CME Sees Electronic Trade Services Powering Up 2012 Revenues
October 04 2011 - 12:15PM
Dow Jones News
The top executive of CME Group Inc. (CME) said Tuesday the
futures exchange group will get a boost next year as it bulks up in
services for electronic traders.
Speed-sensitive trading firms are signing on for quicker hookups
to CME's markets and the company will boost market data fees for
screen traders next year, together seen adding as much as $75
million in 2012 revenue.
CME on Jan. 29, 2012 will go live with so-called co-location
services, allowing high-frequency traders and other users of
automated trading strategies the shortest and fastest connection to
the exchange group's electronic trade-matching systems, according
to the company.
More than 100 firms have signed contracts for the service and
now are installing their servers in CME's newly built data center
facility, located in the Chicago suburbs.
"We've seen very, very strong demand for our co-location
services, beyond what we'd initially expected," said Craig Donohue,
chief executive of CME, speaking Tuesday at the company's investor
day.
Fees paid by firms for co-location are now seen bringing in $40
million to $45 million in revenues next year, according to CME
estimates, up from the $30 million to $40 million estimated earlier
this year.
CME also aims to lift fees paid by firms to receive market data
like pricing information by 15%, to $70 per screen, beginning Jan.
1. That is expected to bring in an additional $25 million to $30
million in revenue.
Shares in CME were down by 2.6% to $242 in a volatile trading
session Tuesday.
-By Jacob Bunge, Dow Jones Newswires; 312 750 4117;
jacob.bunge@dowjones.com
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