During the lightning round on the August 5 episode of CNBC’s Mad Money, host Jim Cramer responded to a caller asking about CME Group Inc. (NASDAQ:CME). He commented:
CME Group is very good. I’ve got to tell you, I like Cboe, too. I’ve always liked the companies that are involved with trading because they have monopolies or at least duopolies.
Cramer’s endorsement highlights the core economic moat that protects exchange operators like CME Group Inc. (NASDAQ:CME). As the world’s largest financial derivatives exchange, the company controls major market infrastructure across interest rates, equity indices, energy, agricultural commodities, and foreign exchange.
The Derivatives and Volatility Catalyst Behind Cboe’s July Rally
When evaluating CME Group Inc. (NASDAQ:CME) on August 5, Cramer explicitly brought up Cboe Global Markets Inc. (NASDAQ:CBOE), grouping the two together as prime examples of exchange operators with pricing power. His mention builds directly on commentary from the August 3 episode of Mad Money, where Cramer highlighted Cboe as one of July’s standout performers after gaining 27.8%. He remarked:
Now, in sixth place, there’s… Cboe Global Markets… big options marketplace, is up 27.8%. And that’s all about the volatility that gradually built throughout the month. Cboe also reported a solid quarter last Friday, giving its stock one more leg higher. I don’t think it’s expensive.
As the dominant venue for index options and volatility products like the VIX, Cboe serves as the natural counterpart to CME’s futures franchise.
Photo by Adam Nowakowski on Unsplash
Comparing Market Metrics Across CME and Cboe
Among hedge funds tracked by Insider Monkey, CME Group Inc. (NASDAQ:CME) maintains a significantly broader footprint than Cboe Global Markets Inc. (NASDAQ:CBOE). During the first quarter of 2026, 70 hedge funds held positions in CME Group, down from 74 in the prior quarter. Over the same period, Cboe’s hedge fund ownership shifted to 44 funds compared to 48 previously. The figures show that CME remains more widely held, even though ownership declined for both stocks.
At 21.88x forward earnings, CME Group Inc. (NASDAQ:CME) trades at a slight discount to Cboe Global Markets Inc.’s (NASDAQ:CBOE) 22.62x multiple. Cboe’s modest premium comes alongside strong recent performance in its options business, while CME offers exposure to the global derivatives market at a slightly lower earnings multiple.
Short interest across both exchange operators remains low, as neither figure show significant short pressure. However, market skepticism leans slightly higher against Cboe. Cboe carries a short interest of 2.98% of its float, compared to 1.81% for CME.
While we acknowledge the risk and potential of CME and CBOE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CME and CBOE and that has 10,000% upside potential, check out our report about this cheapest AI stock.
READ NEXT: Jim Cramer Reaffirms Buy Stance on Celestica (CLS) 25% Pullback and Jim Cramer on Microsoft (MSFT): “Glad We Held On to It Because They Did a Great Job”.
Disclosure: None. Follow Insider Monkey on Google News.
Hedge Fund Resource Center