Forex trading growth rises 20%, leading to record quarter
CME Group Inc. (NASDAQ: CME), the world's leading derivatives marketplace, reported record financial results for the second quarter of 2024, with foreign exchange (FX) trading volumes posting strong growth of 20% to more than 1 million contracts per day.
CME Group Reports Record Q2 Revenue, Forex Trading Increases
The Chicago-based exchange operator posted record quarterly revenue of $1.5 billion, driven by increased trading activity across all asset classes. Adjusted net income reached $932 million, or $2.56 per diluted share, beating analysts' expectations.
Average daily volume (ADV) for the quarter was 25.9 million contracts, marking the highest second-quarter ADV in the company's history. Notably, foreign exchange ADV increased to 1.075 million contracts, up 19.7% year-on-year. Terry Duffy, Chairman and CEO, CME Group, Source: CME
“Growing uncertainty has led to an increased need for risk management across all asset classes,” said Terry Duffy, Chairman and CEO of CME Group. “For the first time in more than a decade, our volume and open interest grew across every asset class, with total ADV up 16% in commodities markets and 13% in financial markets.”
The strong performance of the Forex segment is achieved against the backdrop of increased global economic uncertainty and instability in foreign exchange markets. CME's foreign exchange products, particularly futures and options on major currency pairs, have become more widely used as traders look to manage currency risk.
Other asset classes also showed strong growth. The ADV of interest rates reached 12.894 million contracts, while the ADV of the equity index was 6.779 million contracts. Energy and agricultural commodities showed notable growth, with ADVs of 2.447 million and 1.877 million contracts respectively.
|
Product line |
2Q 2023 |
3rd quarter 2023 |
4Q 2023 |
1Q 2024 |
2Q 2024 |
|
Interest rates |
11,273 |
10,967 |
13,348 |
13,839 |
12,894 |
|
Share indices |
6,216 |
6,353 |
6,922 |
6,856 |
6,779 |
|
Foreign currency |
898 |
942 |
1.007 |
984 |
1.075 |
|
Energy |
2.104 |
2.126 |
2,158 |
2,412 |
2,447 |
|
Agricultural products |
1.752 |
1.433 |
1,469 |
1,596 |
1.877 |
|
Metals |
612 |
528 |
609 |
675 |
868 |
|
General |
22,855 |
22,349 |
25,513 |
26,360 |
25,941 |
CME Group ADV (in thousands)
CME's electronic trading platform Globex continued to lead the pack, processing an average of 24.143 million contracts daily during the quarter.
Looking ahead, Duffy emphasized that the company is focused on "ensuring capital efficiency, bringing new products to market and creating additional value for our customers through our partnership with Google Cloud."
Good CME status
CME Group's financial performance continues to demonstrate strong momentum, building on record results achieved in 2023. In the fourth quarter of 2023, CME reported strong financial results with revenue reaching $1.4 billion and operating income of $863 million.
In a move to further strengthen its position in the fixed income sector, CME Group recently announced the appointment of Mike Dennis as its new Global Head of Fixed Income. Dennis, who has extensive trading and clearing experience, is expected to take up the role in early August, reporting directly to Duffy.
The company is also exploring new market opportunities. Reports suggest that CME Group is considering entering the Bitcoin spot trading market in response to growing demand from institutional investors.
In the foreign exchange market segment, CME Group showed particularly strong growth. The latest data for June shows a significant increase in FX market volumes of 25%, with average daily volume reaching 1.1 million contracts.