Greetings, welcome to the CME Group second quarter 2023 earnings conference call. During this presentation, participants are in a listen-only mode. Afterwards, we'll conduct a question-and-answer session. At that time, if you have a question, press the 1, followed by the 4 on your telephone. If at any time during this conference you need to reach an operator, press star 0. It's my pleasure to turn the conference over to Adam Minick. Please go ahead. Good morning. I hope you're all doing well today. We will be discussing CME Group's second quarter 2023 financial results. I'll start with the safe harbor language, then I'll turn it over to Terry. Statements made on this call and in the other reference documents on our website that are not historical facts are forward-looking statements. These statements are not guarantees of future performance. They involve risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any statement. Detailed information about factors that may affect our performance can be found in the filings with the SEC, which are on our website. Lastly, on the final page of the earnings release, you will see a reconciliation between GAAP and non-GAAP measures. With that, I'll turn the call over to Terry. Thank you, Adam, thank you all for joining us this morning. As Adam said, we released our executive commentary earlier today, which provides details on the second quarter of 2023. I will make a few brief comments on the quarter and current outlook, Lynne will summarize our financial results. In addition to Lynne, we have other members of our management team present to answer questions after the prepared remarks. As we mentioned last quarter, 2023 is setting up to be an extremely favorable backdrop for risk management. The continued geopolitical uncertainty and the increasing cost of capital for businesses are just a couple of the things that have helped us deliver our financial results for the quarter. The benefit of CME Group's diverse product portfolio, spanning six asset classes, was on display. ADV across our commodities asset classes increased 20%, with 34% growth in agricultural products, 27% growth in metals, and 9% in energy. Interest rates, average daily volume of 11.3 million, was up 6% for the quarter and is up 11% compared with the first half of 2022. Despite a substantial decline in equity market volatility, our equity class delivered average daily volume of 6.2 million contracts during Q2. Our non-U.S. ADV was 6.3 million contracts for the quarter, including double-digit year-over-year growth in ags, metals, and energy. Options again played a critical role in Q2, with ADV growth of 20% to 4.7 million contracts, including the highest quarterly agricultural options ADV on record, up 32% from Q2 last year. Our product innovation in this area has driven strong growth with new participants and more product choice to more precisely match risk as clients continue to look for ways to protect their portfolios in these uncertain times. As it relates to our rates market, expectations of short-term rate changes up or down, and the divergent economic data continued to drive risk management. As we saw with the recent resolution of the debt ceiling, the Treasury bill issuance increased dramatically. Over time, we expect that more coupon issuance and ongoing debt financing will contribute to greater hedging needs for years to come. On the commodity side, exports are increasing the demand for risk management using our benchmark agriculture and energy products. With this favorable backdrop, we will continue to focus on opportunities to accelerate growth, including our recent announcement with DTCC to increase cross-margining opportunities for the Treasury markets. Our ongoing focus on product innovation and data services continues to enhance trading opportunities for our clients. We believe the strong underlying environment, combined with our strategic execution across growth initiatives, positions us for accelerated growth in coming years. I'll turn the call over to Lynne for the second quarter financial results. Thanks, Terry. During the quarter, CME Group generated $1.4 billion in revenue, up about 10% compared with a strong second quarter last year. Clearing and transaction fees grew over 9%, while market data revenue increased 8% versus Q2 2022. Expenses on an adjusted basis were $452 million for the quarter and flat versus the first quarter at $374 million, excluding license fees. This quarter, our investment in the cloud migration was approximately $15 million. Our adjusted operating margin for the quarter expanded to 66.8%, up over 250 basis points compared to the same period last year. CME Group had an adjusted effective tax rate of 23.3%, which resulted in adjusted net income of $836 million, driving diluted earnings per share of $2.30, both up 17% from the second quarter last year. In addition to our expanding margins, the strength of our operating model was evident this quarter as we delivered an increase of approximately $120 million in both revenue and adjusted net income compared to last year. Capital expenditures were approximately $22 million, and CME Group paid dividends during the quarter of $400 million. Our ending cash balance was approximately $2 billion. As you can see with the current results, the entire team at CME Group is focused on growing the business. We have delivered double-digit adjusted earnings growth in each of the last 8 quarters. Although it is challenging to predict volumes or market conditions over the short term, when you look at the last 5, 7, or 10-year period, we have grown