Trading volumes were generally higher year-on-year despite lower volatility

Volatility metrics

Average volatility, as measured by the VIX, is currently 14.7 in the second quarter of the year, down 11% from 16.5 in the second quarter of 2023 but up 7% from 13.7 in the first quarter of 2024. In addition, realized volatility , measured by daily changes in the closing value of the S&P index 500 tracks in 14.3 In the second quarter of the year, down 9% from 15.7 in the second quarter of 2023 but up 4% from 13.7 in the first quarter of 2024.

US stocks, stock options, and index options

Meanwhile, US stock options volumes total 11.6 billion per day, up 8% from 10.8 billion in 2Q23 but down 1% from 11.8 billion in 1Q24. Additionally, industry stock options volumes total 41 million per day, up 5% from 2Q23 but down 5% from 43.3 million in 1Q24. Industry index options volumes are currently averaging 4.1 million per day in 2Q24, up 11% versus 3.7 million in the second quarter of 2024. 2Q23 but down 1% from 1Q24.

Exchange storage units

Nasdaq, Inc. (Nadaq)

US equity volume on Nasdaq averaged 1.8 billion per day in 2Q24, down 1% compared to 2Q23 but down 5% compared to 1Q24. Based on QTD ADV, Nasdaq lost 144 points basis of market share in US stocks compared to Q2 2023 and 65 basis points of market share compared to Q1 2024. In addition, the average volume of US stock options on Nasdaq is 11.9 million contracts per day, down 2% compared to In the second quarter of 2023 and by 6% compared to the first quarter of 2024. Based on the QTD ADV, Nasdaq lost 176 basis points of market share in US stock options compared to the second quarter of 2023 and 31 basis points of market share compared to the first quarter of 2023. 2024.

CBOE Global Markets Inc (kbo)

Cboe’s US equity volume averaged 1.4 billion per day in 2Q24, down 1% compared to 2Q23 but down 10% compared to 1Q24. Based on QTD ADV, Cboe lost 102 basis points of market share in US stocks compared to 2Q23 and 113 basis points of market share compared to 1Q2024. The decline in market share makes sense, given that the CSE stated in its Q4 2023 earnings call that He implemented some pricing changes in US stocks designed to increase revenue collection (at the expense of potential market share). Additionally, Cboe’s U.S. equity options volume averages 10.1 million contracts per day, down 5% compared to Q2 2023 and down 6% compared to Q1 2024. Based on QTD ADV, Cboe lost 255 basis points of US equity options market share compared to 2Q23 and 29 basis points of market share compared to 1Q24. Meanwhile, Cboe index options volumes averaged 4.1 million contracts per day in 2Q24, Up 10% year over year but down 1% from Q1 2024. Additionally, CME futures volumes are averaging 262,000 per day, up 33% from Q2 2023 and up 19% from Q2 levels The first of 2024, while average foreign exchange trading volumes reach $45.7 billion per day, an increase of 8% from the second quarter of 2023 and an increase of 1% from the first quarter of 2024.

Intercontinental Exchange, Inc (ice)

InterContinental Exchange’s U.S. equity volume averaged 2.4 billion per day in Q2 2024, up 11% compared to Q2 2023 but down 11% compared to Q1 2024. Based on QTD ADV, InterContinental Exchange gained 52 points basis of market share in US stocks compared to Q2 2023, but lost 4 basis points in market share compared to Q1 2024. In addition, InterContinental Exchange’s average US stock options volume is 9.2 million contracts per day, Up 19% compared to Q2 2023 but down 2% compared to Q1 2024. Based on QTD ADV, InterContinental Exchange gained 278 basis points of market share in U.S. equity options compared to Q2 2023 and 87 basis points of market share Compared to the first quarter of 2024. Regarding ICE futures volumes, the average energy contract volume is 4.2 million contracts per day, up 28% year-on-year but down 3% compared to the first quarter of 2024, while the average Agricultural Materials and Metals Contracts 0.5 million contracts per day, down 10% compared to Q2 2023. Down 12% compared to Q1 2024, tracking financial data volume 3.0 million contracts per day, up 36% year over year but down 7% compared to At the levels of the first quarter of 2024.

CME Group Company (poison)

CME Group’s futures and options pool totaled 26.2 million contracts per day in 2Q24, up 15% year over year but down 1% from 1Q24 levels. By product line, interest rate futures average Options are 13.5 million contracts per day, up 20% year-over-year but down 2% from the first quarter of 2024, and stock contracts average 6.7 million contracts per day, up 7% year-over-year but down 3%. As of Q1 2024, FX contracts averaged 0.9 million per day, up 4% year over year but down 5% from Q1 2024, and agricultural contracts averaged 1.8 million per day, unchanged year over year. YoY but up 10% from Q1 2024. Energy contracts averaged $2.4 million per day, up 15% year over year and roughly flat with Q1 2024 levels. Metals contracts averaged $1.0 million per day. An increase of 55% year-on-year and an increase of 41% over 1Q24 levels.

What does this mean for exchanges?

In terms of how the above translates into revenue for exchanges, CME Group’s performance in 2Q24 was the strongest compared to what the company reported in the prior year period, indicating an upward trend for 2Q24 transaction revenue on a yearly basis. InterContinental Exchange shows the second largest uptick compared to last year’s transaction revenue results – driven primarily by year-over-year outperformance in Intercontinental Exchange futures volumes. Cboe shows the highest potential year-over-year improvement in transaction-related revenues – driven primarily by strength in index options and futures volumes. Nasdaq’s performance on transaction revenue appears to be relatively in line with what was reported a year ago, based on QTD volumes.

Based on QTD volume information, I would suggest buying CME Group and Cboe in anticipation of upward revisions to their transaction revenue estimates, especially given the recent performance of these two companies compared to other exchanges (CME Group is down 7% over the past 3 years). months and the Central Bank of Kuwait decreased by 9%). I would also consider buying ICE given it is down 4% in the past three months despite the possibility of a 15% year-over-year increase in transaction revenue in Q2. I would not suggest making changes to my position in Nasdaq based on Q4 volume information, as transaction revenues will likely remain unchanged year over year (note that Nasdaq has less exposure to transaction-based revenues which is part of the reason I maintain my strong position). Buy rating on stocks).