One can't miss the flurry in securities exchanges as companies scurry for an initial public offering. Heightening the frenzy is better trading volumes for all goods and commodities as well as launch options of futures contracts.
The long lineup of trade on the bourses includes equities, commodities, derivatives, debt and ETFs or exchange traded funds to name a few. And though volatility and uncertainty are so commonplace, investors no longer look harried by these market vices.
In fact, this seems the right time to invest in securities exchanges. Here's why:
When a volatile price environment prevails, hedging traders can lower the risk through futures contracts. And in the heavy trading that ensues, the exchanges stand to gain from higher transaction and listing services fees that improve their revenues. Plus, increased activities in exchanges indicate economic stability. The exchanges too are doing their bit by making their offerings meatier.
Attractive Features
Almost all securities exchanges are adding convenient operations and trading features. The Nasdaq OMX Group, Inc. (NDAQ – Analyst Report) launched a unique solution to provide marketplaces with an extremely adaptable index calculation platform – the Nasdaq Index Calculation System. The platform highlights intuitive, index calculation aimed at making computation of multi-asset, multi-currency indices convenient.
The exchange is also exploring the blockchain technology that will make the digital ledger technology available to private companies issuing and transferring shares on the Nasdaq Private Market.
Recently, CBOE Holdings, Inc. (CBOE – Analyst Report) launched 10 options-based strategy performance benchmark indexes to use options as risk-management and yield-enhancing investment tools.
In mid July, Intercontinental Exchange Inc. (ICE – Analyst Report) announced that it will launch the cotton futures contract later this year upon approval by the U.S. policymakers. Last month, the company launched Eris standard interest rate futures contracts denominated in Euro and Pound Sterling.
Scope from Overseas Turmoil
Economic turmoil in foreign countries also keeps exchanges active. This was evident during the recent Greece uncertainty and the Chinese equity market gloom.
With a host of companies like SoulCycle, Vizio, Square, Sunrun, Philadelphia Energy Solutions, Amplify Snack Brands, among others, filing for their IPOs, the securities exchanges are well poised for top-line growth.
Technological Advancement
Moreover as the securities exchanges mostly trade electronically, efficiency, exposure, speed and security are ensured. For the same reason, pits are losing importance with minimum contribution to overall trade on exchanges and companies are taking harsh decisions to close them down. On the flip side, with increasing dependence on technology, comes the risk of technical glitches that sometimes halt trading and affect the U.S. benchmarks.
Memories of a stock exchange snafu on the day of the much-awaited initial public offering of Facebook Inc. (FB – Analyst Report) are still fresh in investors' minds. Early this month, another technical crash halted trading on the New York Stock Exchange (part of ICE).
Capital Strength
