What moat does CME Group have?

The advantage is the contract that already concentrates the liquidity and the clearing house where it is already settled. The trader goes where the volume is. That volume has moved from some contracts to others. It is not an exclusive. The moat narrows if a future's liquidity leaves for another clearing house, or if the year gives no volatility to trade.

How do you read the CME Group radar?

Health is not a bank's: customer collateral is not free capital. Quality is the commission margin after the clearing technology. Growth follows volume and volatility, not a concession. P/E valuation is read against a busy year, not against a flat one. Shareholder return is the dividend, crossed with the cash of a year without trades.

Which multiples matter for CME Group?

The P/E of a year of heavy volatility is not normal earnings. EV/EBITDA is read without treating customer margin as CME's debt. Do not use ICE's multiple as if Brent and the Treasury future were the same contract. A dash means the CME cache is cold.

What does this CME Group analysis leave out?

Not advice on CME. Vaultflake does not split rates, indices and agriculture and does not treat the liquidity as captive. This is not a 60% margin. Read the filings. A past dividend is not a right. The table is a snapshot, not a target price.

CME Group (CME) analysis

CME Group Inc.

Sector:Financials · Futures and Clearing

Country:United States

Profile and moat

CME Group is the market where interest-rate futures, index futures and agricultural commodities are traded, and the clearing house that settles them. Energy Brent sits more at ICE. Here the weight is the Treasury bond, SOFR and the index future. It is not the largest market on the planet by decree and not a monopoly.

The commission comes in when the contract moves. A year of quiet rates and little volatility is a weak year, even if the clearing house stays open. The margin customers post for clearing is not CME's profit: it is theirs. This report does not state a 60% operating margin.

The dividend comes from the commission, not from that collateral. It has to fit in the cash. It is not a guaranteed toll.

Sustainable Competitive Advantage

CME Group (CME) analysis

CME Group Inc.

Sector:Financials · Futures and Clearing

Country:United States

Profile and moat

The dividend comes from the commission, not from that collateral. It has to fit in the cash. It is not a guaranteed toll.

Sustainable Competitive Advantage

CME Group (CME) analysis

Profile and moat

CME Group (CME) analysis

Profile and moat

Radar axes

Limits of this report

Questions from this report

What moat does CME Group have?

How do you read the CME Group radar?

Which multiples matter for CME Group?

What does this CME Group analysis leave out?

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