Eli Abboud

Eli Abboud from Bank of America sought clarification on the structural versus cyclical growth in BGC Group's energy segment, asking about new client acquisition and whether firms are increasingly hedging energy exposure due to volatility. He also questioned if the combined ECS market share post-OTC acquisition has surpassed the sum of the standalone entities and how BGC's OTC/block energy volumes compare in growth to listed energy volumes. Finally, Mr. Abboud inquired about the revenue recognition timeline for FMX futures, specifically regarding fee holidays, and an update on the launch and progress of treasury futures.

Answer

John Abularrage, Co-Global Head of Brokerage and CEO of BGC Group, confirmed a proliferation of new players and traditional buy-side firms in the ECS business, noting that BGC's market outperformance is due to strategic investments and strong growth in key asset classes like oil, gas, and shipping. He affirmed that the ECS market share has indeed exceeded the combined standalone BGC and OTC Global entities, demonstrating "one plus one equals three" benefits. JP Aubin, Co-Global Head of Brokerage and CEO of BGC Group, emphasized that the block business is growing, benefiting significantly from market volatility, and BGC is the largest listed broker. Mr. Abularrage added that fee structure changes for FMX futures early adopters will begin in summer, two years after the deal, and the launch of treasury futures will follow the successful scaling and market share achievement of SOFR futures.

Eli Abboud followed up on the energy segment (ECS), asking about the balance between structural and cyclical growth, and if BGC is seeing new client acquisition from firms revisiting energy hedging due to volatility. He also questioned if ECS market share has exceeded the combined BGC and OTC Global standalone shares, and if there's evidence of 1+1=3 integration benefits. Additionally, he inquired about the timetable for FMX Futures revenue recognition (fee holidays) and an update on Treasury futures.

Answer

John Abularrage (Co-Global Head of Brokerage and CEO, BGC Group) confirmed a proliferation of new players in ECS, both for hedging and traditional buy-side, contributing to growth beyond cyclical factors, particularly in areas of investment like oil, refined products, power, natural gas, and shipping. He stated that ECS market share has "without question" exceeded the combined standalone entities, with clear benefits in oil, gas, and refined products. JP Aubin (Co-Global Head of Brokerage and CEO, BGC Group) added that the block business is growing, benefiting from market volatility. Mr. Abularrage noted that fee structure changes for FMX Futures early adopters will occur around "the beginning of this summer" (two years post-deal), and Treasury futures will launch after SOFR achieves its target, as the current focus is on building the SOFR marketplace.

Eli Abboud from Bank of America asked about the slower ramp-up of treasury futures compared to SOFR, seeking to understand any additional complexities. He also questioned how many of the nine connected FCMs have open interest on FMX, the drivers of the strong FX business performance, and the reasons for voice trading outperforming electronic trading in FX.

Answer

Co-CEO John Abularrage stated there are no additional impediments for treasury futures and expects them to follow SOFR's successful trajectory, adding that nearly all connected FCMs have open interest on the platform. Co-CEO & COO Sean Windeatt attributed the FX strength to a 'healing' market, normalized options volatility, and growth in the FMX FX platform. He explained that the voice outperformance in FX reflects client choice during a period of returning volatility but expects a gradual shift back toward electronic trading as the market stabilizes.

Elias Abboud of Bank of America asked about the product roadmap for FMX following the launch of treasury futures, specifically regarding longer-dated products and options. He also inquired about FMX's path to profitability, its current cash burn, and its potential normalized profit margins. Additionally, he requested an update on the status of Howard Lutnick's share divestment.

Answer

Co-CEO Jean-Pierre Aubin reiterated the three-year plan for FMX, focusing on connectivity in year one before expanding products. Co-CEO Sean Windeatt clarified that the cash burn for FMX futures is zero for BGC, as it is funded by FMX's equity partners. He projected FMX would reach breakeven in the short term and achieve long-term margins of 40-50%, comparable to other exchanges. Regarding the share divestment, Mr. Windeatt stated that all Senate Ethics Committee standards will be met, no open market sales are expected, and the 90-day deadline is approaching.

Eli Abboud questioned MarketAxess's capital allocation strategy given the U.S. credit electronification slowdown versus faster-growing areas like emerging markets and munis, and requested an update on the opening and closing auction initiative.

Answer

CEO Chris Concannon explained that investments in block solutions are highly efficient as their new X-Pro technology scales globally across product sets (EM, U.S. credit), delivering multiple protocols with high returns. He provided an update on matching solutions, noting Mid-X's growth since its Q4 launch and plans for more daily matches. For closing auctions, he detailed its recent broader rollout after a Q4 pilot, highlighting participation from 3 dealers and 11 buy-side clients, $2 billion in notional orders staged, and strong client interest, expecting gradual growth for large block trades.

Eli Abboud asked if the slowdown in US credit electronification has influenced MarketAxess's capital allocation strategy, specifically regarding investments in US credit versus faster-growing areas like emerging markets or munis. He also requested an update on the opening and closing auction initiative and its early returns.

