CME Group's (CME) May Volume Figures Strong, Shares Rise

CME Group Inc.’s CME average daily volume (ADV) of 20.1 million contracts per day for May 2018 improved 22% year over year. A record daily volume of 51.9 million contracts traded on May 29 largely drove this upside. Shares gained 1.7% in the last two trading years reflecting investor optimism.

During last month, Options volume expanded 5% year over year to average 3.6 million contracts while interest rate volume surged 30% year over year and averaged at 11.6 million contracts.

Metals volume of 0.7 million contracts per day rose 25% whereas Energy volume of 2.7 million contracts inched up 1%. While Interest rate volume of 11.6 million contracts jumped 30%, Foreign exchange volume ascended 34% to about 1.1 million contracts. Also, Agricultural volume of about 1.4 million contracts climbed 22% year over year. In addition, Equity index volume of 2.6 million contracts increased 12%.

Recently, securities exchanges, namely MarketAxess Holdings Ltd. MKTX, Intercontinental Exchange, Inc. ICE and Nasdaq Inc. NDAQ posted their respective monthly volumes. While Nasdaq’s May ADV of 147.6 million contracts nudged up 0.9% year over year, MarketAxess has reported a trading volume of $141.2 billion for May 2018. Intercontinental Exchange’s contracts per day averaged at 6.5 million, up 18.6% year over year.

Shares of CME Group have outperformed the industry year to date. While the stock has rallied 17.2%, the industry has registered 8.3% growth. The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.     

 

CME Group’s improving volumes are cushioned by a solid operating leverage, helping it maintain an enormous market share. The company holds about 90% market share of the global futures trading and clearing services. Expansion of futures products in the emerging markets plus a rise in non-transaction related opportunities and over-the-counter offerings should continue to contribute modestly to its top-line growth in the years ahead.

The company is also deepening its focus on over-the-counter clearing services with respect to interest rate swaps and foreign exchange. Efforts to expand and cross-sell via strategic alliances, judicious acquisitions, product launches as well as widening the company’s global footprint should also drive its overall growth.

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