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A key metric to compare exchanges to each other is the size of their market data businesses. Exchange transaction revenue can be cyclical & volatile, but market data is a recurring, stable revenue stream that allows exchanges to put up consistent growth.

Love it! Can you give us a sense of the history of these businesses as public companies and what it means for the monetization of data?

Good question. Pre-early 2000s, exchanges were owned by their largest customers (banks, brokers, big traders). When exchanges demutualized & became public companies from 2002 - 2006ish, they now needed to satisfy public shareholders with consistent growth.

This pressure made the industry start to look for revenue streams that analysts could forecast & value better (stable, consistent, recurring in nature). Now exchanges with exposure to indices & other data services are rewarded with higher multiples as a result.

So similar to $V, $MA one-time demutualization plays? Who are the key players shaping that landscape? How do you weigh importance of the data business vs. attractiveness of the markets they're in?

There are different ways to think about both pieces (data & transaction revenue). Within data, products that are connected to secular trends with long runways get more love (ie ESG data, passive index products) & ones with limited TAM growth get shunned (ie equity market data).

On the transaction side, exchanges have exposure to different markets & their performance will mirror activity in those markets. For example, $CME has been outperforming recently bc their #1 product is interest rates, which see higher volumes when inflation is in focus.