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Nasdaq Reports Mixed Q3 Volumes, September Volumes Increases

Nasdaq, Inc. NDAQ reported solid volumes for third-quarter 2020. While U.S. equity options volume increased 52% year over year to 660 million contracts, European options and futures volume declined 22.4% year over year to 16.9 million contracts.

Revenues per contract for U.S. equity options declined 20% to 12 cents, while the same for European options and futures increased 23% to 48 cents.

Under its cash equities, Nasdaq’s U.S. matched equity volume in the third quarter grossed 123.6 billion shares, up 37% from the prior-year quarter’s levels. European equity volume increased 23.4% year over $237 billion.

Under Fixed Income and Commodities, U.S. Fixed income volume in third quarter declined 60% to $1.2 trillion. European fixed income volume decreased 15.9% to 5.8 million contracts.

In the third quarter, there were 4298 listed companies on Nasdaq compared with 4,119 in the year-ago quarter. Total listings increased 4.3% year over year to 4298. Nasdaq indexes surged 93.5% to 89.4 million contracts in the third quarter.

Nasdaq aims for long-term growth by banking on organic means. The company also intends to ramp up growth by reviewing operations. Its increased focus on Market Technology and Information Services businesses bodes well, as these offer great growth opportunities.

Its organic growth has also been boosted by the strategy of accelerating its non-trading revenue base, which includes market technology, listing and information revenues. The company’s organic growth in non-trading segments was 8% in 2019, primarily attributable to its Market Technology, Index, and Investment Data & Analytics businesses. Nasdaq expects growth from its index and analytics businesses, followed by a moderate rise in its exchange data products across the U.S. and Nordic equities, options and fixed income businesses.

September Volumes

Concurrently, Nasdaq reported September volumes. U.S. equity options volume increased 70.7% year over year to 227 million contracts. European options and futures volume increased 1.5% year over year to 6.9 million contracts.

Price Performance

Shares of this Zacks Rank #3 (Hold) provider of trading, clearing, marketplace technology, regulatory, securities listing, information as well as public and private company services  have gained 26.4% in the past year against the industry’s decline of 0.9%.

The Zacks Consensus Estimate for third-quarter earnings is pegged at $1.41, which indicates year-over-year improvement of 11% on 8.3% higher revenues.

Our proven model predicts an earnings beat for the company when it reports third-quarter results on Oct 21. This is because it has the right combination of a Zacks Rank #3 (Hold) and Earnings ESP of +0.61%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

September Volumes of Other Securities Exchanges

Recently, securities exchanges, namely CME Group Inc. CME and MarketAxess Holdings Ltd. MKTX and Cboe Global Markets, Inc. CBOE also posted their respective September 2020 volumes.

While MarketAxess reported trading volume of $461.0 billion, consisting of $206.2 billion in credit volume and $254.8 billion in rates volume, Cboe Global posted ADV of 10.4 million contracts, up 26.4% year over year. CME Group reported ADV for September 2020 of 16.9 million contracts per day, down 14% year over year due to lower volumes in four of the six product lines.

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