Intercontinental Exchange, Inc. operates regulated exchanges, clearing houses, and listings venues for commodity, financial, fixed income, and equity markets in the United States, the United Kingdom, the European Union, Singapore, Israel, and Canada. It operates through three segments: Exchanges, Fixed Income and Data Services, and Mortgage Technology. The company operates marketplaces for listing, trading, and clearing an array of derivatives contracts and financial securities, such as commodities, interest rates, foreign exchange, and equities, as well as corporate and exchange-traded funds; trading venues, including 12 regulated exchanges and six clearing houses; and offers futures and options products for energy, agricultural and metals, financial, cash equities and equity, over-the-counter, and other markets, as well as listings and data and connectivity services. It also provides fixed income data and analytic, fixed income execution, CDS clearing, and other multi-asset class data and network services. In addition, the company offers proprietary and comprehensive mortgage origination platform, which serves residential mortgage loans; network and closing solutions that provides customers connectivity to the mortgage supply chain and facilitates the secure exchange of information; data and analytics services; and Data as a Service for lenders to access data and origination information. Intrinsic Exchange Group has partnership with NYSE and NYSE to launch a new asset class to power a sustainable future. Intercontinental Exchange, Inc. was founded in 2000 and is headquartered in Atlanta, Georgia. The company is publicly listed on NYSE under the ticker “ICE”.
Our considerations
While most investors look often at major stock indices like the S&P 500, the NASDAQ 100 or the Dow Jonson Industrial Average, more often than not the companies which operate the exchanges are overlooked. Among those companies there is the Intercontinental Exchange (ICE), which is also the owner of the New York Stock Exchange, the second largest stock exchange in the world by trading volume and the largest by market capitalization. ICE is not only the owner of NYSE, but also the owner of many major marketplaces, indices, clearinghouses and services that span equities, options, fixed income and mortgages.
A lot of ICE’s revenues are generated from channels which do not directly require strong market performance, since market participants require the financial data provided by the company regardless of the market conditions. This factor makes ICE’s revenues pretty stable and its also the reason behind the weird price action when compared to most other volatile businesses in the financial sector. Also, it’s important to note that the business model of ICE makes it resilient against corrections: indeed, during periods in which fear is the dominant emotion, trading volume increases, therefore making the company earn more. These characteristics make the company look like a defensive stock to own in periods of uncertainty, heavily reflected by its low beta of 0.86.
The company operates under three segments: Exchanges, Fixed Income & Data Service, and Mortgage Technology.
Support authors and subscribe to content
This is premium stuff. Subscribe to read the entire article.
