Euronext Sees ‘Solid Quarter’ as Revenue Jumps 14% to €374.7M

The European New Exchange Technology (Euronext) said its saw a “solid quarter” in its financials for the second quarter of 2022.

The pan-European exchange group’s consolidated revenue and income for the period climbed 14% to €374.7 million when compared to its posting from the same period last year.

The group, which operates regulated markets in Belgium, France and Italy, among other countries, shared the 2022 second quarter financial results with Finance Magnates on Thursday.

During the first quarter of 2022, the exchange had reported a 58.8% jump in its revenue and income. The figure came in at €395.7 million.

Euronext said its revenue growth in the recent quarter was driven majorly by the “dynamic performance of non-volume related activities.”

This growth was also supported by a “strong performance from trading operations supported by volatile market conditions and solid revenue capture.”

Moreover, Euronext’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) also climbed 12.3% quarter-over-quarter (QoQ) to €221.7 million.

“This represents an adjusted EBITDA margin of 59.2%, down -0.9 points compared to Q2 2021 due to ongoing strategic and integration costs. Pro forma the Borsa Italiana Group acquisition, Q2 2022 adjusted EBITDA was up +2.5% year-over-year,” Euronext explained.

Euronext’s Forex Market

From its forex market, Euronext said its generated a €7.3 million in forex trading revenue, a 27.6% rise from second quarter of 2021.

During the first quarter of 2022, the revenue came in at €7.2 million, which was higher than the €6.1 million for Q1 of 2021.

Meanwhile, the exchange saw a corresponding 27.6% jump in its average daily volume revenue from spot forex trading during the second quarter of 2022.

The revenue rose from $18,617 million in 2020 to $23,639 million last month.

Euronext explained, “Euronext FX trading volumes and revenue benefited from the continued positive momentum started in Q1 2022 with heightened volatility.

“Over the second quarter of 2022, average daily volumes of US$23.6 billion were recorded, up +27.0% compared to Q2 2021.

“On a like-for-like basis at constant currencies, FX trading revenue was up +12.8% in Q2 2022 compared to Q2 2021.”

In June, Euronext’s spot forex trading remained flat in line with industry trend.

The exchange reported a marginal increase of 0.2% in spot forex trading volume.

The volume came in at more than $510 billion. However, the jump was almost 20% when compared year-over-year.

Cash, Derivates & Fixed Income Markets

Similarly, Euronext recorded jumps in its cash, derivatives, and fixed income activities.

After the first quarter, or in April, these markets had crashed across board on a month-over-month basis.

However, in Q2 2022, the cash trading revenue shot up 7.4% to €75.3 million as a result of “higher volumes due to sustained market  volatility 
Volatility

In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.

In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
Read this Term and solid revenue capture.”