This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

CME: Put Your Stock in This Options Exchange

Stocks in this article: CMENYXNDAQCBOEAMTD

John: CME Group (CME) was getting hammered with the rest of the financials which on the one hand is unfair because its not a bank, but on the other hand represents a tremendous trading opportunity. The reality is, the CME thrives in an environment like this. Chaos creates volatility -- massive volatility -- and that creates record trading volume across their various contracts. Although the price is reflective of what's happening in the market, this is the best thing that could happen for their earnings and with this type of action their earnings are going to be strong.

Let's review the T3/OP video with Jill and Scott to understand more on the fundamentals of the space and CME technicals before we get into into the options play.





Last August CME hit a low of 234.50 before rocketing up to $328.00. As of Wednesday's close this stock is trading at $239.21. I'm looking to buy September series $250.00 calls at these levels. I'm hoping we push through that August low and do a stop run, giving me a chance to get a better price on my call options -- but I'm fine with starting to nibble on them at current levels.

Now over to Jared for his way to play the positive bias...

Jared: One theme this week has been the record trading activity on U.S. exchanges. TD Ameritrade (AMTD) reported that trading volumes on Monday were the largest in its history, with new money coming into trading accounts from bottom-picking investors. ( WSJ) Trading volume at CBOE reached a new all-time high for the second day in a row on Monday ( CBOE), and CME reported a new all-time high in trading volume on Tuesday, with nearly 26 million contracts traded. ( Marketwatch). CME noted that all-time product highs were reached for gold futures and options. In short, investors want to buy (and sell, and buy and sell again) what the exchanges are offering.

CME has performed well in recent months relative to its peers. Since April, the stock is down around 16%, while issues like NASDAQ OMX Group (NDAQ) and NYSE Euronext (NYX) have declined by 24% and 28%, respectively. CBOE Holdings (CBOE) has fared marginally better, but with greater return volatility. Figure 1 shows the performance of these names in percentage terms.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters