Trading venues from across the globe have been piling in positive operating metrics as traders enter the final quarter of the year. The largest Options exchange in the US has reported strong earnings in its latest data release.
Overall, the venue benefited from a recent outburst in activity that boosted trading volumes and revenues.
The CBOE’s earnings beat analysts’ estimates as a post-summer revival in global markets supported trading volumes. The US-based exchange reported that its net income in the third-quarter increased by 18% to $48.1 million, (or 57 cents per share), from $41 million, (or 47 cents), from figures reported a year earlier. The venue also reported its adjusted earnings, which were also 57 cents per share. The highlight for the CBOE was its operating revenue, which rose to $148.9 million, up from $136.7 million a year earlier.
Edward T. Tilly, CBOE Holdings Chief Executive Officer, spoke about the results in a statement, he said: “We are pleased to start the fourth quarter with record trading volume for the month of October in VIX options and VIX futures, driven by heightened market volatility and our strategic initiatives to broaden our customer base and extend our reach globally, particularly through our extended trading hours for VIX futures.”
The earnings reflect a change in market sentiment coming off a bleak summer, as well as from the revised strategy the venue implemented in August to bolster activity by reducing commissions and fees. The CBOE filed its trading volumes data in the Q3 report.
Its average daily volumes during the quarter rose to 4.952 million contracts from 4.615 million a year earlier. The increase comes after CBOE said in August that it would cut expenses due to weak trading volumes during the second quarter.
“Our strong third-quarter results reflect improved trading volume both sequentially and year-over-year across each of our product categories, as more normal levels of volatility returned to the market,” added Mr Tilly.
The CBOE’s flagship VIX index, a popular measure of the implied volatility of S&P 500 index options, . The VIX is widely earmarked as the fear index of the markets as it measures investor sentiment and represents one measure of the market’s expectation of volatility over a 30-day period.
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