Best Stocks: A company that's indispensable to its customers with a stock in a pristine uptrend
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CNBC
2 days ago
- CNBC
Josh Brown's 'Best Stocks in the Market': CBOE Global Markets
Josh Brown, CEO of Ritholtz Wealth Management, joins CNBC's "Halftime Report" to spotlight another name on his "Best Stocks in the Market."
CNBC
2 days ago
- CNBC
Best Stocks: A unique financial stock riding the options boom with a chart sent from heaven
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — In 1973, The Chicago Board of Trade launched a subsidiary that would allow traders to place bets on a new standardized contract based on stock prices. These contracts, similar to but separate from the CBOT's bread-and-butter commodity futures products, were called options. They carved out a single trading pit on the floor for these stock option contracts and standardized how they worked. At first, there were options on just sixteen publicly traded companies, like IBM. In due time, more were added. Stocks were extraordinarily volatile in the mid-1970s with back-to-back bear markets and lots of opportunities for both speculation and protecting portfolios. The business was a hit. When the early 1980's bull market got underway, this "Chicago Board Options Exchange" or CBOE (usually pronounced as C-Bow) grew into a hive of trader activity. In 1983, the first contract on a stock market index came along when the CBOE unveiled its S & P 100 options offering. If you've ever seen the ticker "OEX" cross the bottom of your CNBC screen, that's the one. Cboe Global Markets (CBOE) is now one of the best financial services businesses in the world and this week it made the Best Stocks in the Market list. Ever since the next generation of retail traders came along during the pandemic, it's been a bull run for options trading. In its July 3, 2025 report, Cboe said that June 2025 trading volume hit a new all-time record. They reported the highest ever quarterly average daily volume for S & P 500 options at 3.7 million contracts, and zero‑day-to‑expiry (0DTE) options at 2.1 million contracts. Zero days to expiration trading — which we refer to as 0DTE — continues to boom. Did you know that over 60% of S & P 500 option trades are 0DTE? It's wild given how new this type of contract is. Retail traders are estimated to be responsible for over half of this activity. Sean's going to give you the set-up on Cboe stock, which has been moving in a tightly wound, neat little uptrend all summer long. I'll be back at the end with a risk management comment. Best Stock Spotlight: Cboe Global Markets Inc (CBOE) On the list since: 7/22/2025 Sean — Cboe Global Markets (CBOE) made it onto the list this week. When I pulled up the chart, I knew I had to show Josh right away. The stock's lack of volatility is remarkable as you can see in the logarithmic chart since inception. The lack of volatility has given the stock a beta of 0.43 compared to the overall market's beta of 1.0, which means CBOE has about half the volatility of the S & P 500. For obvious reasons, this makes for an attractive risk-reward and many portfolio managers love building allocations with stocks like these. Despite its lack of volatility, CBOE has been anything but quiet. The stock has massively outperformed the S & P 500 since coming public 15 years ago, returning a cumulative 854% (inclusive of dividends) since inception vs. a 647% total return for the S & P 500, or 16% annualized vs 14% for the S & P 500. (data via YCharts). Ever since the trading boom of 2020, CBOE's fundamental outlook has been stellar. The increase in trading activity has led to an increase in the need for exchange-traded products as well as the underlying data tied to those products. S & P 500 options trading volume has been growing 8% a year over the last five years, while VIX options volume has been growing at a 15% annual clip. In addition to the increased popularity of its trading products, CBOE is also in the midst of adding more recurring, higher-quality subscription products so they can become less reliant on transaction volume over time. Cboe's non-transaction revenue business includes Data and Access Solutions (DnA), providing data, infrastructure, and global market access to its customers. The exchange's infrastructure and proprietary market data are getting leveraged into recurring revenue streams through subscription-based services. Unlike transaction-based revenues that fluctuate with market volatility, their DnA business provides steady, predictable income that complements the trading business. Said otherwise, the firm is leveraging higher-quality revenue. You can expect the market to award this improvement in "earnings quality" with a higher multiple. From 2020 through their last reported quarter, CBOE has grown revenues 5%, operating income 13%, and diluted EPS 14% on an annualized basis. CBOE is due to report next week on Friday, August 1st. Analysts expect Revenue of $575M up 12% year-over-year and EPS of $2.43, up 13% year-over-year. (Data via Quartr) Risk Management: Josh: If this were heaven, and not earth, this is what every stock chart would look like and we would just buy them all. You can see below how perfectly the buyers came in to save this name from a 200-day trend break during the market volatility in April. Investors in this name know that volatility is actually a good thing if you're the largest options exchange and clearing operation in the world. Earnings next week could produce a blip, which I would most likely ignore so long as the company does the number and guides up. For shorter-term traders, I'd use 220 as a pivot point. It retested that level in mid-June and bounced off it clean. If it gets below, there might be better set-ups elsewhere. Investors should obey the rising 200-day and check back every Friday close. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. INVESTING INVOLVES RISK. EXAMPLES OF ANALYSIS CONTAINED IN THIS ARTICLE ARE ONLY EXAMPLES. THE VIEWS AND OPINIONS EXPRESSED ARE THOSE OF THE CONTRIBUTORS AND DO NOT NECESSARILY REFLECT THE OFFICIAL POLICY OR POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC. JOSH BROWN IS THE CEO OF RITHOLTZ WEALTH MANAGEMENT AND MAY MAINTAIN A SECURITY POSITION IN THE SECURITIES DISCUSSED. ASSUMPTIONS MADE WITHIN THE ANALYSIS ARE NOT REFLECTIVE OF THE POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC" TO THE END OF OR OUR DISCLOSURE. Click here for the full disclaimer.
Bloomberg
3 days ago
- Bloomberg
At The Money: Getting Paid in Company Stock
Browse all episodes At The Money: Getting Paid in Company Stock At The Money Getting Paid in Company Stock Arrow Right 16:05 Equity-based compensation has become an increasingly popular form of compensation in the United States, especially in Tech and high-growth, VC-funded companies. Joey Fishman is a Senior Advisor at Ritholtz Wealth Management (RWM), where he assists clients with managing their stock, options, and equity compensation. He joins Barry Ritholtz to discuss essential information about earning pay in stock. Each week, 'At the Money' discusses an important topic in money management. From portfolio construction to taxes and cutting down on fees, join Barry Ritholtz to learn the best ways to put your money to work.
