Cboe Global Markets' March Volumes Increase, Shares Gain

Shares of Cboe Global Markets, Inc. CBOE gained nearly 0.4% in the last trading session after it reported a robust average daily volume (ADV) for March 2018. Total ADV of 8.5 million contracts improved nearly 17.4% year over year.

Total contracts for the month were 177.6 million, increasing nearly 7.2% year over year. Of this, options contracts rose 7.7% year over year to 171.6 million while futures contracts saw a decline of 4.2% to 5.9 million from the year-ago tally. While Options ADV was 8.2 million, Futures ADV was 0.3 million.

Subsequently, ADV of the U.S. Equities Matched came in at 1.5 million shares last month, up 11.9% year over year whereas the European Equities Matched expanded 5.4% year over year to €10.7 billion. The Global FX Matched improved 28.3% to nearly $38.1 billion.

Cboe Global Markets has issued its first-quarter 2018 selected revenue per contract (RPC) guidance wherein the average RPC is estimated to be in line with the tally of the current year’s first two months ending Feb 28.

Banking on the continued increase in transaction fees (accounting for 70% of total operating revenues in 2017), Cboe Global Markets has been witnessing a rise in trading volumes over a considerable period of time. As a result, the company has been displaying revenue growth over the past few years.

We believe the company 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.

Cboe Global Markets is scheduled to report first-quarter 2018 results before the market opens on May 4. The Zacks Consensus Estimate for quarterly earnings is pegged at $1.20 per share, reflecting 53.9% year-over-year growth.

Our proven model does not conclusively show that the company is likely to deliver a positive surprise. This is because although the stock has an Earnings ESP of +5.44%, its Zacks Rank #4 (Sell) decreases the predictive power of ESP, thus leaving surprise prediction inconclusive. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Cboe Global Markets have noticeably outperformed the industry in a year’s time. The stock has surged 37.6% compared with the industry’s growth of 28.8%. We expect both bottom and top-line improvements along with a diversified product portfolio and expansion moves to boost growth. Also, a solid capital position might drive the shares higher in the near term.   

 

Recently, securities exchanges like CME Group Inc. CME, Intercontinental Exchange, Inc. ICE and MarketAxess Holdings Inc. MKTX have also reported respective volumes. While Intercontinental Exchange’s average daily volume declined 11.3% to 5.9 million contracts, MarketAxess logged a trading volume of $152.3 billion, which contracted 1.9% year over year. CME Group registered a record ADV of 22.2 million contracts per day, improving 29% year over year.

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