Options Industry

ICE's Purchase of NYSE Euronext and Its Effect on CME Group


Back in December when the Intercontinental Exchange (NYSE:ICE) announced its plans to acquire NYSE Euronext (NYSE:NYX), questions immediately began to swirl on regulatory issues, clearing, competitors and products.

One that is at the forefront is the potential effect on CME Group (NASDAQ:CMG). In a recent Crain's article, Lynn Marek reviews this in, "How the sale of the New York Stock Exchange affects CME's future" and then examines the pressure felt by the large exchange.

She asks, Will CME go out and make its own acquisition? How will this affect its global position?

In a second recent article, Jacob Bunge reviews ICE's 2012 futures growth vs. CME and Deutsche Borse's financial derivatives declines. ICE reported a 2012 record increase of 9.7% increase in future and options trading. 

With strong gains from its energy and agricultural futures contracts, ICE's rival exchanges including CME and Deutsche Borse AG (DB1.XE, DBOEF) emphasized financial derivatives, which were negatively affected from interest rates and the decline of stock investing.

But in 2012, CME remained the world's largest futures exchange company based on trading activity even with its 15% decline as compared to 2011. 

What kind of number will we see next year?

Bunge also looked at the exchanges' stock growth and found that while ICE and CME incurred gains, Deutsche Boerse and Hong Kong Exchanges & Clearing Ltd. (0388.HK) reported even greater ones. At the top was Brazil's BM&FBovespa SA (BVMF3.BR) exchange with its 42.1% stock in 2012; this came from investments flowing in the country and the exchange's monopoly over other ones. 

Change is coming for this exchange landscape and as noted by Richard Repetto, an analyst with Sandler O'Neill via Dow Jones, "ICE is buying NYSE at an opportune time." 

 


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