Cboe GLOBAL MARKETS REPORTS TRADING VOLUME FOR DECEMBER AND FULL YEAR 2023
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Insights
The recent report from Cboe Global Markets, Inc. provides actionable insights into the trading volumes and rate per contract/net revenue capture across various financial instruments and geographies. An important takeaway is the significant increase in index options trading volume, with a 33.4% rise compared to the previous year and the record-breaking annual trading volume in US options for the fourth consecutive year. This reflects a robust demand for derivative products, possibly indicative of heightened market volatility and the strategic use of options for hedging and speculative purposes.
Another key observation is the diverse performance across different markets, with notable growth in Canadian and Japanese equities trading volumes, contrasting with a decline in European equities. This could suggest regional economic divergences or shifts in investor focus. The reported rise in Global FX Spot ADV also hints at increased currency trading activity, which may be driven by global economic uncertainties and currency fluctuations.
The data on projected rate per contract/net revenue capture for Q4 2023, though preliminary, is crucial for assessing Cboe's revenue outlook. The varying RPC across products and regions underscores the importance of a diversified portfolio in mitigating risks associated with any single market segment.
From a financial perspective, the detailed breakdown of Cboe's trading volumes and rate per contract/net revenue capture offers investors a glimpse into the company's revenue generation mechanisms. The consistent increase in average daily trading volume (ADV) for index options and the record volumes for proprietary products like SPX and VIX options are likely to have a positive impact on the company's financial performance, given the higher RPC for index options compared to multiply-listed options.
Moreover, the reported increase in Global FX trading activity, with an overall Spot ADV growth, suggests a strengthening of Cboe's position in the competitive FX market. The data on net revenue capture, especially in high-margin products like futures, which saw a per contract RPC of $1.748, will be of particular interest to investors as they evaluate Cboe's revenue efficiency and potential profitability.
Investors should also consider the implications of the mixed performance in equities, with declines in U.S. and European equities potentially offset by the growth in Canadian and Japanese markets. This could affect the regional revenue contributions and strategic focus of the company moving forward.
Analyzing Cboe's trading volume statistics from an economic standpoint, the data reflects broader economic trends and investor sentiment. The surge in index options trading, particularly in the S&P 500 and VIX options, may be interpreted as a response to economic uncertainty and market volatility, as these products are often used for risk management and speculation during turbulent times.
The fluctuating trading volumes in equities across different regions could be indicative of shifting investor confidence and capital flows, which are influenced by macroeconomic factors like interest rates, currency strength and geopolitical events. For instance, the robust performance in Canadian equities might be associated with commodity price movements or regional economic policies that favor market growth.
Furthermore, the substantial increase in Global FX trading volumes could be related to the dynamic changes in global trade, monetary policies and cross-border investment activities. These factors often lead to increased currency exposure for corporations and investors, thereby driving demand for FX trading as a means of hedging and liquidity management.
The data sheet "Cboe Global Markets Monthly Volume & RPC/Net Revenue Capture Report" contains an overview of certain December and full year 2023 trading statistics and market share by business segment, volume in select index products, and RPC/net capture, which is reported on a one-month lag, across business lines.
Average Daily Trading Volume (ADV) by Month | Year-To-Date | |||||||
Dec 2023 | Dec 2022 | % Chg | Nov | % | Dec 2023 | Dec 2022 | % | |
Multiply-listed options (contracts, k) | 10,472 | 10,615 | -1.4 % | 10,436 | 0.3 % | 10,814 | 10,784 | 0.3 % |
Index options (contracts, k) | 3,984 | 3,222 | 23.7 % | 3,972 | 0.3 % | 3,800 | 2,847 | 33.4 % |
Futures (contracts, k) | 201.1 | 191 | 5.2 % | 203 | -0.9 % | 223 | 218 | 2.3 % |
1,670 | 1,345 | 24.2 % | 1,350 | 23.7 % | 1,414 | 1,614 | -12.4 % | |
68 | 70 | -3.0 % | 72 | -5.8 % | 78 | 90 | -13.7 % | |
Canadian Equities (matched shares, k) | 151,854 | 152,571 | -0.5 % | 137,443 | 10.5 % | 136,110 | 91,769 | 48.3 % |
European Equities (€, mn) | 8,816 | 8,522 | 3.4 % | 8,922 | -1.2 % | 9,398 | 10,829 | -13.2 % |
Cboe Clear Europe Cleared Trades (k) | 83,648 | 95,940 | -12.8 % | 97,892 | -14.6 % | 1,172,028 | 1,499,898 | -21.9 % |
Cboe Clear Europe Net Settlements (k) | 770 | 821 | -6.2 % | 869 | -11.4 % | 10,045 | 10,341 | -2.9 % |
Australian Equities (AUD, mn) | 777 | 661 | 17.6 % | 681 | 14.2 % | 704 | 784 | -10.2 % |
Japanese Equities (JPY, bn) | 192 | 59 | 223.3 % | 182 | 5.9 % | 177 | 143 | 23.5 % |
Global FX ADNV ($, mn) | 45,600 | 35,870 | 27.1 % | 47,272 | -3.5 % | 44,706 | 40,906 | 9.3 % |
1 Canadian Equities data includes MATCHNow and NEO (now operating as Cboe Canada) from June 2022 onwards. Before June 2022 it included MATCHNow only. |
2 Cboe Clear Europe figures are totals (not ADV) for the months and years-to-date. As of April 2023, data has been restated to reflect both On-Book and Off-Book cleared trades. |
December and Full Year 2023 Trading Volume Highlights
US Options
- Total volume across Cboe's four options exchanges was 3.7 billion contracts in 2023, the fourth consecutive record-breaking year
- Total options ADV reached an all-time high of 14.6 million contracts traded per day in 2023
- Cboe's proprietary product suite set several volume records for the year, including:
- S&P 500 Index (SPX) options traded a total of 729.3 million contracts, with an ADV of 2.9 million contracts
- Cboe Volatility Index (VIX) options traded a total of 185.7 million contracts, with an ADV of 743 thousand contracts
- Trading in SPX options set a new single-day volume record on December 14, 2023 with 4.8 million contracts traded
Global FX
- Global FX reported several records for full year 2023, including:
- Overall Spot ADV of
$43.6 billion - Cboe SEF (Swap Execution Facility) Non-Deliverable Forwards ADV of
$1.1 billion
- Overall Spot ADV of
Fourth-Quarter 2023 RPC/Net Revenue Capture Guidance
The projected RPC/net capture metrics for the fourth quarter of 2023 are estimated, preliminary and may change. There can be no assurance that our final RPC for the three months ended December 31, 2023, will not differ materially from these projections.
