Cboe Global Markets Expands Its Options Business in Europe
Cboe Global Markets (NYSEMKT: CBOE), already the owner of the largest options exchange in the U.S. and the biggest stock exchange in Europe, is expanding its derivatives business overseas. On Dec. 10, the company -- which makes most of its revenue through transaction fees on options trades -- announced that it will be launching futures and options trading on equity indices in Europe next year.
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It's doing so via the acquisition of EuroCCP, an equity clearing and settlement organization that works with 18 different European markets covering 95% of the continent. David Howson, executive vice president at Cboe Global Markets and president of Cboe Europe, noted that the volume of options trading in Europe is currently just 8% of that in the U.S., meaning there is a great opportunity here for future growth for Cboe. That said, the acquisition and expansion are expected to dampen earnings in the short term, for up to four years.
Source Fool.com