CBOE Performance & Strategy - CBOE has underperformed relative to its industry and the financial sector despite good earnings [2] - The speaker decided to "ring the register" (sell) CBOE due to this underperformance, but believes it will be fine in 2026 [2][5] - Morgan Stanley has reiterated their underweight rating on CBOE [5] - The speaker still owns CME Group and NASDAQ [4] Market Outlook & Volatility - The speaker anticipates volatility will increase substantially in 2026, even in a bull market, suggesting not to be short volatility [3] - The VIX is currently near a low for the year, below 15 [2] Exchange Preferences & Drivers - The speaker favors NASDAQ, describing it as a "crown jewel" due to benefits from IPOs, data, listing activity, and trading [6][8] - Increased activity is seen as a key driver for exchanges, with volatility being particularly beneficial for CBOE [7] Analyst Ratings & Targets - Morgan Stanley reiterated overweight on NASDAQ with a target of $111 [6] - CME Group reiterated overweight with a target of $320 [6] - Schwab reiterated overweight with a target of $148 [6]

Company Performance - CBOE has experienced relative underperformance compared to other exchanges and the financial sector despite strong earnings [2][4] - The stock's underperformance may be attributed to full positioning and market sentiment rather than a specific identifiable reason [4][5] - Morgan Stanley has reiterated an underweight rating on CBOE, indicating a cautious outlook [5] Market Outlook - The environment for CBOE is expected to improve in 2026, with a belief that volatility will increase significantly even in a bull market [3][5] - The current VIX is near a low for the year, below 15, suggesting potential for increased market activity [2] Comparisons with Other Companies - CME Group and NASDAQ have received reiterated overweight ratings, with target prices set at 320 and 111 respectively, indicating a more favorable outlook compared to CBOE [6] - Schwab's performance is driven by different factors, such as cash balance sweeps, and is not directly comparable to the exchanges like NASDAQ and CME [6][7] - NASDAQ is highlighted as a strong performer benefiting from IPOs and increased trading activity, positioning it as a "crown jewel" among the group [8]

Core Viewpoint - Cboe Global Markets congratulates Michael Selig on his confirmation as Chairman of the CFTC, emphasizing his experience and balanced regulatory approach as vital for the evolving derivatives markets [1] Group 1: Company Response - Cboe expresses eagerness to collaborate with the CFTC to enhance market resilience and improve the investor experience [1] - The company acknowledges the leadership of Acting Chairman Caroline Pham and wishes her success in future endeavors [1] Group 2: Company Overview - Cboe Global Markets is recognized as the world's leading derivatives and securities exchange network, providing advanced trading, clearing, and investment solutions globally [2] - The company offers trading solutions across various asset classes, including equities, derivatives, and FX in North America, Europe, and Asia Pacific [2] - Cboe is committed to fostering a trusted and inclusive global marketplace for sustainable financial futures [2]

Core Insights - Nasdaq is set to implement a significant change by introducing 23-hour trading for U.S. stocks and ETFs, responding to the increasing demand for continuous trading access [1][2]. Trading Schedule Changes - The new trading schedule will extend from 16 to 23 hours on weekdays, featuring a day session from 4 a.m. to 8 p.m. Eastern Time, followed by a one-hour break, and a night session from 9 p.m. to 4 a.m. the next day [3][5]. - The trading week will commence on Sunday at 9 p.m. and conclude on Friday at 8 p.m. [4]. Market Context - The move is driven by the rising foreign ownership of U.S. equities, which reached $17 trillion last year [4]. - Currently, extended-hours trading operates in three sessions over 16 hours, but the new plan aims to streamline this into two longer sessions for better access for international traders [5]. Industry Trends - The push for 24-hour trading is gaining traction, with the SEC having approved the first 24-hour stock exchange over a year ago [7]. - Other broker-dealers, including Charles Schwab and Robinhood, have already adopted 24-hour trading capabilities for U.S. stocks and ETFs [7]. - Competitors like CBOE Global Markets and Intercontinental Exchange have also filed for extended trading hours with the SEC [8].

