CME profits rise as micro futures lure retail investors

CME Group Inc (CME.O), the largest futures exchange operator, reported higher second-quarter profit on Wednesday, spurred by lower expenses, a rise in hedging and micro futures, including in oil and bitcoin, that lured retail interest.

Overall average daily volume was up 5%.

CME has also been rolling out micro-futures, aimed at smaller, sophisticated, active traders, that are a fraction of the size of its regular contracts, including micro WTI crude oil contracts at one-tenth the size of the its benchmark WTI futures contract.

“We had a highly successful launch of our micro WTI, which was the most successful commodity product launch in the history of CME Group,” Chief Executive Officer Terry Duffy said on a call with analysts.

CME said 6,200 unique users traded 450,000 micro WTI contracts in the first 11 trading days, and that more than 2,600 of those participants had never traded a crude product with CME in the past.

The exchange also launched micro bitcoin futures, which are worth one-tenth of a bitcoin, versus the regular contract worth 5 bitcoins. CME previously said more than 100,000 micro bitcoin futures were traded within six days of the contract’s launch.

“We have built $100 million a year business so far that didn’t exist just a couple of years ago with our micro product,” Chief Financial Officer John William Pietrowicz said of the micro contracts.

On an adjusted basis, CME earned $1.64 per share, 3 cents more than analysts had expected, according to IBES data from Refinitiv, helped by lower-than-expected expenses.

Quarterly revenue dipped 0.26% to $1.18 billion.