John McCrank

NEW YORK (Reuters] – Cboe Global Markets (NYSE 🙂 reported on Friday that it saw a 90% increase in fourth quarter profits. The higher volumes of transactions, notably options, as well as lower than expected expenses, topped Wall Street estimates.

Cboe provides products and trading platforms in equities and derivatives in North America, Europe, and Asia Pacific. Its net income for common shareholders increased to $165.3million, or $1.54 per share, in quarter ending Dec. 31. This compares with $87.1 million or 81c per diluted share a year ago.

Cboe Chief executive Officer Ed Tilly spoke on conference call following the release of earnings. He stated, “Our results are driven by higher volumes throughout our businesses, combined with increased demand to our suite data and access solutions,”

Option revenues rose 25%, primarily due to increased trading volume in Chicago-based companies’ proprietary products. Options include options tied to volatility indexes and the It said that VIX futures’ average daily volumes rose by 50%.

Cboe reported that January was a volatile month with expectations of higher interest rates and market volatility. VIX volumes rose 31% compared to a year ago, and VIX options rose 24%. SPX options increased 17%.

The net revenue rose 27%, to 390.5 millions.

Excluding one-time items, like M&A costs, Cboe earned $1.70 per diluted share, topping the mean estimate of analysts by 17 cents, according to IBES data from Refinitiv.

According to Daniel Fannon, a Jefferies analyst, the beat was driven by lower-than expected transaction fees and expenses.

Fannon stated in a client note that Cboe’s 2020 expense projection of $617 to $625 Million was higher than consensus estimates.

Cboe shares fell 0.2% to $116.45 on Friday morning.