Buried deep within Cboe Global Markets' Q1 2024 earnings transcript lies a clue. It's a small, almost insignificant percentage, a mere whisper in the grand symphony of financial data. Yet, it holds the potential to unlock a wave of explosive growth for the exchange giant. This unassuming figure? The mere 3% of SPX options activity currently taking place during Global Trading Hours (GTH). At first glance, it seems trivial. Just a sliver of overall trading. But consider this: GTH activity allows international investors to access Cboe's powerful suite of US-based derivative products during their local trading hours. It's a bridge across time zones, connecting global capital to Cboe's lucrative SPX and VIX complexes. Cboe executives, brimming with confidence, have repeatedly emphasized the 'unprecedented rise of the retail customer' and the 'globalization of markets.' They see these trends converging, envisioning a world where international retail investors, fueled by the same forces that drove the 0DTE revolution in the US, turn to Cboe's products to manage risk and express their trading strategies. Now, imagine that tiny 3% expanding. Even a modest increase, say, to 10% of SPX activity, would represent a 233% surge in GTH volume. This influx would translate into a significant revenue boost for Cboe, fueling earnings growth and driving shareholder value.

Why is this 3% so crucial? Why now?

Cboe's recent strategic moves offer compelling answers. They've completed major technology migrations in Australia and Japan, unifying their global equities platform and paving the way for a seamless, consistent trading experience across borders. They've revamped their liquidity provider programs in Europe, attracting more market makers and enhancing the depth and efficiency of their trading ecosystem. They're actively onboarding new international retail brokers, creating additional on-ramps for a global audience to access their products. Cboe is meticulously laying the groundwork, constructing a global highway for capital to flow freely to its doorsteps. The 3% is a gauge, a barometer of this burgeoning global demand. And the timing couldn't be more opportune. The world is awash in 'elevated macro uncertainty,' as Cboe executives aptly put it. Geopolitical tensions simmer, inflation persists, and interest rates climb. Investors, both institutional and retail, are grappling with a volatile landscape, desperately seeking tools to navigate these choppy waters.

Enter Cboe's volatility toolkit.

The SPX and VIX complexes, refined by years of innovation and bolstered by unparalleled liquidity, offer unparalleled versatility for managing risk, hedging exposure, and generating income. Cboe, armed with a powerful product suite and a global network, is poised to capitalize on this surge in demand. They're not waiting for volatility to drive volume; they're actively cultivating a more durable, recurring revenue stream, fueled by continuous engagement from a diverse, global customer base. As investors around the world seek refuge from the storm, Cboe, with its secret weapon of GTH expansion, stands ready to offer a safe harbor, a platform for navigating the complexities of the global marketplace. And those who recognize the significance of that tiny 3% may be handsomely rewarded as Cboe's global ambitions come to fruition.

Hypothesis and Numbers:

SPX Global Trading Hours Activity Growth

This chart illustrates the significant growth in SPX Global Trading Hours activity, highlighting the potential for further expansion. Data sourced from Cboe's Q1 2024 earnings transcript.

"Fun Fact: Cboe's iconic VIX Index, known as the 'fear gauge,' is calculated based on the prices of SPX options, reflecting the market's expectation of future volatility. So, as GTH activity increases, driving up SPX volume, it could potentially impact the VIX, further amplifying Cboe's influence on global markets."