Jim Cramer Says “CME Has Lots of Options and Futures for Bitcoin and Ethereum”

CME Group Inc. (NASDAQ:CME) is one of the stocks Jim Cramer shed light on. Cramer discussed the positives around the company despite a downgrade by UBS in July, after the company posted its earnings. He remarked:

“CME Group, the parent of the Chicago Mercantile Exchange, the world’s leading derivative marketplace, is a nearly $100 billion company you almost never hear about, right? It’s up 18% year to date, down slightly from its June highs… CME Group generated 16% earnings growth. Veteran Chairman, CEO, Terry Duffy… told us, ‘Demand for CME Group benchmark futures and options reached an all-time high in Q2 as clients around the globe turned to our markets to manage their business risk across asset classes.’ Oh, and their average daily volume also rose 16%. These are record numbers…

If the market calms down, which you know, I don’t think it will, the exchanges will likely suffer, and that’s why UBS downgraded CME from Buy to Neutral after its quarter because they don’t see how this kind of high volume can continue. I disagree with them…

Finally, for CME Group and Cboe Global Markets, there’s another dynamic working in their favor: the proliferation of derivatives trading, especially from retail traders. Modern brokerage platforms like Robinhood have democratized access to options and futures, which mostly trade on the CME and the Cboe. This is something that CME Group CEO Terry Duffy called out during his latest conference call, noting that ‘In the second quarter, over 90,000 new retail traders participated in our markets for the first time.’ That’s a 56% increase versus the same period last year. That’s huge, but it’s going to get bigger and bigger, and it’s not just derivatives. We’ve also seen an explosion in exchange-traded products like ETFs, including leveraged single stock ETFs, which you know, I don’t care for, but they’re very popular with home gamers. These things all have to list and trade somewhere. Plus, CME Group and Cboe in particular have also started to do plenty of business in crypto. CME has lots of options and futures for Bitcoin and Ethereum and other top cryptocurrencies…”

Jim Cramer Says "CME Has Lots of Options and Futures for Bitcoin and Ethereum"

Stock market data on a laptop screen. Photo by Alesia Kozik on Pexels

CME Group Inc. (NASDAQ:CME) operates global markets for trading futures and options across asset classes. The company also provides clearing, risk management, and market data services.

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Disclosure: None. This article is originally published at Insider Monkey.