Breaking News - I’ve started to nibble at CBOE 
I’ve been notably bearish on the name for the last ~4 months – I’ll lay out the reason for my pivot from bear to cautious bull below.
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The mini-VIX & e-mini options launch will give the market more hedging/arbitrage opportunities, improving OI, volumes & core liquidity. Management said as much during Q2 earnings:pic.twitter.com/ViQgNp0U9U
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CBOE bought 3 data companies this year, all adding to their recurring revenue. Data revenue is quickly approaching 50% of total. Shouldn’t more recurring revenue = higher valuation? Maybe not short term, but over next couple years perception may change, especially w/more deals.
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Valuation is just too low now for sentiment to get worse from here. CBOE is trading at 17x 2020 EPS AND 2021 EPS (no growth projected in 2021). Any positive surprises can push this multiple back to peers (at least 20x)
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As always, there are risks (more VIX blow ups, poor Europe execution, loss of market share in equities), but those seem priced in now. I’m now long CBOE at ~$86, and may buy more if price slides from here.
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End of conversation
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There derived data fees are essentially collected mainly from VIX at $833/month and $375/month for proprietary/white label? The good news is this has pricing power and something most platforms need. However, VIX also seems to be a big part of non-transactional business too?
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I don't disagree for your overall decision/logic. It's easy to argue that a 15-30% discount exists in the current stock price.
End of conversation
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