The story is simple. Stock trading is getting commoditized and NDAQ and NYX are the companies that have the most to lose in this deal. As NDAQ and NYX acquire more businesses in other continents, the stock holders stand to lose in terms of stock dilution and more debt in the balance sheets. CME has fared better as it is not affected as much as NDAQ and NYX in its core futures market. If NYX or AMEX enters this market which should happen sooner or later, CME should see the impact of cut throat competition.
- Creating a global network of stock exchanges - advantage NYX
- Trend - advantage CME
- Size - CME has the edge followed by NYX.
- Revenues - CME has the edge because of the profit margins. NYX comes in next followed by NDAQ.
- Stock dilution - CME followed by NDAQ followed by NYX.
- Listing companies - NDAQ fees are lower. Advantage NDAQ.
- Cost cutting upside - NYX has been a non profit. ( Grasso's pay excess is one example ). More opportunities to cut costs to make it a leaner organization. Advantage NYX. CME is in better shape as competition is not forcing it to cut prices.
- Moving the big board to electronic trade - CME has the advantage for now.
- Valuation - Competition makes valuation difficult for NYX and NDAQ. CME is also highly valued at the moment.
I would keep watching these stocks to see how the competitve landscape changes. One can expect significant moves up and down based on perceived and real advantages in the market.