our earnings by a compound annual growth rate of 10%- 12% per year, despite multiple periods of zero interest rate policy and the impacts of the pandemic on the global economy. As Terry mentioned, we're in a favorable environment for risk management, and we're taking a number of actions designed to accelerate our growth going forward through customer expansion, new product and service innovation, and enhancing capital efficiencies. Given this, our goal as a management team is to deliver growth in the coming decade above these historical averages. Terry, I'll turn the call back to you. Thank you, Lynne. We are very pleased with the continued strong financial performance of the company. Before I open the call for questions, I'd like to ask Tim McCourt and Derek Sammann to comment briefly on the recent trends that we are seeing in short-dated options products. I'll go to Tim first. Tim? Thanks, Terry. We are pleased with the performance of our equity options on futures, which year-to-date grew 1.3 million contracts per day. Short-dated options, including Zero Days to Expiration or 0DTE options, remain a strong driver of our multiyear growth. Volume in our same-day expiring options is up 33% from last year and up 220% since 2021, and now make up 27% of our equity options volume. It is important to also note we are seeing volume and open interest growing across the entire maturity curve. Year-to-date, equity options are up 6% compared to a record year in 2022, with particular strength in Nasdaq options and Russell 2000 options, which are both up double digits. This strong growth story further demonstrates that value customers continue to derive from trading products on the most important equity indices at CME Group. While short-dated options have been largely an equity story to date, we're beginning to see expansion to other parts of the portfolio, which Derek will speak to now. Thanks, Tim. As we've discussed in recent quarters, options have become a larger part of our global customers' risk management and trading strategies. Year-to-date, average daily volume in our options franchise across all asset classes is up 26%, driven by interest rates, metals, and equities, and our non-U.S. options business is up 33% through June. Within this larger growth story, we've seen growing demand for weekly options expirations across all asset classes, with weekly options volume up 21% year-to-date and growing to 26% of total options trading. In addition to equities, commodities traders have similarly embraced shorter-dated expirations, which allow our global customers to hedge specific event risks, such as crop reports and OPEC meetings. Agricultural weekly options were up 168% in the second quarter, which contributed to a record quarter for agricultural products overall. In energy, our WTI weekly options grew 126% versus second quarter last year, while our gold weekly options were up 33% year-over-year. The strength of our options franchise allows CME Group to uniquely deliver significant capital and operational efficiencies, and meets our customers' needs for short-dated options to help them most effectively manage risk across their entire portfolio. With that, we can now open the call for questions. Thank you. If you would like to register your question, please press the one followed by the four on your telephone. You'll hear a three-tone prompt to acknowledge your request. If your question has been answered and you'd like to withdraw your registration, press the one followed by the three. One moment, please, for the first question. Our first question comes from the line of Benjamin Budish with Barclays. Please go ahead, sir. Hi there. Thanks so much for taking the question. I wanted to go back to a comment that you made, Lynne, in your prepared remarks, just about sort of positioning the business to kind of grow faster than the historical average over the next decade. If you could maybe unpack that a little bit, what are sort of like the key elements that you see? Is it sort of a global increase in just need to manage risk? Is it more customers? Is it sort of increasing RPC, more volatility? How do you kind of think about, you know, what that looks like over the next decade, as you indicated? Sure, I'll start, and I think a number of my colleagues will want to jump in here. I think the growth story is one that we've been talking about for a while. It's a number of the levers that we look at, if that's a new customer expansion, if that's international growth. New product in-innovation has been certainly a big focus, looking at the OTC alternative products, as well as, looking at capital efficiencies. I don't know if, Julie, if you want to comment on a few of those initiatives that are underway. Yeah, I mean, the certainly the cross-margining initiative is one that our clients are quite excited about and one that we have, you know, talked about for a number of years. Delivering that is going to be an important thing. Capital efficiencies continues to be at the top of their list, and a very important thing in order to deploy more capital and do more trading at CME Group. I think the macroeconomic environment is quite positive across a number of our asset classes. Feedback from our clients, you know, is that they are using our markets to hedge those growing risks. As, you know, as well as, you know, a need been seen that the increased Treasury issuance on the horizon, that's going to mean more hedging from broker-dealers as well. You know, buy- side, again, I think across the segments, you know, we're sensing quite a bit of positivity and, you