Answer

CEO Chris Concannon explained that investments in block solutions offer high returns across product sets (EM, US credit) due to a global protocol approach on a unified technology stack. He highlighted the growth of the MIDX matching solution and provided an update on the newly launched closing auction, which is in broader rollout after a pilot phase, showing exciting participation from dealers and buy-side clients, with over $2 billion in notional orders staged.

Eli Abboud questioned the significant increase in Open Trading adoption in October, reaching 39% of credit volume, despite only modest volatility compared to previous periods of heightened market stress.

Answer

CEO Chris Concannon attributed the stronger Open Trading penetration (up to 34% in October, 43% in high yield) to new sources of liquidity. He cited the addition of systematic hedge funds and large investment managers leveraging their own automation tools to provide responses, thereby supporting liquidity even in lower volatility environments. He noted this reflects a longer-term investment in enabling clients to provide liquidity.

Eli Abboud inquired about the stronger open trading adoption in October, which reached 39% of credit volume, the highest since the regional bank crisis, despite only modestly increased volatility.

Answer

CEO Chris Concannon acknowledged the muted volatility in October but attributed the open trading increase to new sources of liquidity. He cited the addition of systematic hedge funds and large investment managers providing responses to other investors' RFQs, some leveraging their own automation tools. He also noted higher penetration in high-yield open trading, reaching 43% in October.

Eli Abboud of Bank of America inquired about the drivers behind the strong performance in Europe, where volumes were up 21% year-to-date, asking what was causing the share gains and which protocols or customer channels were particularly strong.

Answer

CEO Christopher Concannon attributed the robust European growth to successfully 'firing on all three initiatives.' He cited high client adoption of the new block trading solution, which has rich dealer content, strong growth in portfolio trading with PT volume up 64% in July, and progress in the dealer-to-dealer business following the full rollout of MidX across the Eurobond market.

Elias Abboud asked about the motivation for acquiring the remainder of RFQ-hub, its potential financial impact, and the strategic priority of becoming a more cross-asset platform.

Answer

CEO Christopher Concannon stated the acquisition provides a multi-asset platform for ETFs and derivatives. The key synergy is offering their large fixed-income client base the ability to trade fixed-income ETFs alongside bonds, choosing the most efficient execution method. He highlighted the opportunity to leverage MarketAxess's large global client network for distribution. CFO Ilene Bieler noted that its financial contribution, currently visible in 'equity in earnings of unconsolidated affiliate,' will be consolidated into operating results post-acquisition.

Elias Abboud inquired about the geographic client mix for the emerging markets business and the potential impact of U.S. tariffs on trading volumes from American asset managers.

Answer

CEO Christopher Concannon detailed a highly diversified client base for emerging markets: approximately 30% from the U.S., 40% from EMEA, and the remainder from APAC and Latin America. He argued this global diversification insulates the business from region-specific policies like U.S. tariffs, stating that broader macro factors like interest rates and local economic health are the primary drivers of investor demand.

Eli Abboud, an Equity Research Analyst at Bank of America, inquired about the contribution of new broker onboardings in 2024 and 2025, including Robinhood and APAC brokers, to the strong SPX volumes in 2025, and the pipeline for further broker additions in 2026.

Answer

Global Head of Derivatives Rob Hocking stated that while specific SPX attribution isn't provided, Robinhood's options volume continues to grow. He highlighted strong international demand, particularly from APAC, with Korea seeing 7 out of 10 identified local brokers now offering SPX options, up from zero two years prior. Taiwan also launched SPX and VIX options in Q4, with more expected in 2026, contributing to significant GTH and regular trading hours volume growth.

Elias Abboud inquired about the status of Cboe's option on Trading Technologies, its expiration, and the strategic value of a larger pre-trade footprint.

Answer

CFO Jill Griebenow confirmed that Cboe has not exercised its option on Trading Technologies and that the option has not expired. She declined to provide further details on the terms, stating only that the company evaluates opportunities that make strategic and financial sense.

Eli Abboud asked about the sequential decline in the dollar value of 605 quoted spreads, inquiring if strong performance came from non-equities and requesting granularity on asset class contributions. He also asked about Virtu's exposure and materiality to the growing ETF market, including the contribution of the create/redeem business, in light of expected record ETF fund launches and the SEC's ETF share class proposal.

Answer

Co-President and Co-COO Joe Molluso and CEO Aaron Simons explained that the strong performance was driven by a favorable operating environment, increased volatility, and elevated equity share volumes, emphasizing Virtu's global, scaled presence beyond just retail flow. They highlighted the meaningful impact of incremental capital and a record quarter for Virtu Execution Services (VES) across all products and geographies. For ETFs, Joe Molluso noted Virtu is a very large player and Authorized Participant, with the growing share class touching almost every part of their business, though specific quantification is difficult. He added that more product structure is generally beneficial.

Eli Abboud asked about the sequential decline in 605 quoted spreads, inquiring if strong performance stemmed from non-equity areas and requesting granularity on asset class contributions to sequential growth. He also asked for an update on Virtu's exposure to the ETF market, the materiality of expected record ETF fund launches in 2026, and the contribution of the create/redeem business to overall PNL.

