CME Group profit rises as market volatility drives hedging demand

By Pritam Biswas

April 22 (Reuters) - CME ‌Group reported a ​rise in ​first-quarter profit on Wednesday, as the derivatives exchange operator benefited from heightened market volatility encouraging more investors to hedge their positions.

Average daily volumes (ADV) touched a record ‌high in the quarter with 36.2 million contracts, up 22% from the ⁠year-ago period, powered by the company's interest rate and equity index products.

CME Group kicked off first-quarter earnings season for ‌major U.S. exchanges, which are ‌expected to report a largely stronger quarter on heightened geopolitical and economic uncertainty.

Nasdaq is set to report its results on Thursday.

"In a world in which risk has become the new ​normal, 2026 is off to a record-breaking start as clients around the world turn to CME Group's trusted, regulated markets to hedge across asset classes and in all trading ⁠environments," CEO Terry Duffy said in a statement.

VOLATILITY OFFERS CLEARING REVENUE BOOST

The exchange's clearing and transaction fees rose to $1.54 billion ​from $1.34 billion a year earlier.

CME Group operates a vertically integrated model, owning its clearing house to capture fees across the trade lifecycle.

Revenue in its ​market data and information services segment increased to $224.1 million ‌from $194.5 million.

Adjusted profit attributable to the common shareholders of the company came in at $1.22 billion, or $3.36 per share, for the three months ended March ⁠31, compared with $1 billion, or $2.80 per share, in the year-ago period.

That slightly missed analysts' average estimate of $3.37 per share, according to data compiled by LSEG.

Shares of the company, which have gained about 4.2% so ⁠far this year to outperform the broader markets, slipped about 1% in early trade.

TOKENIZATION WITH GOOGLE CLOUD

CME Group ​and Google Cloud last month announced they were piloting a distributed ledger designed to enable 24/7 settlement and real-time management of collateral and margin, moving beyond traditional banking hours.

"The goal there really is to be ‌able to increase the testing capabilities within the settlement bank ecosystem, as well as start integrating clearing members into that testing process this year, ‌with a goal of being able to go live by the end of the year," said ⁠CME's Chief Operating Officer Suzanne Sprague on ‌a post-earnings call.

Sprague and Duffy ​also added that CME is seeking a license to be able to issue a stablecoin.

(Reporting by Pritam Biswas in Bengaluru; Editing by Devika Syamnath and ‌Sriraj Kalluvila)

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