know, as we continue to roll out more products, you know, the options. T hat Derek and Tim talked about earlier, also just another highlight, that we're giving our clients a lot of different instruments to be able to express, you know, their forward expectations about the marketplace, and we feel we're very well positioned from our team being able to support them globally. That is certainly part of the international growth that we have commented on and believe it still suits us quite well for the future. We also feel real good about our data services business, you know, delivering the 8% growth and the number of new products, services, and analytics that the team is working hard to deliver. In some cases, things that we had not previously, you know, rolled out to our customer based on our data. I think all of those things give us a positive outlook for the future. Thanks, Julie, and thanks, Lynne. Ben, hopefully, that gave you some color on what we're thinking here at the Exchange. Yep, very helpful. Thanks, guys. Thank you. Thank you. Our next question comes from the line of Dan Fannon with Jefferies. Please proceed with your question. Thanks. Good morning. I guess a little bit of a follow-up on that. Just, you know, you've had good volumes in the first half of the year, but the investor comments and concerns continues to be about, you know, sustainability of that and potentially, you know, the worst, or I'm sorry, the best being behind you. As you think about, you know, kind of all the growth opportunities you see, and you highlighted already, maybe, you know, pick the one or two that you could that you would highlight here in the short term, and then maybe expand a bit upon the DTCC partnership and what we should think about in terms of how that gets rolled out and maybe the timing and the potential implications of that agreement. Dan, thank you for your question. You got a couple of questions in there. The DTCC, we did put out the release with DTCC just a couple of weeks back. We're hoping. You know, we're waiting on regulatory approval, which we are expecting, and hopefully, we will have that implemented, you know, going into the first quarter of 2024. We feel fairly confident about that now. Otherwise, we wouldn't have put out the release. We are looking at that, and again, I think you recall, going back many quarters, a couple of years back, when Sean Tully gave you some figures and about what he expected as far as the efficiencies of what that agreement could mean once we acquired NEX, which we thought would be somewhere today, around 20%, and we thought it would be 70% plus. We still feel very confident that that is going to be the case once this gets fully implemented and put forward. That's the DTCC question. The other question was on a couple of drivers for the business, I think is what you asked on the out years, and I'll ask Tim to make a couple of comments as it relates to his business and Derek as well. Sure. Thanks, Terry. As Terry mentioned in the opening remarks, there's certainly a continued period of uncertainty in front of us, which will provide a continued tailwind for CME as we continue to offer risk management solutions to our clients. I think drilling down a little bit, if we think about some of the various asset classes, if we look at the rates complex, where we successfully completed the transition from LIBOR to SOFR, that's not the end of the journey, but it's really the beginning of what's in front of us. If to Julie's comments, if you think about coupling that with the macroeconomic backdrop, quantitative tightening, and the resolution of the debt ceiling, we're only in the early days of seeing some of those drivers factor into the risk management needs of our clients. What I mean by that is, if we look at the recent Treasury issuance, most of the analysts are expecting $1.2 trillion to be issued through now, through June and year-end. Most of that issuance is going into T-bills at present instead of coupons. We look at the product offering at CME at present, that is not something that we currently offer with respect to the risk management or accessing the T-bills market. As that issuance moves from T-bills to coupons, that will be buttressing our Treasury complex, both within our futures and options, as well as BrokerTec. I think when you also look at the uncertainty in the rates market, you know, with the FOMC meeting today, there's over a 99% chance of another 25 basis point increase. If you look further out, they're expecting to be somewhat range-bound for the rest of the year, with, you know, possibly one more 25 basis point increase in 2023. You're seeing the FedWatch Tool at CME predict a 51% chance of a reduction before March of 2024. Sort of this consensus view that rates will go up, stay the same, or go down, is going to be a tremendous backdrop for our clients need to manage that uncertainty and have all the products to do so at CME across the various asset classes, across futures, options, swaps, and the cash market. Let me make a couple comments, too, Dan, because I think it's an important question that you asked, and it's really tough for us to predict the future. As you recall, at the beginning of 2022, I said it was going to be a very exciting year because a lot of things are setting up in favor of risk management. We think this is exactly the environment that we've been talking about for several years, that we see going out for several more to come. That's why we're really excited about some of these out years, some of the things that Tim just referenced. Risk management cannot