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CME Group's (CME) Q1 Volumes Mark Highest Quarterly ADV

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CME Group Inc . CME has reported record volumes for the first quarter of 2018, marking the highest average daily volume in a quarter despite market volatility. ADV of record worth 22.2 million contracts per day improved 29% year over year. Of this, Options volume expanded 31% year over year to average 4.9 million contracts while electronic options surged 45% year over year and averaged at 3.1 million contracts. The company witnessed an increase in ADV in five of six product lines. However, shares of the company lost 0.05% in the last trading session.

Metals volume of 0.7 million contracts per day rose 39% whereas Energy volume of 2.8 million contracts climbed 10%. Interest rate volume of 11.9 million contracts jumped 30% and Foreign exchange volume ascended 23% to about 1.1 million. Agricultural volume of about 1.6 million contracts climbed 26% year over year. Only Equity index volume of 4.1 million soared 48%.

High volumes in the first quarter were driven by better numbers in each month. ADV for March grew 23% to 20.8 million contracts per day, led by an increase in ADV across five of six product lines.

Recently, securities exchanges, namely MarketAxess Holdings Ltd. MKTX , CBOE Holdings Inc. CBOE and Intercontinental Exchange, Inc. ICE posted respective monthly volumes. While CBOE Global Markets' March ADV of 8.5 million contracts declined about 18% year over year, Intercontinental Exchange's volumes decreased 11.3% to 5.9 million contracts. MarketAxess has reported a trading volume of $152.3 billion for March 2018.

CME Group is scheduled to report first-quarter 2018 results before market open on Apr 26. The Zacks Consensus Estimate for the bottom line is pegged at $1.61 on revenues of $965.6 million, reflecting 31.9% and 3.9% respective year-over-year growth.

Our proven model shows that the company is likely to deliver a positive surprise with the right combination of a favorable Zacks Rank #3 (Hold) and an Earnings ESP of +1.56%.

Shares of CME Group have outperformed the industry year to date. While the stock has gained 11.4%, the industry has registered 5.6% growth.

CME Group's improving volumes are cushioned by a solid operating leverage, helping it maintain an enormous market share. The company holds about 90% market share of the global futures trading and clearing services. Expansion of futures products in the emerging markets plus a rise in non-transaction related opportunities and OTC (over the counter) offerings should continue to contribute modestly to top-line growth in years ahead. Efforts to expand and cross-sell via strategic alliances, judicious acquisitions, product launches as well as widening global footprint should also drive growth.

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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.


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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