CBOE Authorizes Share Repurchase of an Additional $100m

CBOE has announced the authorization of an additional $100m share repurchase, adding to last year's $57.5m in reserves.

The Chicago Board Options Exchange (CBOE) Holdings, Inc. (NASDAQ: CBOE), the largest operator of the US equity options market, has announced a share repurchase authorizing up to $100 million, along with a freshly raised cash dividend, according to a CBOE statement.

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CBOE’s Board of Directors has authorized a share repurchase of an additional $100 million of its outstanding common stock, with immediate effect. Share repurchases are typically common procedure for publicly traded companys, and typically illustrates that a given company’s executive board feels its stock is undervalued.

Specifically, CBOE will add the newly repurchased share value to an already available $57.5 million of availability that had been left in reserves following the group’s repurchase authorization from the 2015 fiscal year, ending December 31, 2015.

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For those keeping track, CBOE has already been quite active in this realm over the past four years, repurchasing almost ten million shares of common stock (9,999,615 shares), at an average price of $44.25, or $442.5 million total. By comparison, CBOE shares are currently trading at $61.80 ahead of the US open Thursday.

CBOE investors were also given an early 2016 boost with the scheduled announcement of a cash dividend of $0.23 per share of common stock, payable on March 18, 2016. The cash dividend was hiked in H2 2015, when it rose tepidly to $0.23 from $0.21.

According to CBOE Holdings Chief Executive Officer (CEO) Edward T. Tilly in a recent statement on the share repurchase: “We are pleased to issue a 23rd consecutive quarterly dividend and to increase our share repurchase authorization by an additional $100 million. Our business continues to generate strong operating cash flow, enabling us to invest in the continued growth of our business, while also returning capital to shareholders.”

CBOE made news earlier this month after it disclosed its trading volumes for the month ending January 2016, having seen its total contracts swell MoM. During January 2016, CBOE Holdings reported a total trading volume for options contracts on Chicago Board Options Exchange, C2 Options Exchange, and futures contracts on CBOE Futures Exchange of 102.9 million, climbing 14.3% MoM from 90.0 million contracts in December 2015.

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