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

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CME Group Inc.’s (CME - Free Report) 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 - Free Report) , Intercontinental Exchange, Inc. (ICE - Free Report) and Nasdaq Inc. (NDAQ - Free Report) 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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