(Reuters) -Derivatives exchange Cboe Global Markets reported a record first-quarter profit on Friday and boosted its annual revenue growth forecast as heightened market volatility fueled strong growth in options trading.
Exchanges thrive during times of market turmoil as trading volumes surge and investors hedge their portfolios to manage risk, driving up transaction and clearing fees for companies such as Cboe.
Rivals CME Group and NYSE-parent Intercontinental Exchange also had record-breaking quarters as a barrage of tariff-related headlines and the emergence of Chinese startup DeepSeek’s low-cost AI model drove up market volatility.
Revenue from Cboe’s options trading arm jumped 15% to an all-time high of $352.4 million. Its global FX and Europe and Asia Pacific businesses also fetched record revenue in the quarter.
Cboe now expects full-year revenue growth in the mid- to high-single-digit percentage range, up from its previous forecast of mid-single-digit growth.
“The second quarter is off to a robust start, and we look forward to … providing clients with a diverse toolkit of products for any market environment,” outgoing CEO Fredric Tomczyk said.
Its average daily volume in index options hit a quarterly record of 4.8 million contracts, a 17% jump from a year earlier.
The rising popularity of options trading as well as increased activity from retail investors also boosted Cboe’s business.
NEW GUARD
Cboe late on Thursday named rival CME former top boss Craig Donohue as its new CEO, effective May 7.
He succeeds Tomczyk, who has been at the helm since September 2023 and steered Cboe through a challenging time after the abrupt departure of former CEO Edward Tilly.
Excluding one-time costs, Cboe earned a record $2.50 per share for the quarter, beating analysts’ expectations of $2.36, according to estimates compiled by LSEG.
Revenue jumped 13% to a quarterly record of $565.2 million, beating expectations of $560 million.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Devika Syamnath)
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