CME Group (CME) Schedules Launch of Micro E-mini Options

CME Group Inc. CME declared options on its Micro E-mini S&P 500 and Micro E-mini Nasdaq-100 futures contracts. The new options, following the fulfillment of regulatory approval, will be available for trading on Aug 31.

E-mini S&P 500 futures and options are based on the underlying Standard & Poor’s 500 stock index. These electronically traded futures contracts are one fifth the size of standard S&P futures. E-mini Nasdaq-100 futures contract is $20X the Nasdaq-100 index and has a minimum tick of 0.25 index points. It offers liquid benchmark contracts to manage exposure to the 100 leading non-financial U.S. large-cap companies that make up the Nasdaq-100. Both E-mini S&P 500 and E-mini Nasdaq-100 futures and options of CME Group are among the most actively traded equity index products in the world.

Micro E-mini Equity futures were launched in May 2019. These aid market participants with greater versatility to execute equity trading strategies, scale index exposure up or down or more precisely hedge existing equity portfolio positions. Recently, options were offered on the micro-sized equity futures contracts following its success and growing customer demand. These are expected to offer more flexibility even in the present economic uncertainty.

The new options on futures on these two indices will be 1/10th the size of their E-mini options counterparts. Their listing cycle will comprise five Friday weekly options, three end-of-month options and two quarterly options contracts.

Micro E-mini Equity futures have become the most successful new products since their launch. Across the four indices — S&P 500, Nasdaq-100, Russell 2000 and Dow Jones Industrial Average — 300 million cumulative contracts are traded. Of the total trading volume, 28% originates outside the Unites States. More than 1,60,000 unique accounts have traded these contracts.

In the first quarter of 2020, average daily contract volume included approximately 1.4 million in Micro-E-mini equity index contracts. Average daily contract volume for E-mini S&P 500 futures and options increased 96% and the same for E-mini NASDAQ 100 futures and options surged 163% year over year.

CME Group boasts the largest futures exchange globally in terms of trading volume as well as notional value traded. CME group leads with about 90% market share of the global futures trading and clearing services.

This Zacks Rank #4 (Sell) largest futures exchange in the world in terms of trading volume as well as notional value traded has declined 17.5% year to date compared with the industry’s decline of 2.7%. Nonetheless, the company’s policy to ramp up its growth profile and capital position should help shares regain momentum.

Stocks to Consider

Some better-ranked stocks from the finance sector include MarketAxess Holdings Inc. MKTX, Equifax Inc. EFX and Fleetcor Technologies, Inc. FLT. While MarketAxess sports a Zacks Rank #1 (Strong Buy), Equifax and Fleetcor Technologies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MarketAxess operates an electronic trading platform that enables fixed-income market participants to trade corporate bonds and other types of fixed-income instruments worldwide. It surpassed estimates in three of the last four quarters, with the average surprise being 1.09%.

Equifax provides information solutions and human resources business process outsourcing services for businesses, governments, and consumers. It surpassed estimates in each of the last four quarters, with the average surprise being 4.23%.

Fleetcor Technologies operates as a business payments company that simplifies the way businesses manage and pay expenses. It surpassed estimates in each of the last four quarters, with the average surprise being 3.26%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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