“Overall, commodities volume remained impressive during the quarter,” Craig Donohue, CME’s chief executive officer, said in a conference call following the release of financial results.
While CME said profit rose 29 percent during the third quarter, better than many analysts predicted, the company’s shares were down more than 7 percent in afternoon trading Nov. 1. The share decline partly reflected the bankruptcy of MF Global Ltd., a major broker and clearing member at CME. MF Global’s bankruptcy filing Oct. 31 raised questions whether CME may be responsible for any losses incurred by the trading firm’s customers.
Soon after the bankruptcy filing, CME said it would no longer recognize MF Global as a clearing member and barred the company’s brokers from the trading floor.
CME still reaped a trading windfall this year as fears Greece would default on its debt obligations contributed to volatile global markets, boosting demand for contracts based on Treasury bonds and notes. Wall Street banks and others use CME contracts such as Eurodollars to speculate and protect against adverse market moves.
During the quarter ended Sept. 30, CME had net income of $316.1 million, up from $244.3 million in the same period a year earlier, the company said in the statement. Revenue totaled $874.2 million, up 19 percent.
Overall, CME trading volume averaged 14.7 million contracts a day during the quarter, up 27 percent from a year earlier. About 85 percent of CME volume was conducted electronically, with the rest executed through traditional “open outcry” in the exchange’s trading pits. Agricultural trading accounts for about 7 percent of CME’s total volume.
CME, which bought the Chicago Board of Trade for $12 billion in 2007, generates revenue primarily through transaction and clearing fees charged to brokers, banks and other customers. During the third quarter, the cost to buy and sell an agricultural contract averaged $1.26, about the same as a year earlier.