Futures exchanges are making a lot of money these days. A week after CME Group announced its fourth-quarter year-over-year profits tripled, the Intercontinental Exchange said its quarterly profit jumped 70%.
However, much as CME Group's share price slid on its profit report, so did the value of ownership in ICE – nearly 4% on the news.
Expectations had something to do with that; the market wanted more. But a big reason for ICE's share price hit was costs. ICE fourth-quarter expenses were up 30%.
Also weighing on the stock prices of both ICE and CME Group are regulatory unknowns. The Obama administration is proposing a new regulatory framework that could pare bank speculation – or, on the other hand, potentially push more OTC volume onto regulated exchanges, depending on the analyst you ask.