February 8, 2019 / 12:27 PM / 5 months ago

UPDATE 1-Exchange operator Cboe beats profit on strong transaction fees

(Adds details on transaction revenue, trading volumes, background)

Feb 8 (Reuters) - Cboe Global Markets Inc topped fourth-quarter profit estimates on Friday, as the exchange operator earned more from transaction fees, driven by elevated market volatility.

Fears of a U.S. slowdown and the U.S.-China trade war spiked market volatility in December, forcing investors to rejig risky portfolios, benefiting exchange operators such as CBOE who make most of their money from transaction fees.

Transaction fees rose 31 percent to $563.2 million from a year earlier, driven by higher trading volumes across each trading segment. (bit.ly/2WKwIYV)

Options trading volume rose 23 percent, while futures trading volume rose 18 percent.

Derivatives such as options and futures are traded on Cboe’s VIX index, Wall Street’s so-called “fear gauge”, which measures 30-day expected market volatility of the S&P 500 index.

Adjusted net income allocated to common stockholders rose to $171.6 million, or $1.54 per share, in the fourth quarter ended Dec. 31, from $97.7 million, or 87 cents per share, a year earlier.

Analysts, on average, had expected the Chicago-based company to report a profit of $1.37 per share, according to IBES data from Refinitiv.

The Chicago-based trading firm’s net revenue rose 26 percent to $334.4 million. (Reporting by Bharath Manjesh in Bengaluru; Editing by Shailesh Kuber)

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