Core Insights - Cboe Global Markets, Inc. (CBOE) is a significant player in the financial exchange sector with a market capitalization of $26.1 billion, operating one of the largest derivatives and securities exchanges globally [1][2] Company Performance - CBOE's stock is currently trading 4.8% below its 52-week high of $262.98, achieved on November 12, and has seen a 5.7% increase over the past three months, outperforming the State Street Financial Select Sector SPDR ETF (XLF) [3] - Over the past 52 weeks, CBOE shares have surged 23.3%, significantly outpacing XLF's 9.3% increase, and on a year-to-date basis, CBOE is up 27.8% compared to XLF's 12.6% return [4] - Following a strong Q3 earnings report on October 31, CBOE's shares rose 3.7%, with total revenue reaching a record $1.1 billion, an 8.1% year-over-year increase, and adjusted EPS hitting a record high of $2.67, up 20.3% from the previous year [5] Competitive Position - CBOE has outperformed its competitor, Intercontinental Exchange, Inc. (ICE), which saw a 2% increase over the past 52 weeks and an 8.2% rise year-to-date [6] - Despite CBOE's strong performance, analysts maintain a cautious outlook, with a consensus rating of "Hold" and a mean price target of $256.86, indicating a 2.4% premium to current price levels [6]

Group 1 - Cboe Global Markets, Inc. will announce its financial results for Q4 2025 on February 6, 2026, before market opens [1] - A conference call with senior management will take place at 7:30 a.m. CT (8:30 a.m. ET) [1] - The conference call will be accessible via a live audio webcast on Cboe's Investor Relations website, with a replay available two hours after the call [2] Group 2 - Cboe Global Markets is recognized as the world's leading derivatives and securities exchange network [3] - The company offers advanced trading, clearing, and investment solutions across multiple asset classes, including equities, derivatives, and FX in North America, Europe, and Asia Pacific [3] - Cboe is dedicated to creating a trusted and inclusive global marketplace for sustainable financial futures [3]

Core Insights - Cboe experienced significant growth in 2025, particularly in its proprietary SPX options complex, which grew over 20% [2] - The firm announced strategic pivots, including plans to divest non-U.S. businesses and focus on retail and new markets [2] Company Overview - Craig Donohue is the new CEO of Cboe, marking his first appearance in this role [3] - The leadership team includes Jill Griebenow as CFO and Robert Hocking as Global Head of Derivatives [2]

Core Thesis - Cboe Global Markets, Inc. is viewed positively, with a current share price of $255.28 and trailing and forward P/E ratios of 27.76 and 26.60 respectively, indicating strong market confidence in the company's growth potential [1]. Strategic Priorities - CEO Craig Donohue emphasized disciplined financial management and a focus on long-term growth drivers while moving away from non-core areas [2]. - Retail trading remains robust despite lower volatility, with increased participation in options products, suggesting significant growth potential in this segment [2]. Growth Initiatives - Cboe aims to expand its retail presence through investor education and international partnerships, particularly in Asia-Pacific markets [3]. - There is potential for growth in 0DTE SPX contracts and single-stock options, which could enhance the company's product offerings [3]. - The company is exploring opportunities in prediction markets and assessing how its clearing infrastructure can support external participants [3]. Financial Performance - International data revenues have surged by 45%, primarily driven by growth from abroad as Cboe develops new data products and strengthens ties with retail brokers in Asia [4]. - Competitive dynamics in equities and options remain intense, with efforts to improve positioning in off-exchange equities and multi-list options while maintaining margins [4]. M&A Strategy - Cboe maintains a disciplined approach to mergers and acquisitions, focusing on larger, synergistic deals that enhance recurring revenues and align with core strategic objectives [4]. Market Performance - The company's stock price has appreciated approximately 20.89% since previous coverage, reflecting resilience during volatility and growth in retail options trading [5].

