Shares of CME Group Inc. CME gained 2.3% in the last trading session after it reported a solid average daily volume (ADV) for 2017. ADV of record of 16.3 million contracts per day improved 4% year over year. Of this, Options volume improved 11% year over year to average 3.5 million contracts per day while electronic options surged 25% year over year and averaged at 2.2 million contracts per day. The company witnessed an increase in ADV in five of six product lines.
Metals volume of 0.6 million contracts per day expanded 23% whereas Energy volume of 2.6 million contracts climbed 6%. Interest rate volume of 8.2 million contracts per day rose 6% and Foreign exchange volume improved 7% to about 0.8 million. Agricultural volume of about 1.4 million contracts per day increased 2% year over year. Only Equity index volume of 2.7 million decreased 12%.
For the fourth quarter of 2017, ADV were 15.9 million contracts, declining 2% year over year as three product lines witnessed lower volume. Interest Rates, Equity Indexes and Energy volumes decreased 4%, 8% and 4%, respectively. However, an improvement of 7% each in Foreign exchange and Agricultural Commodities volume and a 26% rally in Metals volume limited the downside.
Recently, securities exchange MarketAxess Holdings Ltd. MKTX also posted their 2017 volumes. MarketAxess’ trading volume for 2017 was $104.4 billion.
Shares of CME Group have outperformed the industry in a year. While the stock has gained 26.9%, the industry has registered 26.7% growth.
CME Group’s improving volumes are driven 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 increase in non-transaction related opportunities and OTC offerings should continue to contribute modestly to the top-line growth in years ahead. Efforts to expand and cross-sell through strategic alliances, acquisitions, new product initiatives as well as global presence should also drive growth.
CME Group carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
A few other stocks worth considering from the finance sector are Legg Mason, Inc. LM and Federated Investors Inc. FII, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Legg Mason is a publicly owned asset management holding company. The company delivered an average four-quarter beat of 23.46%.
Federated Investors is a publicly owned investment management company. The company came up with an average four-quarter positive surprise of 4.47%.
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