Why CME Group Stock Rose 12% in August

What happened

Shares of CME Group (NASDAQ: CME) climbed more than 10% last month, according to data provided by S&P Global Market Intelligence, following the release of the exchange operator's second-quarter results.

So what

CME Group's revenue jumped 20% year over year, to $1.3 billion. The gains were fueled by strong growth in the exchange-giant's international markets. CME Group's trading volumes in Latin America, Asia, and Europe leapt 81%, 28%, and 22%, respectively. 

"We delivered the second-highest quarterly average daily volume in our history, with 21 million contracts per day, driven in part by record trading volume outside the U.S. and strong options activity, while maintaining our focus on expense control," Chairman and CEO Officer Terry Duffy said in a press release. 

People working at a trading desk.

Trading volumes on CME Group's exchanges rose sharply in the second quarter. Image source: Getty Images.

Acquisitions also contributed to the gains. NEX, the trading-platform operator that CME Group purchased in 2018, generated $187 million in revenue during the second quarter. 

All told, CME Group's non-GAAP net income -- which excludes acquisition and restructuring, along with certain other charges -- increased 7%, to $632 million, or $1.76 per share. That was above Wall Street's estimates for adjusted earnings per share (EPS) of $1.75. 

Now what

CME Group's futures and options exchanges help companies and investors manage risk. Demand for CME's risk management tools is likely to continue to rise in the coming years, particularly during times of economic distress. Market volatility is thus a boon to CME Group, and its stock, therefore, can provide ballast to its shareholders' portfolios during market declines.

As such -- and with CME Group's shares having pulled back about 5% in far in September -- investors may want to consider buying some of the exchange-titan's stock today.

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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends CME Group. The Motley Fool has a disclosure policy.

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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