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

Metaverse Gaming NFT

DCentral Miami brings together all of Web3, NFT, DeFi, Metaverse

The world’s biggest Web3 meeting entitled DCENTRAL Miami is set to take place November 28-29, featuring a lineup of some of the biggest and most influential names in the blockchain space.

Digital Assets

Crypto ban expands across UK banks as Starling joins ‎crackdown

UK digital bank Starling has banned ‎all customer payments related to cryptocurrencies, another blow for the crypto traders ‎who recently saw a sizable number of banks deciding not to ‎finance the wobbly asset class.‎

Interviews

Markets Direct at FIA EXPO 2022: Traders know what they want from brokers

The FIA Expo 2022, one of the most prestigious events within the global derivatives trading industry, took place in Chicago on 14 & 15 November.

Interviews

FIA Expo 2022: TNS addresses public cloud limitations with hybrid infrastructure

November is the month of the FIA Expo, one of the largest futures and options conferences in the world, bringing together regulators, exchanges, software vendors, and brokers in one place: the Sheraton Grand Chicago Riverwalk. 

Retail FX

Italy’s regulator blacks out Finance CapitalFX, MFCapitalFX

Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) has shut down new websites in an ongoing clampdown against firms it accuses of illegally promoting investment products in the country.

Retail FX

Suspected leader of Honk Kong ramp-and-dump scam appears in court

A leader of a sophisticated ramp-and-dump scheme made his first court appearance in a Hong Kong court today, charged with market manipulation and various criminal offences. The case stems from an earlier joint operation of Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), and the local police. 

Institutional FX

Cboe’s James Arrante discusses growing demand for fixed income, FX algo

We caught up with James Arrante, senior director of FX & US treasuries product and business management at Cboe Global Markets, to uncover emerging trends in the FX and fixed income markets and learn more about the bourse operator’s recent initiatives.

Retail FX

Eurotrader acquires UK broker Petra Asset Management

Eurotrader Group has formally entered into the UK market with the acquisition of FCA-regulated broker, previously named Petra Asset Management Ltd. The new entity operates under the brand name Eurotrade Capital Ltd.

Inside View, Retail FX

The Game of Chess Continues – OPEC, China and the Oil Market

Over the past decade, the US has been complaining about the amount of power which the BRIC group, and specifically China, has on the global economy. BRIC stands for Brazil, Russia, India and China; these were the world’s fastest growing economies. Only in the past 10 months, the US has turned their attention toward OPEC due to the prices of fuel. Nevertheless, China seems to have a strong influence even over the price of crude oil.

<