I love owning exchanges because they're a less risky way to bet on macro trends. Generally, if asset classes grow in value or importance, it benefits the exchange that owns that market.pic.twitter.com/flwd5oC0hT
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Example #1 - if rates go up, $CME volumes & revenues go up.
If rates DON'T go up, $CME can still grow their Treasury business as the *size* of the market grows via more outstanding US debt.
$CME is a *naturally hedged* bet on higher rates.pic.twitter.com/irpNzKKr09
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I view exchanges as "gold miners" of their respective asset classes. They win if their products rise in price, but are profitable & stable when the market is quiet.
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Have you heard any news of the CME special Dividend? Typically it’s declared by now.
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All 3 are fixed income exchanges. CME - interest rate futures MKTX - corp bonds TW - corp bonds, treasuries When the yield curve is flat, no one needs to hedge with their products because there’s certainty about the path of interest rates. Vice versa when rates rise.
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