Financial Exchanges (CBOE, CME, ICE, NDAQ, MKTX, LSEGY, JPXGY, DBOEY, etc.)

[Rainier]

I've started researching the various financial exchanges. I like businesses that act like tollbooths or have an essential asset that would be extremely hard to replace. So, in theory, it looks like these companies have pretty durable businesses with decent moats. It is obviously competitive, but it seems like regional or niche exchanges typically just get bought up once they've achieved a decent size.

 

I've been looking at:

CME

CBOE

ICE

NDAQ

MKTX

LSEGY

DBOEY

JPGXY

HKXCY

TMXFF

ASXFY

 

Does anyone have thoughts (positive or negative) on these or others that might be worth looking at? I know that some of them have niches that they specialize in like commodities, bond trading, derivatives, and some own ancillary businesses. But are there any other things that differentiate them? Any pitfalls to avoid?

[formthirteen]

I own about 5 from this list. Might want to add OTCM and ENX.PA which are pretty cheap. Overpaying is the biggest risk IMO. Cryptoexchanges like COIN are also interesting. I owned MKTX for a while but didn't like the ride and fell off.

[KJP]

Miami International Holdings (MIAX) is a August IPO that you may want to add to your list.  I'm not too familiar with it but I believe it's primarily focused on derivatives exchanges.  Market cap is ~$4 billion.

[economonoc]

BOLSY = B3 SA Brasil Bolsa Balcao, São Paulo stock exchange

[schin]

8 hours ago, Rainier said:

I've started researching the various financial exchanges. I like businesses that act like tollbooths or have an essential asset that would be extremely hard to replace. So, in theory, it looks like these companies have pretty durable businesses with decent moats. It is obviously competitive, but it seems like regional or niche exchanges typically just get bought up once they've achieved a decent size.

 

I've been looking at:

CME

CBOE

ICE

NDAQ

MKTX

LSEGY

DBOEY

JPGXY

HKXCY

TMXFF

ASXFY

 

Does anyone have thoughts (positive or negative) on these or others that might be worth looking at? I know that some of them have niches that they specialize in like commodities, bond trading, derivatives, and some own ancillary businesses. But are there any other things that differentiate them? Any pitfalls to avoid?

 

@Rainier The economics of these exchanges are pretty amazing. I've been reviewing their Valueline write-ups - CME, CBOE, ICE seems the most interesting to me. I think scale matters here.

 

@formthirteen - I would be interesting in your thought on what overpaying for some of these are. I feel some of these can be like Visa and Mastercard over the long run. You can be roughly right and still make a lot of money.

Edited December 18, 2025 by schin

[Marco Van Basten]

I have owned Tel-Aviv stock exchange (TASE IT) for six years.  

[dealraker]

I own most all the exchanges for some time, CME and NDAQ for over 20, ICE for 15 or so--- and others.  When I post about them others keep stating that they aren't as good a business as in the past and whatnot- or they buy them and then sell on the "pop" and such.

 

I just hold the stocks.  Muti-baggers on top of multibalggers.  Call me sleepy Joe, I'm just going to sleep with them in my bed with me.  Others are obsessed with beating Mr. Market.  Me?  Just give me a good business...I'll be happy to own it.

 

 

Edited December 18, 2025 by dealraker

[formthirteen]

11 hours ago, schin said:

@formthirteen - I would be interesting in your thought on what overpaying for some of these are. I feel some of these can be like Visa and Mastercard over the long run. You can be roughly right and still make a lot of money.

 

Someone on the tweet platform said the bubble has already burst and that it was in high-quality stocks, not AI. Many examples in this thread, LSEG, OTCM, etc, have gone approximately nowhere in 5 years.

 

OTCM is a good example of "overpaying". The stock has been trading at the same levels for years despite having high-quality metrics (margins, roe, roic, etc). I think Mr. Market is looking at OTCM's non-existent EPS and revenue growth and saying "I'll let you grow into the valuation" or something like that.

