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CME Group's (CME) Volumes for March & Q1 Solid, Increase Y/Y

Zacks Equity Research

CME Group Inc. CME reported average daily volume (ADV) for March 2020. The month recorded ADV of 32.1 million contracts per day, up 68% year over year on the back of increased contribution across all six product lines. Moreover, it increased 6.5% sequentially. Options volume increased 6.3 million contracts per day, up 54% year over year.

Energy volume of 3.6 million contracts increased 67% year over year. Interest rate volume of 15.7 million contracts per day increased 51% while Equity index volume of 8.9 million contracts per day increased 153%. Also, Metals volume of 0.9 million contracts per day increased 55% whereas Foreign exchange volumes surged 36% to 1.4 million contracts per day. Agricultural volume of 1.6 million contracts per day increased 16% year over year.

Q1 Volumes

CME Group also reported first-quarter 2020 volumes. The quarter recorded ADV of 27 million contracts, up 45% from first-quarter 2019.

Energy volume of 3.2 million contracts increased 38% from first-quarter 2019. Interest rate volume of 13.8 million contracts per day increased 34% while Equity index volume of 6.5 million contracts per day increased 106%. Also, Metals volume of 0.9 million contracts per day increased 58% whereas Foreign exchange volumes rose 22% to 1.1 million contracts per day. Agricultural volume of 1.5 million contracts per day increased 9% from first-quarter 2019.

Volumes at CME Group were backed by solid operating leverage, which helped it maintain a solid market share of about 90% in global futures trading and clearing services.

Expansion of futures products in the emerging markets plus an increase in non-transaction related opportunities as well as OTC offerings should continue to contribute modestly to its top-line growth in the years ahead.

Increasing electronic trading volume adds scalability and hence leverage to CME Group’s operating model. Efforts to expand and cross-sell through strategic alliances, acquisitions, new product initiatives and a strong global presence should also drive growth.

Shares of CME Group have underperformed the industry in a year’s time. The stock has gained 5.8%, underperforming the industry’s increase of 12.3%. Nevertheless, its solid fundamentals will likely help the stock retain its growth momentum. CME Group currently carries Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recently, securities exchanges, namely Intercontinental Exchange Incorporation ICE, Cboe Global Markets, Inc. CBOE and MarketAxess Holdings Ltd. MKTX also reported volumes.

Intercontinental Exchange’s ADV in March increased 56% to 9.4 million largely backed by improved Financial ADV, Commodities ADV and Energy ADV.

Cboe Global reported strong ADV for March. Total ADV of 12 million contracts increased 68% year over year due to strong performance across the business lines — Options, Futures, U.S. Equities and European Equities.

MarketAxess Holdings’ ADV of $269.5 billion for March 2020 was up 50.8% year over year.

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