Shares of CME Group Inc. CME gained 0.2% in the last trading session as the securities exchange announced an expansion to its base metals offering. Alumina FOB Australia (S&P Global Platts) futures and Alumina FOB Australia (Metal Bulletin) futures were launched and the same will commence trading from Sep 26, 2016.
These newly launched futures contracts are intended to help customers better manage risk amid volatility. Management noted that the aluminum product suite is ramping up and thus designed new products to address the latest needs of its customers. CME Group’s Metals Products volumes were 0.5 million contracts per day in Jul 2016, up 32% year over year. Open interest contracts were more than 0.04 million in Jul 2016.
The new products will complement CME Group’s current set of aluminum risk management tools – Aluminum A380 Alloy (S&P Global Platts) futures, Aluminum MW U.S. Transaction Premium Platts futures, Aluminium European Premium Duty-Paid (Metal Bulletin) futures, Aluminium European Premium Duty-Unpaid (Metal Bulletin) futures, Aluminum Japan Premium (Platts) futures and physically delivered Aluminum futures.
CME Group stated that Alumina FOB Australia (Metal Bulletin) as well as Alumina FOB Australia (S&P Global Platts) futures will be 100 metric tons (or 220,462 pounds) in size.
Fundamental growth remains a huge driver for CME Group’s improving operating leverage, through which CME group leads with about 90% market share of the global futures trading and clearing services. Hence expansion of futures products, non-transaction related opportunities and OTC offerings should continue to contribute modestly to top-line growth in the coming years.
Zacks Rank and Other Stocks to Consider
CME Group current carries a Zacks Rank #2 (Buy). Investors interested in the finance sectors can also look at Bats Global Markets BATS, MarketAxess Holdings Inc. MKTX and Cincinnati Financial Corp. CINF, each sharing the Zacks Rank with CME Group.
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