North American Equities Year End Update

Oliver Sung recently sent a note to customers reflecting on accomplishments of Cboe's North American Equities team in 2024 and looking ahead to 2025.

All,

I hope everyone is enjoying the holiday season! As we wrap up the year, I wanted to share some highlights from 2024 and upcoming plans for next year.

In 2024 we remained focused on delivering solutions to you, our valued customers, and creating an enhanced trading experience on our exchanges around the world. Our locally optimized, globally consistent framework helped drive our global growth as we strive to provide tailored solutions to participants everywhere. In North American Equities specially, we made a few key changes that will have an impact now and in the future.

Most recently, we successfully transitioned Cboe’s EDGA Equities Exchange from an inverted venue to a maker-taker venue while implementing a high rebate, tier-free pricing model. Thank you to all our customers who helped champion these changes, your input is incredibly valuable and we are already seeing positive results. I look forward to sharing more about the benefits of this change early next year.

This year also marked the start of the migration of the NEO platform to Cboe technology. This migration is still expected to be completed by March 3, 2025, and is the final Cboe technology migration. We are excited to have all our trading books on one best-in-class technology platform, creating greater efficiencies and opportunities to enhance the trading experience.

Market Analysis

Throughout 2024, Cboe’s North American Execution Consulting team continued to conduct in-depth market analyses that provide insight into the state of the equities markets in the U.S. and Canada. Here are a few of my favorite insights from the team this year:

The Growth of Canadian Depositary Receipts

Since Cboe Canada launched Canadian Depositary Receipts (CDRs) in July 2021, they have become one of the fasted growing investment products in Canada and demand continues to grow. CDRs saw a 75% quarter-over-quarter increase in the first-quarter of 2024, with an average daily notional traded volume of over $140 million CAD. Retail investors showed strong interest in CDRs, comprising about one-third of all CDR volume. With this interest, Cboe Canada continues to innovate and expand CDR listings, making it easier for Canadian investors to access the most popular publicly listed U.S. companies, in Canadian dollars, with a built-in currency hedge. Read more.

The Benefits of Retail Price Improvement

Retail Price Improvement (RPI) Orders enables liquidity providers to offer price improvement in 1/10 of a cent increment better than the National Best Bid or Offer (NBBO) for Retail orders only. Cboe’s RPI program offers significant advantages to liquidity providers, as well as retail investors, and aims to enhance the trading experience for all. Read more.

Connecting Blocks with Cboe BIDS Canada

Cboe BIDS Canada has grown as a venue to source unique block liquidity and is the leading Conditionals provider in Canada with over 80% market share. The platform allows anonymous trading of large blocks of equities and now is the leading block trading platform in the country. Cboe BIDS continues to grow its presence throughout Canada, Australia and Japan. Read More.

U.S. Equities Volume Drivers

This two-part series highlights how the U.S. equities market share continues to evolve with new exchanges and market participants, like retail traders, entering the landscape. U.S. equities volumes have grown with the rise of retail trading, especially in sub-dollar securities. Notably, sub-dollar securities trading volumes increased from 12% of total volume on Cboe’s EDGX Equities exchange in the first quarter of 2018 to a peak of 40% in the second quarter of 2024. Read more.

Looking Ahead to 2025

In 2025 we are excited to continue striving to enhance your trading experience with innovative products and solutions on reliable exchanges.

The migration of the NEO platform to Cboe technology will be a key focus to start the year. We appreciate all of you who are currently participating in testing and working with us to prepare for a smooth migration in March. When the migration is complete, we look forward to embracing the benefits of having all our exchanges on a unified technology platform.

Additionally, we will monitor participation on EDGA Equities Exchange, following the transition to a maker-taker model in November, and continue exploring opportunities to improve trading on the exchange. As the overall equities market environment continues to evolve, we will seek ways to meet your changing needs through our exchanges, like EDGA, as well as our products and services.

Furthermore, we are looking forward to growing Periodic Auctions on our BYX Exchange and improving the retail trading experience on EDGX Exchange. We are also excited for the continued growth of Cboe listed ETPs on our BZX Exchange in the new year and look forward to continued innovation on Cboe BIDS Canada.

Finally, the market analyses our Execution Consulting Team is known for will be a priority again in the new year. Behind the scenes, we spent much of this year migrating our internal market data to a new platform, again creating enhanced efficiencies. Now that this is complete, we are excited to provide even more market insights in 2025.

As always, please reach out to me or a member of the North American Equities Team with any questions.

Happy holidays,

Oliver Sung |Vice President, Head of North American Equities