Earnings and volume reporting season continues to kick into gear this week as IntercontinentalExchange has just reported its 3rd quarter earnings report. The derivatives exchange reported diluted earnings of $1.79 a share on revenues of $323 million. Expectations were for $1.72 and $325.1 million for the quarter. The top line revenue figure was a 5% below Q3 2011. Futures volumes also fell 4% for the quarter to an average daily volume (ADV) of 1.5 million contracts. The IntercontinentalExchange blamed the revenue shortfall on a decline in volumes in its CDS and North American natural gas products. The ICE’s earning and volume report compares favorably to the CME Group which reported last month that its volumes were 26% lower than last year.
In a simultaneous release, the ICE also reported its October volumes. Overall ADV for October for futures and options products combined was 3,398,912 which was an increase of 2% from October 2011. For FX products, the results weren’t as positive as ADV for the unit dropped to 20,242 for the month, a 42.7% drop from October 2011. In year to date figures, FX is contract volume is 20.7% lower. Overall, the ICE’s volumes were steadied by increased trading in the exchange’s Energy products with its Financial segment across the board declines.
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In its FX unit, the segment continues to be a ‘one trick pony’ with the Dollar Index product accounting for the bulk of trading activity. In regards to what the exchange is doing to promote the rest of its currency products Forex Magnates spoke to Scott Brusso FX Sales Director at IntercontinentalExchange in September.
The interview was part of a larger Q&A on the FX Futures market but his answer to this question is especially related to today’s release and continued declines in FX volumes. According to Brusso, “All of the benefits of trading the Dollar Index on ICE are available for traders of ICE’s currency pair futures: state of the art technology; economical prices for screen trading, blocks and EFPs; pricing granularity and TAS trading. The challenge is to make sure this message gets to the universe of currency traders. ICE also has created a network of liquidity providers to support its currency pairs drawn from some of the most active OTC and FX market-makers, and is actively working to increase and deepen its support network. ICE also has created a number of incentive programs that are being offered to currency market participants to encourage market participation. We believe the more understanding there is of the ICE advantages, the more interest we’ll find in the ICE currency pair offerings.”