Exchange operator Cboe profit beats on coronavirus-driven volatility

Exchange operator Cboe Global Markets Inc beat market expectations for quarterly profit on Friday, earning more from clearing transactions as trading volumes increased due to market volatility during the COVID-19 pandemic.

Rivals Nasdaq, Intercontinental Exchange Inc and CME Group also beat quarterly profit estimates, benefiting from increased market volatility. "During the quarter, increased trading activity across our asset classes led to record net revenues," said Cboe Chief Executive Officer Edward Tilly.

Its options business revenue jumped 36%, while revenue from futures soared 36%. Options trading volume were up 51%, while futures trading volume climbed 43%. Derivatives such as options and futures are traded on Cboe's VIX index, Wall Street's so-called "fear gauge", which measures the 30-day expected market volatility of the S&P 500 index.

Net income allocated to common stockholders rose to $157 million, or $1.42 per share, in the first quarter ended March 31, from $94.6 million, or 85 cents per share, a year earlier. On an adjusted basis, Cboe earned $1.65 per share, beating analysts' estimates of $1.54, according to IBES data from Refinitiv.

The exchange operator said it expects FY 2020 adjusted operating expenses to be in the range of $419 million to $427 million. Net revenue rose 28% $358.3 million.