CBOT tallies record-breaking 2006
January 4, 2007
BY Dave Nilles
The Chicago Board of Trade finished a good 2006 on a high note. CBOT Holdings Inc., the holding company for the CBOT, today announced records for revenue, net income and trade volume for 2006.
The fourth quarter turned out particularly well for the CBOT. In the quarter, the CBOT turned record revenue of $169.3 million and net income of $44.9 million. The company also reached a new record for daily trading volume, topping 7 million contracts.
In 2006, the CBOT achieved record revenue of $621.1 million. Net income was $172.2 million, which was the best ever for the company. It reflected a 125 percent increase compared with 2005's net income.
"Our record-setting results for the quarter and the year reflect the success of our strategic growth initiatives and our ability to capitalize on our scaleable business model," CBOT President and CEO Bernie Dan said.
Revenue growth was attributed to increased trading volume and higher average rates per contract, resulting in higher exchanges and clearing fees, the CBOT said. The company's financial release also showed a 19.5 percent increase in trading volume in 2006 compared to 2005. Annual volume reached 805.9 million contracts. It was the fifth consecutive year of record-breaking trade volume for the CBOT.
Included in the fourth quarter's trading volume were the CBOT's over-the-counter (OTC) Ethanol Calendar Swap contracts, which were launched in mid-December. OTC transactions take place "off-exchange," or in the cash or physical market, according to David Lehman, managing director and chief economist of the CBOT Commodities Product Group.
The contracts are for either forward-month or previous-month calendar swaps, which have identical terms except for how they are settled. A forward-month calendar swap for March, for example, will settle using the average of daily settlement prices for the April ethanol futures contract during the month of March, he said. A previous-month calendar swap would settle using the average daily settlement prices for ethanol futures contracts during February.
The CBOT's Ethanol Calendar Sweep contracts were the first exchange-cleared OTC products specifically tailored for the ethanol industry. "The CBOT has been at the forefront of the rapidly expanding ethanol market, and as it grows and matures we'll continue to create new and innovative opportunities and services for the ethanol industry," Dan said at an earnings conference call.
Another fourth quarter 2006 development was the CBOT's planned merger with the Chicago Mercantile Exchange Holdings Inc. (CME). The CBOT entered into a definitive agreement to merge with CME to create a global derivatives exchange. "Our decision to merge with CME was paramount in our efforts to secure a stronger future for the CBOT, while benefiting our market users," Dan said.
Dave Nilles is Online Editor for Ethanol Producer Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
Posted: 10:56 a.m. CST Wednesday, January 31, 2007
The fourth quarter turned out particularly well for the CBOT. In the quarter, the CBOT turned record revenue of $169.3 million and net income of $44.9 million. The company also reached a new record for daily trading volume, topping 7 million contracts.
In 2006, the CBOT achieved record revenue of $621.1 million. Net income was $172.2 million, which was the best ever for the company. It reflected a 125 percent increase compared with 2005's net income.
"Our record-setting results for the quarter and the year reflect the success of our strategic growth initiatives and our ability to capitalize on our scaleable business model," CBOT President and CEO Bernie Dan said.
Revenue growth was attributed to increased trading volume and higher average rates per contract, resulting in higher exchanges and clearing fees, the CBOT said. The company's financial release also showed a 19.5 percent increase in trading volume in 2006 compared to 2005. Annual volume reached 805.9 million contracts. It was the fifth consecutive year of record-breaking trade volume for the CBOT.
Included in the fourth quarter's trading volume were the CBOT's over-the-counter (OTC) Ethanol Calendar Swap contracts, which were launched in mid-December. OTC transactions take place "off-exchange," or in the cash or physical market, according to David Lehman, managing director and chief economist of the CBOT Commodities Product Group.
The contracts are for either forward-month or previous-month calendar swaps, which have identical terms except for how they are settled. A forward-month calendar swap for March, for example, will settle using the average of daily settlement prices for the April ethanol futures contract during the month of March, he said. A previous-month calendar swap would settle using the average daily settlement prices for ethanol futures contracts during February.
The CBOT's Ethanol Calendar Sweep contracts were the first exchange-cleared OTC products specifically tailored for the ethanol industry. "The CBOT has been at the forefront of the rapidly expanding ethanol market, and as it grows and matures we'll continue to create new and innovative opportunities and services for the ethanol industry," Dan said at an earnings conference call.
Another fourth quarter 2006 development was the CBOT's planned merger with the Chicago Mercantile Exchange Holdings Inc. (CME). The CBOT entered into a definitive agreement to merge with CME to create a global derivatives exchange. "Our decision to merge with CME was paramount in our efforts to secure a stronger future for the CBOT, while benefiting our market users," Dan said.
Dave Nilles is Online Editor for Ethanol Producer Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
Posted: 10:56 a.m. CST Wednesday, January 31, 2007
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