s Derivatives Volumes Outlook?
IntercontinentalExchange‘s (NYSE:ICE) derivative trading volumes saw impressive growth in October, with its daily volumes coming in 32% above the year ago levels. Commodity volumes grew by 17%, and financial derivatives saw 53% growth. Among commodities, energy derivatives were 14% above the year-ago figure, largely due to fluctuations in oil prices. Moreover, the market saw increased volatility in oil prices due to oversupply in the market. Further, OPEC’s decision to cap production should increase the volatility in near term.
We have an $83 price estimate for ICE’s stock, which is slightly above the market price. Our interactive dashboard shows our expectations for the company’s Q4 derivative trading volumes; you can modify the key value drivers to see how they impact the company’s revenue.
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Due to multiple interest rate hikes in 2018, and the expectations of further rate increases in the year ahead, interest rate derivatives continued to attract investor attention. Consequently, ICE’s October volumes saw a 54% y-o-y increase. Moreover, we expect further growth in trading volumes with the Fed’s expectation of further hikes. Meanwhile, we expect that metals will likely remain in demand as a safe investment asset, leading to fairly steady volumes.
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