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgency to invest now [1][13] - The energy demands of AI technologies are significant, with data centers consuming as much energy as small cities, leading to concerns about power grid strain and rising electricity prices [2][3] Investment Opportunity - A specific company is highlighted as a critical player in the AI energy sector, owning essential energy infrastructure assets that are poised to benefit from the increasing energy demands of AI [3][7] - This company is not a chipmaker or cloud platform but is positioned as a "toll booth" operator in the AI energy boom, collecting fees from energy exports and benefiting from the onshoring trend driven by tariffs [5][6] Financial Position - The company is noted for being debt-free and holding a significant cash reserve, amounting to nearly one-third of its market capitalization, which positions it favorably compared to other energy firms burdened by debt [8][10] - It also has a substantial equity stake in another AI-related company, providing investors with indirect exposure to multiple growth opportunities without the associated premium costs [9] Market Trends - The article discusses the broader trends of AI, energy, tariffs, and onshoring, emphasizing that this company connects all these elements, making it a unique investment opportunity [6][14] - The influx of talent into the AI sector is expected to drive rapid advancements and innovation, further solidifying AI's role as a transformative force in various industries [12] Future Outlook - The potential for significant returns is highlighted, with projections suggesting a possible 100% return within 12 to 24 months, urging investors to act quickly [15][19] - The company is described as undervalued, trading at less than seven times earnings, which is attractive for investors looking for growth in the AI and energy sectors [10][11]

Core Insights - Cboe Global Markets plans to extend trading hours for its Russell 2000 Index (RUT) options to nearly 24 hours a day, five days a week, starting February 9, 2026 [1] - The addition of overnight trading sessions is expected to enhance investors' ability to respond to market events and manage risk more effectively [1][1] - Cboe's Global Trading Hours (GTH) have seen record volumes in 2025, increasing by 179% year-to-date compared to the full year 2022, indicating strong demand for overnight trading [1][1] Trading Hours and Options - RUT options will be available for trading during regular U.S. hours and will also trade from 8:15 p.m. ET to 9:25 a.m. ET the following morning, Monday through Friday [1][1] - Cboe offers a variety of index options during GTH, including S&P 500 Index (SPX), Mini-SPX (XSP), and Cboe Volatility Index (VIX) options [1][1] - The introduction of RUT options to GTH will provide investors with more tools for accessing U.S. equity markets, potentially increasing trading, hedging, and liquidity opportunities [1][1] Market Demand and Performance - Average daily volume in Cboe's RUT options has reached nearly 75 thousand contracts, a 66% increase compared to the full year 2022, as traders seek to manage risk [1][1] - The Russell 2000 Index is known for its volatility and sensitivity to interest rates, making RUT options a useful tool for trading small-cap volatility [1][1] - Cboe publishes the Cboe Russell 2000 Volatility Index (RVX) to track implied volatility for the Russell 2000, which has historically been higher than the VIX Index [1][1] Trading Features - RUT options and Russell 2000 Index Weeklys (RUTW) options are cash-settled, European-style options, eliminating the risk of early exercise [1][1] - Cboe offers a range of expirations for RUT options, including every weekday, end-of-month, and quarterly options, allowing for diverse trading strategies [1][1] - Cboe also plans to introduce Curb Trading Hours from 4:15 p.m. to 5:00 p.m. ET, Monday through Friday, further expanding trading opportunities [1][1] Company Overview - Cboe Global Markets operates as a leading derivatives and securities exchange network, providing trading, clearing, and investment solutions globally [1][1] - The company offers products across multiple asset classes, including equities, derivatives, and FX, in North America, Europe, and Asia Pacific [1][1] - Cboe is committed to fostering an inclusive global marketplace that supports sustainable financial futures for its participants [1][1]