 

MKTX is another example. I owned it for a while, but Mr. Market and I both agreed that I was overpaying. Maybe I need to look at MKTX again. It's bouncing above support levels as tea-leaf readers would say.

 

I also own SSNC which was in the doldrums for a while too but is now picking up wind.

Like dealraker I don't mind if the stock goes nowhere. I might trade in and out if management plays stupid games (LSEG), but then I remember that these are great businesses and get back in. Don't be afraid of overpaying if you plan on holding for 5-10 years. However, you could say the same about the SP500 index today trading at ~31 P/E.

 

There are definitely future multibaggers in this thread. Let others here know if you find one:
https://ideas.repec.org/p/akf/cafewp/33.html

 

[coffeecaninvestor]

17 minutes ago, formthirteen said:

OTCM is a good example of "overpaying". The stock has been trading at the same levels for years despite having high-quality metrics (margins, roe, roic, etc). I think Mr. Market is looking at OTCM's non-existent EPS and revenue growth and saying "I'll let you grow into the valuation" or something like that.

I’ve owned OTCM on and off for the past 8 years or so. Great business but CEO is conservative with capital allocation (debt leverage and buybacks) which I think limits the potential upside in a stock like this. Overall growth has slowed which is why it hasn’t moved the last 5 years, but their revenue growth tends to jump around with more speculative trading activity. I think at 21x earnings they are at their historic median so not super cheap or expensive. Growth has picked up last 2 Q’s so if earnings get back to double digit growth it’s probably a decent bet. I was playing it as a way of playing growth in international trading.. I thought if internal stocks continued to outperform that ADR trading would increase, and that might be more sustainable source of growth. They also made an acquisition of EDGAR which I think also might have been partly why the stock has been flat around concerns of integration. 

[Marco Van Basten]

@formthirteen, LSEG in my opinion, has horrible management and the deal for Refinitiv was idiotic, again, my opinion.  

[formthirteen]

9 minutes ago, Marco Van Basten said:

@formthirteen, LSEG in my opinion, has horrible management and the deal for Refinitiv was idiotic, again, my opinion.  

 

I agree. I both sold LSEG and bought it back this year. Management can't kill these stocks?

[thowed]

17 hours ago, KJP said:

Miami International Holdings (MIAX) is a August IPO that you may want to add to your list.  I'm not too familiar with it but I believe it's primarily focused on derivatives exchanges.  Market cap is ~$4 billion.

 

There's a good recent deep dive on this on Substack.  Haven't read yet.  Am not convinced it's quite good enough yet, but interesting.

 

Great sector overall - I hear ya @dealraker - Murray Stahl has said some good stuff about them if you work your way through the HK archives.

[Fly]

20 hours ago, formthirteen said:

I own about 5 from this list. Might want to add OTCM and ENX.PA which are pretty cheap. Overpaying is the biggest risk IMO. Cryptoexchanges like COIN are also interesting. I owned MKTX for a while but didn't like the ride and fell off.

 

Along the lines of crypto exchanges BKKT might be interesting, ICE is a major owner. Also real dark horse but TZROP for the takeout before IPO in 2026 and then possibility of tokenized asset trading getting more attention. 

[bizaro86]

Recent VIC piece on OTCM I thought was pretty good - I owned in the past (>10 years ago) and sold on a bounce at some point... Just bought back now this week. 

[schin]

2 hours ago, formthirteen said:

 

Someone on the tweet platform said the bubble has already burst and that it was in high-quality stocks, not AI. Many examples in this thread, LSEG, OTCM, etc, have gone approximately nowhere in 5 years.

 

OTCM is a good example of "overpaying". The stock has been trading at the same levels for years despite having high-quality metrics (margins, roe, roic, etc). I think Mr. Market is looking at OTCM's non-existent EPS and revenue growth and saying "I'll let you grow into the valuation" or something like that.

 

MKTX is another example. I owned it for a while, but Mr. Market and I both agreed that I was overpaying. Maybe I need to look at MKTX again. It's bouncing above support levels as tea-leaf readers would say.

