Cboe Sees Drop in FX Revenues but Increases Market Share

The exchange also reported a drop in FX trading during the quarter.

Cboe has reported its financial results for the second quarter of 2019 this Friday, revealing a year-on-year drop for its key metrics, as low volatility in equities and foreign exchange (forex) continues to weigh on revenues and profit.

During the quarter, which ended on the 30th of June, Cboe reported that its total revenues were $283.2 million, which is ever so slightly lower than the total revenues of $283.5 million reported in the second quarter of 2018.

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Operating income, however, fell by three percent, falling from $129.1 million in the second quarter of last year, down to $125.2 million in the second quarter of 2019.

In the second quarter, operating expenses noted an uptick. Specifically, operating expenses increased by two percent from $154.4 million in Q2 of 2018, to reach $158.0 million in 2019.

Breaking down revenues into business segments, the largest US options exchange achieved Global FX net revenue of $13.1 million. This represents a decrease of $1.4 million or ten percent year-on-year.

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According to the report, this decline was primarily due to lower net transactions fees in comparison to the second quarter of last year.

The average daily notional volume (ADNV) traded on Cboe’s FX platform was $32.5 billion for the quarter. This is lower by 15 percent from last year’s second quarter. 

Cboe FX increases market share

Despite the drop in revenues and volumes, the Cboe FX’s market share managed to increase to 15.2 percent in Q2 of 2019. On a yearly comparison, net capture increased $0.09, or four percent, per one million dollars traded to $2.65.

Commenting on the results, Edward T. Tilly, Cboe Global Markets Chairman, President and Chief Executive Officer said: “Our second quarter results were primarily driven by higher trading volume in our suite of proprietary products compared to the second quarter of 2018, offset by flat to lower trading volumes industrywide in U.S. equities, European equities and FX.”

“We remain focused on executing on our strategic initiatives to drive long-term growth and value to our customers and shareholders. We continue to make solid progress in bolstering our customer outreach programs and are on track to complete our final technology migration of Cboe Options on October 7.”

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