Exchange operator Cboe's 3rd-qtr profit boosted by VIX franchise

Reuters2021-10-29

Oct 29 (Reuters) - Exchange operator Cboe Global Markets Inc on Friday said its third-quarter profit jumped 9%, driven by higher trading levels across nearly all of its segments, notably in index options and volatility products.

Cboe, which provides trading platforms and products in equities, derivatives and foreign exchange across North America, Europe and Asia Pacific, last week said it agreed to acquire cryptocurrency trading platform ErisX for an undisclosed amount.

"The past two weeks have been a watershed moment for the digital asset industry with the launch of trading in the first bitcoin ETF in the U.S. equities market," Cboe Chief Executive Officer Ed Tilly said on a call with analysts on Friday.

"As the appetite for ownership and digital assets continues to grow, we believe Cboe can play a guiding role in shaping the trajectory of this revolutionary market."

The company plans to work with regulators to gain approval for margin futures and other derivatives products for cryptocurrencies, to expand ErisX, executives on the call said.

In the third quarter, Cboe earned $1.45 per share on an adjusted basis, which was a penny above analysts' expectations, according to IBES data from Refinitiv.

While volumes were up nearly across the board, Cboe's proprietary index options and volatility products such as the VIX volatility index stood out.

Average daily volume for VIX futures was up 29% year-over-year, VIX options were up 32%, and SPX options rose 39%.

Chicago-based Cboe, long established in North America and Europe, recently bought Chi-X Asia

an alternative market operator, to expand into Japan and Australia.

That deal, which closed in late June, drove a 53% increase in revenue at the company's Europe and Asia Pacific segment.

Cboe's total revenue, excluding costs, rose 27% to $369.5 million.

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