Would you like to invest – or perhaps even trade – a company that benefits from increased market volatility?
If so, then you’ll be very interested in today’s Trade of the Day on Intercontinental Exchange (NYSE: ICE).
Intercontinental Exchange operates regulated exchanges for commodity, financial, fixed-income, and equity markets in the United States, the United Kingdom, the European Union, Asia, Israel and Canada.
Its marketplaces for trading and clearing cover a vast array of asset classes, including energy and agricultural commodities, metals, interest rates, equities, credit derivatives, exchange-traded funds, bonds, and currencies.
In other words, the more people who trade, the better Intercontinental Exchange does.
And recently, given the increase in market volatility, it has had a strong year.
Intercontinental Exchange’s quarterly revenue growth (year over year) is up 11.8%, and its quarterly earnings growth (year over year) is up 15.5%. According to a recent volume release on November 5, these strong growth numbers are expected to continue.
For instance, in the month of October, Intercontinental Exchange reported that open interest (OI) on futures and options listings is up 8% year over year (and up 17% year over year from the end of 2018).
Specifically, in the energy sector…
- Oil OI is up 4% year over year.
- Other crude and refined products OI is up 13% year over year.
- Total natural gas OI is up 5% year over year.
In the agriculture and metals sector…
- Agriculture and metals OI is up 4% year over year.
- Sugar OI is up 4% year over year.
- Cocoa OI is up 13% year over year.
In the equities and interest rates sector…
- Total interest rate OI is up 16% year over year.
Can this strength continue?
I say yes for two reasons…
First, as we head into the close of the calendar year, I personally believe that market volatility will continue to increase…
But will we pull back from the historic highs we’re seeing right now (similar to what we witnessed last year at this time)?
Or will we continue to set new highs going into 2020?
Whatever happens, Intercontinental Exchange is positioned to win.
Second, Intercontinental Exchange just announced that it is partnering with Abu Dhabi National Oil Company (ADNOC) – and nine of the world’s largest energy traders – to launch ICE Futures Abu Dhabi.
This will create a new exchange in the Abu Dhabi Global Market that will host the world’s first “Murban” crude oil futures contracts (Murban is the ADNOC’s most plentiful oil grade, which accounts for about 1.7 million barrels a day – half of the crude pumped in the United Arab Emirates).
Action Plan: Add those two trigger catalysts together and buying Intercontinental Exchange anywhere between the support band that runs from $89 to $90 represents a strong entry opportunity.
About Bryan Bottarelli
Whether it was selling the Star Wars figures he collected as a little boy for 50 times their value or using the $125 he made cutting grass to buy a Michael Jordan rookie card that he later sold for $1,500, it was always clear that Bryan Bottarelli was a born trader – possessing the unique ability to identify opportunities and leverage his investments.
Graduating with a business degree from the highly rated Indiana University Kelley School of Business, Bryan got his first job out of college trading stock options on the floor of the Chicago Board Options Exchange (CBOE). There, he was mentored by one of the country’s top floor traders during the heart of the technology boom from 1999 to 2000 – trading in the crowded and lively Apple computer pit. Executing his trades in real time, Bryan learned to identify and implement some of his most powerful trading secrets… secrets that rarely find their way outside the CBOE to be used by individual traders.
Recognizing the true value of these methods, Bryan tapped into his entrepreneurial spirit and took a risk. He walked off the CBOE floor and launched his own independent trading research service called Bottarelli Research. From February 2006 to December 2018, Bryan gave his precise trading instructions to a small, elite group – most of whom have been followers ever since.
As a “play tactician,” Bryan uses his hands-on knowledge of floor trading to shape opportunities and chart formations into elegant, powerful and profitable recommendations. And by using the same hedging techniques taught by professional floor traders, Bryan is able to deliver his readers remarkable gain opportunities while strictly limiting their total risk.
Along the way, Bryan has developed a cumulative track record that could impress even the most successful hedge fund manager.
He now spends his days moderating one of the most elite trading research forums ever created: The War Room.