Answer

Co-President and Co-COO Joe Molluso explained that the strong performance was driven by a favorable operating environment, including increased volatility and equity share volumes, and underlying drivers like asset rotation across dollars, fixed income, currencies, and commodities. He emphasized Virtu's global, scaled presence beyond retail flow, noting the impact of increased trading capital and a record quarter for Virtu Execution Services (VES) across all products and geographies. CEO Aaron Simons confirmed that non-customer businesses performed very well. Regarding ETFs, Joe Molluso stated it's difficult to quantify the impact but confirmed Virtu is a very large player and an Authorized Participant (AP) in many ETFs, with the growing share class and electronification generally being positive for the firm, touching almost every part of its business.

Eli Abboud asked about Virtu Financial's timeline for customer market making in options, whether it's a near-term or long-term objective, and if M&A could be part of the options roadmap. He also questioned the sequential decline in market making revenue despite a smaller decline in 605 quoted spread opportunity.

Answer

CEO Aaron Simon clarified that the immediate focus is on excellent options trading, with customer market making being a potential future outcome if the business scales. Co-President and Co-COO Joseph Molluso stated that M&A would be considered if returns are superior to internal growth, but currently, incremental capital is directed towards growing the business. He also explained that while 605 indicators were down, Virtu Financial's broader global operations, including strong performance in crypto, commodities, and Virtu Execution Services (VES), contributed to overall performance.

Elias Abboud asked about Adena Friedman's previous comments on the difficulty for Nasdaq to own an Alternative Trading System (ATS) and whether, if SEC rules change, there's an M&A opportunity in the off-exchange space or if Nasdaq plans to compete organically.

Answer

Adena Friedman, Chair and CEO, expressed encouragement regarding the SEC's focus on innovation and Nasdaq's desire for flexibility to offer ATS solutions as part of its client offerings. She noted that current exchange rules are codified and make it difficult to innovate, and Nasdaq is excited to explore involvement in the off-exchange space if a more flexible framework is provided.

Eli Abboud referenced Adena Friedman's previous comments at an SEC CFTC joint roundtable regarding the challenges Nasdaq faces in owning an Alternative Trading System (ATS). He asked for further elaboration on these comments and whether, should SEC rules change, Nasdaq would pursue M&A opportunities in the off-exchange space or opt to compete organically with existing off-exchange venues.

Answer

Adena Friedman, Chair and Chief Executive Officer of Nasdaq, expressed encouragement regarding the SEC's focus on fostering innovation in securities markets. She emphasized Nasdaq's desire to be a holistic provider to clients, noting that current exchange rules limit their ability to offer flexible solutions. Friedman stated that having the flexibility to operate an ATS as part of their client offerings and tapping into more off-exchange trading is a significant interest for Nasdaq, anticipating a more flexible regulatory framework from the SEC.

Eli Abboud inquired whether the BioCatch announcement represents a one-off partnership or a strategic adjustment for Verafin, and if Verafin could evolve into a platform provider with other firms paying for network access.

Answer

Adena Friedman, Chair and CEO of Nasdaq, stated that Verafin is architecturally a platform, built for integration via modern APIs. She described the BioCatch partnership as seamless, integrating pre-transaction signals with Verafin's at- and post-transaction analytics to create a complete fraud solution. She agreed that this is the first, but sees other partnership opportunities going forward, enhancing Verafin's capabilities and value to clients.

Eli Abboud inquired about the BioCatch announcement, asking if it's a one-off partnership or a strategic adjustment for Verafin, and whether Verafin could evolve into more of a platform provider by allowing other firms access to its network.

Answer

Adena Friedman, Chair and CEO, confirmed that Verafin is architecturally a platform, built for seamless integration through modern APIs. She explained that BioCatch, a scaled global business, focuses on pre-transaction signals, and integrating their analytics with Verafin's at- and post-transaction analytics creates a complete fraud solution, adding significant value and easing workflows for SMBs. Friedman stated that while BioCatch is the first, Nasdaq sees other opportunities for partnerships, indicating a strategic direction towards expanding Verafin's platform capabilities.

Eli Abboud, on behalf of Craig Siegenthaler at Bank of America, asked about the impact of tariffs on CME's physical commodities business and whether it has affected trading dynamics relative to European alternatives.

Answer

Senior MD & Global Head of Commodities Markets Derek Sammann explained that global uncertainties, including tariffs, are driving a realignment of physical supply chains and record results for CME's commodities complex. He stated that tariffs create price dislocations and basis risk, which in turn increases the need for risk management and drives volume in futures and options. This has led to record activity from both commercial and speculative clients, with notable growth from APAC and EMEA.

Eli Abboud, on behalf of Craig Siegenthaler at Bank of America, questioned the impact of tariffs on CME's physical commodities business and whether it has affected trading dynamics.

Answer

Derek Sammann, Senior MD & Global Head of Commodities Markets, detailed that global uncertainties, including tariffs, are driving a realignment of physical supply chains and record results for CME's commodities complex. He explained that tariffs create price dislocations and basis risk, which directly increases the need for risk management and boosts trading volume, particularly in options, across both commercial and speculative client segments.