NDAQ · Forward model · Market Services · Bear case
What has to happen in Market Services
Model as of
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Market Services
The exchange itself: U.S. equity options, U.S. cash equities, and the Nordic and Baltic markets, reported net of the transaction rebates and clearing fees Nasdaq collects and passes straight through. The volume metric is the disclosed U.S. equity options industry average daily volume, 66.5 million contracts a day in the basis quarter against 52.5 million a year earlier, and the monetisation metric is $5.11M of net revenue per million contracts of that daily industry volume. The rate has sat between $5.06M and $5.98M for ten quarters while the volume behind it grew 54%.
Latest: $393M (2031Q2E)
| Period | Value |
|---|---|
| 2024Q1 | $237M |
| 2024Q2 | $250M |
| 2024Q3 | $266M |
| 2024Q4 | $268M |
| 2025Q1 | $281M |
| 2025Q2 | $306M |
| 2025Q3 | $303M |
| 2025Q4 | $311M |
| 2026Q1 | $317M |
| 2026Q2 | $340M |
| 2026Q3E | $343M |
| 2026Q4E | $346M |
| 2027Q1E | $350M |
| 2027Q2E | $353M |
| 2027Q3E | $356M |
| 2027Q4E | $358M |
| 2028Q1E | $361M |
| 2028Q2E | $364M |
| 2028Q3E | $367M |
| 2028Q4E | $369M |
| 2029Q1E | $372M |
| 2029Q2E | $374M |
| 2029Q3E | $377M |
| 2029Q4E | $379M |
| 2030Q1E | $381M |
| 2030Q2E | $384M |
| 2030Q3E | $386M |
| 2030Q4E | $388M |
| 2031Q1E | $390M |
| 2031Q2E | $393M |
Assumptions & reasoning
- The volume metric is an INDEX, not the whole business. U.S. cash equities and the Nordic and Baltic markets ride inside the per-unit rate, which is why that rate is $5.11M rather than a per-contract fee, and why both traces are relabelled to say what they are.
- U.S. options ADV was chosen over U.S. cash equity ADV because its monetisation rate is the tighter of the two: $5.06M to $5.98M over ten quarters, against $15.9M to $23.1M per billion shares for the cash-equity index over the same ten.
- Net revenue is the only honest basis here. Gross Market Services revenue was $1,372M in the quarter against $340M net, because $712M of transaction rebates and $320M of brokerage, clearance and exchange fees are collected and handed straight back to market participants.
- The rate carries share loss as well as price. Nasdaq's total matched options share has drifted from 30.8% in 2023 Q4 to 29.1%, and its cash-equity matched share from 16.3% to 15.1%. Nasdaq publishes no revenue capture per contract, so the two cannot be separated.
- The margin is the Market Services divisional margin, 67.4% of NET revenue, taken from the segment note. It is the highest in the company and it is on a base already net of pass-throughs.