TABB Equity Digest: Q4-2017

With the Q4 Equity Digest, TABB started tracking exchange market data revenues vs the newly published SIP data released by the CTA and UTP organizations. While US exchange transactional and market data revenues have experienced downward pressure since 2010, exchange connectivity, and non-traditional data, technology and services revenues have been increasing at a 35% CAGR over the past seven years growing from $94million in 2010 to $858 million in 2017. While the connectivity aspect of this cost is funded directly by trading operations, the bulk of this revenues is generated from other businesses and business lines, such as selling content and services to corporations (NASDAQ Corporate Services) or selling pricing and reference data to other areas of the financial community (ICE Data Services). We will be tracking these numbers quarterly. Given the low level of volatility through Q4 2017, TRF volumes hit close to record levels (39.56% of all trading) in January 2018, missing an all-time record by 0.02% sent in April 2010. Goldman Sachs also greatly expanded their OTC trading during the fourth quarter of 2017, extending their market share leadership in non-exchange, non-ATS trading from 25.7% of bulge-bracket (Barclays, BaML, Citi, CS, DB, GS, JPMC, MS, and UBS) OTC trades in October 2017, to 39% of the bulge brackets OTC shares traded in December 2017.