 

I also own SSNC which was in the doldrums for a while too but is now picking up wind.

Like dealraker I don't mind if the stock goes nowhere. I might trade in and out if management plays stupid games (LSEG), but then I remember that these are great businesses and get back in. Don't be afraid of overpaying if you plan on holding for 5-10 years. However, you could say the same about the SP500 index today trading at ~31 P/E.

 

There are definitely future multibaggers in this thread. Let others here know if you find one:
https://ideas.repec.org/p/akf/cafewp/33.html

 

@formthirteen - I don't have a lot of patience lately for sub-optimal management.  So, that LSEG thing, I might need to dig in further on... Do you feel any of those companies have pretty smart, owner operators? Do you look at insider ownership?

[schin]

1 hour ago, formthirteen said:

 

I agree. I both sold LSEG and bought it back this year. Management can't kill these stocks?

 

I don't think there are many businesses that are idiot proof... But, the stock will have a huge discount until they leave... or the margins will be subpar and eventually, the moat will erode.

[schin]

6 hours ago, dealraker said:

I own most all the exchanges for some time, CME and NDAQ for over 20, ICE for 15 or so--- and others.  When I post about them others keep stating that they aren't as good a business as in the past and whatnot- or they buy them and then sell on the "pop" and such.

 

I just hold the stocks.  Muti-baggers on top of multibalggers.  Call me sleepy Joe, I'm just going to sleep with them in my bed with me.  Others are obsessed with beating Mr. Market.  Me?  Just give me a good business...I'll be happy to own it.

 

 

@dealraker

 

Of your basket of exchanges, which is your favorite?  I was looking into CME and ICE.... but honestly, with all this trading via Citadel, IBKR, Robinhood, etc.... their volume shouldn't go lower.... plus, NDAQ is looking into 24 hour trading.. that cannot hurt the business model.

 

This might be a good sector to buy... Is there an ETF to buy the barrel? It might be just shooting fish in a barrel.

[dealraker]

4 hours ago, schin said:

@dealraker

 

Of your basket of exchanges, which is your favorite?  I was looking into CME and ICE.... but honestly, with all this trading via Citadel, IBKR, Robinhood, etc.... their volume shouldn't go lower.... plus, NDAQ is looking into 24 hour trading.. that cannot hurt the business model.

 

This might be a good sector to buy... Is there an ETF to buy the barrel? It might be just shooting fish in a barrel.

schin, I just sort of stay the course of watching stuff that I believe is long term sustainable and buy when the stocks show what I think is meaningful weakness.  So I have several hundred thousands of ICE but bought recently.  I didn't put any homework in updating my research or whatnot, I just bought following through with my monkey see (profits and sustainable) monkey do.  400 shares added at $151.28 on 10/30/2025.  My model is buy good business, I don't obsess over seeking lower-lowest PE or such, I never buy the cheap and good businesses to me are ALWAYS worth a PE of 20.  When I bought ICE I looked around, none of the others seemed a good buy to me.  I haven't looked since.

 

WELLSTRADE IRA *6385

10/30/2025

400 @ $151.28

$160.56

Edited December 18, 2025 by dealraker

[formthirteen]

2 hours ago, schin said:

Do you feel any of those companies have pretty smart, owner operators? Do you look at insider ownership?

 

SSNC and OTCM seem to have smart owner operators and high insider ownership. I don't remember if any of the others have smart owner operators.

 

2 hours ago, bizaro86 said:

Recent VIC piece on OTCM I thought was pretty good - I owned in the past (>10 years ago) and sold on a bounce at some point... Just bought back now this week. 

 

Thanks. I read it today and bought more OTCM. I've also added to DB1 and ENX recently.

[Lance]

10 hours ago, schin said:

@dealraker

 

Of your basket of exchanges, which is your favorite?  I was looking into CME and ICE.... but honestly, with all this trading via Citadel, IBKR, Robinhood, etc.... their volume shouldn't go lower.... plus, NDAQ is looking into 24 hour trading.. that cannot hurt the business model.