be neglected for 1 moment for any businesses. We have multiple examples of failure, whether it's in small bank failures and others that continue to not manage risk, that are going to be, we think, potentially have to manage that risk if they're going to stay in business. There's a whole host of factors that are coming to fruition that we think are a tailwind for CME Group. I'm going to let Derek make a few comments on his asset classes. I think this is an important question, not only that you're asking, but for all the analysts and investors to listen to. Derek? Yeah, I think that we've already heard from Terry on the options and commodities growth. Just a couple of data points that I think underscore the breadth and the scale of the options growth. Not only is our non-U.S. options growing faster than our U.S. options are growing faster than the franchise overall. Also, if you look at the first half year volumes, every single asset class, or client segment, with the exception of banks, is up. This business is up 24% year-to-date. What's most important is our buy-side client volume in options is up 38% year-to-date. It speaks to the breadth and the scale and the, I think, the attractiveness of our option solutions across the entire customer range. This is not led by one asset class, not led by one client segment. It's really grown in scale across a lot of client segments. On the commodity side, you hear Terry talk a lot about the benchmark status of our products. We have built long and hard into expanding our portfolio of products. If you look at what we've done in our energy franchise, building out the crude grades contracts to both defend but also expand the success and the validity of our WTI market with that crude grades contracts, we set an all-time record of open interest in over 500,000 contracts, open interest in those products. As the world evolves, this has been a multi-year story of expansion of our benchmarks, serving our clients as the world globalizes, in some cases, the world fragments, we have products for each of those scenarios. That's what we do. We solve client need, and we fill in parts of their portfolio that they need risk management, and we become their solution provider. As we said, Dan, we can't predict volumes, but as I said in my prepared remarks earlier, when you're looking at the largest asset class, the U.S. equity markets and the equity markets around the world, in basically a zero vol environment right now, and we still traded at 6.2 million contracts a day, I think that goes to show you what can happen even when there's no vol, and people say, "Where are the future volumes at?" I think we're just kind of giving you an example where we see they're at, even in low vol situations. Great, that's helpful. Thank you very much. Thanks, Dan. Thank you. Coming up next, we have a question from the line of Kyle Voigt with KBW. Please proceed with your question. Hi, good morning. I mean, maybe a question for Terry. Since early last year, you sounded more open to executing on M&A if the right opportunity presented itself. I guess, given, you know, M&A announcements we're seeing from some of your peers, domestically and internationally, can you just provide an update on the M&A environment? Given that you've not executed or announced any deals, are you not seeing the right opportunities in terms of checking the right boxes, or has that been more price-driven? Also maybe a question for Lynne or you, Terry: Do you think, in terms of the next 10 years, as you mentioned, kind of accelerating the growth, should we think about M&A as being a larger driver of accelerating that growth over the next 10 years versus what we saw over the last 10 years? You know, Kyle, it's a great question. I think when you're looking out several years in the future, you know, there's a lot of things that can happen. One of the things that I see happening shape CME in the future is the technology growth that we have with our Google transaction that will allow us to do certain things that maybe our competitors can't, or we don't need to do M&A in order to accomplish those goals of growth going forward. I think we're in a very strong position from that standpoint. As far as M&A and what my competitors are doing, I don't like to comment on what they're doing. I'm not in the rooms thinking, talking to them about what strategic analysis they did, why they're doing those type of transactions. As I've said, we will only do things that we think are strategically benefit to our investors and to our clients. Again, right now, we are focused on the growth of this company through many different avenues. If, in fact, there was a transaction, I am still open to it, but it's not gonna be out from left field, I assure you. That's something that we've been very focused on, and I'm not saying my competitors are, they're just doing different things. We have a strong franchise. We're gonna continue to build on it. Tim made reference to early innings and risk management in some of these products. We truly believe that in the distribution of our products, the technology that in the market data that Julie's working on, what we're doing with Google, we think is really exciting going forward. We don't necessarily need to do M&A, but we're not gonna shy away from it, if, in fact, we see it's a benefit to our investors. Lynne, if you want to comment further. Yeah, I think, I think Terry covered it well. We're looking at the organic growth, and if, you know, if there were opportunities out there, it's certainly something we look at, but we've been very disciplined