(In USD unless stated otherwise) | Three-Months Ended | |||
Product: | 4Q Projection | Nov-2023 | Oct-2023 | Sept-2023 |
Multiply-Listed Options (per contract) | 0.061 | 0.057 | 0.056 | 0.055 |
Index Options | 0.909 | 0.901 | 0.900 | 0.894 |
Total Options | 0.298 | 0.293 | 0.286 | 0.270 |
Futures (per contract) | 1.748 | 1.726 | 1.714 | 1.753 |
0.015 | 0.021 | 0.022 | 0.022 | |
0.142 | 0.136 | 0.135 | 0.129 | |
Canadian Equities (per 10,000 touched shares) | ||||
European Equities (per matched notional value) | 0.230 | 0.231 | 0.229 | 0.232 |
Australian Equities (per matched notional value) | 0.161 | 0.159 | 0.155 | 0.155 |
Japanese Equities (per matched notional value) | 0.235 | 0.236 | 0.242 | 0.257 |
Global FX (per | 2.616 | 2.609 | 2.627 | 2.643 |
Cboe Clear Europe Fee per Trade Cleared | ||||
Cboe Clear Europe Net Fee per Settlement | ||||
The above represents average revenue per contract (RPC) or net capture is based on a three-month rolling average, reported on a one-month lag. Average transaction fees per contract can be affected by various factors, including exchange fee rates, volume-based discounts and transaction mix by contract type and product type.
- For Options and Futures, the average RPC represents total net transaction fees recognized for the period divided by total contracts traded during the period for options exchanges: BZX Options, Cboe Options, C2 Options and EDGX Options; futures include contracts traded on Cboe Futures Exchange, LLC (CFE).
- For
U.S. Equities, "net capture per 100 touched shares" refers to transaction fees less liquidity payments and routing and clearing costs divided by the product of one-hundredth ADV of touched shares on BZX, BYX, EDGX and EDGA and the number of trading days for the period. - For
U.S. Equities – Off-Exchange, "net capture per 100 touched shares" refers to transaction fees less OMS/EMS costs and clearing costs divided by the product of one-hundredth ADV of touched shares on BIDS Trading and the number of trading days for the period. - For Canadian Equities, "net capture per 10,000 touched shares" refers to transaction fees divided by the product of one-ten thousandth ADV of shares for MATCHNow and the number of trading days for the period and includes revenue from NEO (now operating as Cboe Canada) from June 2022.
- For European Equities, "net capture per matched notional value" refers to transaction fees less liquidity payments in British pounds divided by the product of ADNV in British pounds of shares matched on Cboe Europe Equities and the number of trading days.
- For Australian Equities, "net capture per matched notional value" refers to transaction fees less liquidity payments in Australian Dollars divided by the product of ADNV in Australian Dollars of shares matched on Cboe Australia and the number of trading days.
- For Japanese Equities, "net capture per matched notional value" refers to transaction fees less liquidity payments in Japanese Yen divided by the product of ADNV in Japanese Yen of shares matched on Cboe Japan and the number of trading days.
- For Global FX, "net capture per
one million dollars traded" refers to transaction fees less liquidity payments, if any, divided by the Spot and SEF products of one-thousandth of ADNV traded on the Cboe FX Markets and the number of trading days, divided by two, which represents the buyer and seller that are both charged on the transaction. - For Cboe Clear Europe, "Fee per Trade Cleared" refers to clearing fees divided by number of non-interoperable trades cleared and "Net Fee per Settlement" refers to settlement fees less direct costs incurred to settle divided by the number of settlements executed after netting.
About Cboe Global Markets
Cboe Global Markets (Cboe: CBOE), the world's leading derivatives and securities exchange network, delivers cutting-edge trading, clearing and investment solutions to people around the world. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives, FX, and digital assets, across
Cboe Media Contacts | Cboe Analyst Contact | |||
Angela Tu | Tim Cave | Kenneth Hill, CFA | ||
+1-646-856-8734 | +44 (0) 7593-506-719 | +1-312-786-7559 | ||
CBOE-V
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Options involve risk and are not suitable for all market participants. Prior to buying or selling an option, a person should review the Characteristics and Risks of Standardized Options (ODD), which is required to be provided to all such persons. Copies of the ODD are available from your broker or from The Options Clearing Corporation, 125 S. Franklin Street, Suite 1200,
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SOURCE Cboe Global Markets, Inc.
FAQ
What are the trading volume statistics reported by Cboe Global Markets, Inc. (CBOE) for December and full year 2023?
What are the projected rate per contract/net revenue capture for the fourth quarter of 2023 by Cboe Global Markets, Inc. (CBOE)?
Did Cboe Global Markets, Inc. (CBOE) achieve any records in their global FX business in 2023?