 

This might be a good sector to buy... Is there an ETF to buy the barrel? It might be just shooting fish in a barrel.

Checkout BCDF.  It holds quite a few of those on the original posters list as well as some others.

 

Thanks

Lance

[lnofeisone]

12 hours ago, Fly said:

 

Along the lines of crypto exchanges BKKT might be interesting, ICE is a major owner. Also real dark horse but TZROP for the takeout before IPO in 2026 and then possibility of tokenized asset trading getting more attention. 

I stumbled upon TZROP recently. Do you have more info? The two things that stood out to me so far were: 1) you have to buy it on tzero platform 2) the board can declare 10% of revenue as dividend. I did sign up for t0 but the market they show was limited (4 securities). I couldn't wrap my head around the business model here. 

[Fly]

On 12/18/2025 at 11:52 PM, lnofeisone said:

I stumbled upon TZROP recently. Do you have more info? The two things that stood out to me so far were: 1) you have to buy it on tzero platform 2) the board can declare 10% of revenue as dividend. I did sign up for t0 but the market they show was limited (4 securities). I couldn't wrap my head around the business model here. 

 

I bought some long ago in 2018 when they did their SAFT raise, so needless to say it hasn't done well. The business model was supposed to revolve around the "tokenize everything" theme but there were management/regulatory struggles along the way. They have accumulated a fair amount of regulatory approvals and licenses in recent years that could potentially pan out if this tokenization narrative gains steam (I'm not optimistic).

 

But put all that aside for the moment, the TZROP token does provide 10% revenue as a dividend in the event the company ever makes a profit. The company also wants to have a traditional IPO in 2026, but nobody will touch it with this TZROP overhang. My thesis is they will either buy out or convert TZROP into common stock as a part of the IPO process. Most TZROP holders joined in 2017-18 at $8-10/share, so I expect a valuation at that level or higher in order to entice a majority of holders to accept a deal.

 

BYON (Used to be Overstock) is the largest holder:

 

https://investors.beyond.com/news-events/press-releases/news-details/2025/Beyond-Inc--Directs-tZERO-Board-of-Directors-to-Prioritize-Specific-Tasks-to-Capitalize-on-Present-Market-Conditions/default.aspx 

Edited December 22, 2025 by Fly

[schin]

Is there a reason why many of your gravitate to the smaller exchanges when the larger securities (ICE, CME, NDAQ)  have roughly the same margins and has scale/marketing/larger balance sheet as a tailwind?

 

I love a David and Goliath story, but you have to give me some odds for David.

[Rainier]

30 minutes ago, schin said:

Is there a reason why many of your gravitate to the smaller exchanges when the larger securities (ICE, CME, NDAQ)  have roughly the same margins and has scale/marketing/larger balance sheet as a tailwind?

 

I love a David and Goliath story, but you have to give me some odds for David.

I like ICE and NDAQ and I think they are likely the two best businesses among all of them. I just think they’re valued more richly than some of the others at the moment (which makes sense). I’ll gladly buy both if they have a pullback and would prefer to have those two as my highest concentrations in the basket.

 

[schin]

19 hours ago, Rainier said:

I like ICE and NDAQ and I think they are likely the two best businesses among all of them. I just think they’re valued more richly than some of the others at the moment (which makes sense). I’ll gladly buy both if they have a pullback and would prefer to have those two as my highest concentrations in the basket.

 

 

@Rainier - Based on the table above, all seem to be in the PE range of 21-24 (twenties).  All the metrics seem comparable too. I was looking at OTCM and you're not getting a lot of discount for their smaller size/market capitalization..so, that's why I was inquiring with the group. It's seems like the same fish in the same barrel... so minus well got for the larger market leaders unless I'm missing something.

 

It's almost like Visa and Mastercard to me. They have reach valuations, but they're legal oligopolies.  

 

I know people say you cannot go wrong.. but, there's always a Coke to a Pepsi...  Like for the longest time, there's a premium to the front runners... like back in the day, Intel was a better market performer than AMD.  Oracle always performed better than Sybase and Informix.