Cboe reports higher Q2 revenues, but profitability slips

abdelaziz Fathi

Cboe Global Markets, Inc. (Cboe: CBOE) today released a set of robust financial metrics for second quarter 2021, which showed a 18 percent YoY jump in revenues, according to a company press release.

The Chicago-based exchange benefited from the heightened volatility over the last three months, having collected $350.6 million in net revenue compared to $296.9 million in the Q2 2020. The solid year-over-year growth primarily reflects notable increases in net transaction and clearing fees, as well as access and capacity fees.

Cboe and other exchanges operators make the most of their revenue through transaction fees, which rise and fall in tandem with trading volumes. As such, the higher Q2 volatility and overall rise in options turnover helped push transaction fees to increase at Cboe versus the second quarter of 2020.

In the reported quarter, Cboe’s FX revenue rose slightly to $13.8 million or less than one percent from $13.7 million in the year prior. Cboe’s institutional spot FX platform saw its average daily trading volumes amounting to $32.5 billion for the quarter, up 2 percent from Q2 2021. Net capture per one million dollars traded was $2.71 for the quarter, down 2 percent compared to $2.77 in Q2 2020.

In addition, Cboe reported total operating expenses at $160.6 million for Q2 2021 versus $135.2 million in the same period 2020. The higher expenses were said to reflect increases in compensation and benefits, royalty fees, professional fees and outside services.

According to the update, adjusted operating expenses, which exclude acquisition-related expenses and other unusual items were 128.3 million, up 34 percent compared with $95.8 million in the second quarter of 2020.

Cboe has recently expanded its business operations with a raft of new acquisitions. Earlier this year, the exchange operator completed its takeover of dark-pool stock trading platform BIDS Trading, the largest block-trading ATS by volume in the US, for an undisclosed price.

The deal for the alternative trading system (ATS) provides Cboe with further inroads into the expanding world of off-exchange trading.

The acquisition of BIDS Trading came shortly after Cboe bought MatchNow from Virtu Financial. The broker-neutral dark pool commanded more than 5 percent of total stock trading and 65 percent of anonymous trades in Canada where over $5 billion worth of equities exchange hands each day.

All told, Cboe’s net income allocated to common stockholders in Q2 2021 fell to $105 million, or $0.98 per diluted share, down from $113 million and $1.03 in the second quarter of 2020.

Read this next

Digital Assets

Masa and LayerZero: Bridging Blockchains for Data Sovereignty

Masa Network is poised to revolutionize the personal data landscape with its upcoming launch as a cross-chain platform, making it accessible on a variety of blockchains right from the start.

Digital Assets

Big Time Generates over $100M in Revenue since Preseason

Innovative game developer Big Time Studios announces that its highly anticipated free-to-play multiplayer action/MMO RPG Big Time, has generated $100M in revenue. According to the team, players transacted a total volume of over $230M, without selling a single token.

Digital Assets

Centralized exchanges are 10 times more popular than DEXs in Western Europe

Western European traders are found to prefer centralized exchanges over decentralized ones as CEX traffic outpaces DEXs by a factor of ten.

Market News

Stock Market Analysis: Is NVDA Losing Its Leadership?

Since the beginning of the week, the S&P 500 Index (US500) has seen a modest increase of about 0.58%, whereas NVDA’s share price has experienced a decline of approximately 3.8%. This recent divergence raises concerns among Nvidia stock investors — could it signify a loss of NVDA’s market leadership?

Industry News

ESG: Australian regulator wins first greenwashing court case against Vanguard

Vanguard admitted that a notable portion of the securities within both the Index and the Fund did not undergo the promised ESG scrutiny.

Fintech, Uncategorized

BitMEX integrates HALO from Solidus Labs for cross-market surveillance

“The recent approval of the Spot Bitcoin ETF has piqued the market’s interest. As a result of price volatility, the trading volumes for crypto derivatives have gone up substantially. HALO, with its advanced technology and crypto-native detection architecture, will enable BitMEX to smoothly and safely scale trade surveillance across its increased trading volumes and provide the necessary safeguards for new product launches.”

Reviews

IUX Broker Review

IUX, recently rebranded from IUX Markets, stands as a multi-asset Forex broker recognized for its regulatory compliance across various jurisdictions.

Industry News

Horizon Software rebrands to Horizon Trading Solutions

“Horizon Trading Solutions has seen accelerated global growth over the past year to meet the rising demand for our trading solutions and built-for-purpose technology offering. The choice to rebrand represents a key part of this development, while maintaining our heritage and history in the industry.”

Market News

USDJPY has surged to levels last witnessed in 2022. Should we consider opening a short position?

The recent resurgence of the US dollar has propelled USD/JPY to new heights, touching levels not seen since 2022. This surge comes against the backdrop of stable short-term yields and ongoing economic data that fails to signal a significant slowdown, prompting questions about the extent of current monetary easing measures.

<