CBOE Holdings, Inc. (NASDAQ:CBOE) Q4 2017 Earnings Conference Call - Preliminary Transcript

Feb 09, 2018 • 08:30 am ET

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CBOE Holdings, Inc. (NASDAQ:CBOE) Q4 2017 Earnings Conference Call - Preliminary Transcript

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Presentation
Executive
Brian Schell

return capital to shareholders through quarterly dividends.

With that, I will turn the call back over to Ed.

Executive
Ed Tilly

Thank you, Brian. Before opening up for Q&A, I'd like to take a moment to provide follow-up on the two areas of most interest to you on our call at Wednesday. The percentage of VIX futures tied to ETP trading, both long and short, and who is trading VIX futures. This first slide shows average AUM on a quarterly basis, for the top, long and short VIX linked ETPs, which represent roughly 90% of VIX ETP assets, as relatively flat between Q4 2015 and January of 2018.

During the same period, overall VIX futures ADV increased by 82%. So while ETP assets continue to be important, the growth in VIX futures trading is no longer reliant on ETP activity.

This next slide demonstrates how our efforts to educate and grow our user base, have increased the number of unique user accounts, associated with trading in CFE, from 4,495 in Q4 2015 to 5,706 in Q4 2017, representing an increase of 27%.

Unique accounts encompassed a broad range of market participants, including asset managers, dealers, market makers, proprietary traders and brokerage execution professionals.

During this period, growth from overseas users, interested in accessing our global trading hour session, has been particularly strong with these user accounts, up 57%.

As we mentioned Wednesday, the activity we see from issuers of XIV and SPXC is less than 5% of all VIX futures trading, representing average daily volume of about 12,000 contracts. It's important to note, that non-institutional holders of these ETPs in the last reported period, represented approximately just 21% of total holdings, with the remainder consisting of sophisticated institutional users, who employ inverse VIX ETPs, as part of a diverse mix of trading and investing strategies.

I thank you again for your time, both today and Wednesday. We continue to make volatility trading a primary educational focus.

The growth in VIX futures and options trading is a result of the utility of these products under virtually any market condition. We see every change in market conditions as an opportunity to redouble our educational efforts.

With that, I will turn it over to Debbie, for instructions on the Q&A portion of the call.

Executive
Debbie Koopman

Thanks Ed. At this point, we would be happy to take questions. We ask that you please limit your questions to one per person to allow time to get to everyone. Feel free to get back in the queue, and if time permits, we will take a second question. Operator.