Cboe reports second consecutive month of higher FX volume
Cboe’s institutional spot FX platform has reported its trading volume for the month of June 2023. This latest update indicates a continued upward trend following a modest recovery in May, showing growth for the foreign exchange franchise.
Cboe FX disclosed a total trading volume of $965 billion, up 3 percent on a month-over-month basis from $939 billion in May. In addition, this figure was higher by 11 percent year-over-year when weighed against $875 billion in June 2022.
The exchange’s institutional FX trading venue saw its average daily trading volumes amounting to $43.9 billion in June 2023, up 7.6 percent month-over-month from $40.8 billion the previous month.
On a year-over-year basis, the ADV numbers released by Cboe FX, formerly Hotspot, illustrated stronger performance, rising by 10.6 percent when weighed against $39.7 billion a year earlier.
In the second quarter, Cboe’s FX revenue rose to $18.5 million or eight percent higher from $17.1 million in the year prior. Cboe’s institutional spot FX platform saw its average daily trading volumes amounting to $45 billion for the quarter, up 7 percent from Q1 2022. Net capture per one million dollars traded was $2.64 for the quarter, down 1 percent compared to $2.67 in the previous year’s quarter.
Cboe’s foreign exchange franchise saw its market share at a new all-time high of 19.0 percent in the three months through March compared to 17.3 percent in Q1 2022. According to the update, the record figure was driven by increased client adoption of our diverse set of FX order types and trading protocols.
Per its recent report, the Chicago-based exchange benefited from the heightened volatility over the last three months, having collected $471.4 million in net revenue compared to $418 million in Q1 2022. 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 Q1 volatility and overall rise in options turnover helped push transaction fees to increase at Cboe versus the first quarter of 2022.
Other business highlights show that options revenue was up 28 percent at $280.7 million, primarily due to higher trading volumes, which boosted its net transaction, clearing and market data fees.