in our approach to M&A, as you've seen over the years. Kyle, I will make one more reference, and I think I said this on a prior call. We are in a very strong capital position, if in fact there was an M&A transaction to come our way, where some of our so-called peers, as you referenced, you know, they are getting heavily levered right now, when assets get chopped, they're gonna get chopped to people that can afford to pay for them, no matter what they are. It doesn't mean that we're going to acquire them, but we're in a strong position to look at a lot of things strategically that may or may not benefit our business, we'll make the decisions based on that. Understood. Thank you. Thank you. Thank you. Our next question comes from the line of Simon Clinch with Atlantic Equities. Please proceed with your question. Hi, hi, everyone. Thanks for taking my question. If we could just run, go back to what Lynne, what you were talking about in terms of the, I guess, the expanding product opportunities and the pipeline for market data, or maybe Julie was talking about this. Could you expand on sort of, I guess, how influenced that has been or accelerated that has been by the Google partnership, or if that has yet to come, and perhaps give us a flavor of the, I guess, the pace of this innovation over the next several years? Sunil or Julie, you want to touch on that between the market data and the Google partnership? I'll kick off, Terry, and then I'll have Julie speak to the commercial side. In terms of data platform, we have finally built it, and it's available with about 24 petabytes of data. We have developed a set of services that we are working on releasing to our clients. I will let Julie speak a little bit about the commercial opportunity in that area. Yes, I mean, why don't I just start for a minute just talking about the, you know, the data services performance, and then just quickly go into, you know, some of the product build-out that we've been working on with Google. You know, as I mentioned earlier, this quarter, we're up 8% versus where we were a year ago. That is driven from high demand from our professional user base, as well as our retail clients. And we're seeing a steady increase in the number of those professional traders that are accessing our real-time exchange content, and really seeing growth across all of those subscriber segments positive. In Q2, you know, we did not see as many of those one-time true-ups as we saw in the first quarter, we definitely, you know, still had positive growth. If you remember back to Q1, Lynne had mentioned some of those one-time payments. Those can come from everything from audits, you know, true-ups and derived data, audit fees, you know, even true-ups from real-time subscribers from approval. Just wanted to call that out as well. You know, we continue to say, you know, those are sporadic revenue items, but it's worth calling that out this quarter. You know, again, we're feeling quite positive about, you know, where the device usage is, as well as the new products that we've been able to introduce. Sunil pointed out, for us, being able to really get our data, you know, into Google Cloud, at the magnitude that we're sitting at now, has allowed us to accelerate the development of new products, for our data business, including new analytic products as well. We've been highly focused on how we're going to enhance, you know, the business, and then that is through, you know, making our data more available through APIs, increasing the flexibility in how we can package our data, how we distribute our data, how we're going to be able to price our data. All of this is just much better enabled once, you know, this is accessible through the cloud, as well as we believe, you know, making it much more easy for clients, that don't access CME data today to be able to use these new services. The computation that you can do is just far enhanced from what we are doing in an on-prem environment, and so that's allowing us to create, as well, some new compelling trade execution analytics. You know, we've been able to put that into production, this quarter, and we'll be sharing that with our clients, shortly. This is really us being able to leverage, you know, our own proprietary data, and giving our clients, you know, this benchmarking activity and allowing them to really take action on that data and providing them with insight. All of this just leads into: How are we helping our clients better manage their risk? We're also looking at some new opportunities, you know, on the clearing and the risk side, so we'll be seeing more of that roll out. It's just the speed and efficiency, which with the cloud, puts behind us, is allowing that new product production that we otherwise had not seen specifically within the data business. Hope that helps. Thanks, Julie. Simon, hopefully, that gave you some color on that. That's really thorough. Yeah, thank you very much. Thanks. Thank you. Next question comes from the line of Alex Kramm with UBS. Please proceed with your question. Yes. Hey, good morning, everyone. Thanks for the proactive comments on some of the equity franchises, your 0DTE, and it's clearly some investors are comparing your trends versus some of your competitors out there. I guess the other thing that stands out when I look at that franchise is that the micro percentage has come really down a lot. I don't want to just simplify that as saying retail is off, but just wondering if you could comment on what's going on there. Do you see those volumes going elsewhere, or is this when you talk to maybe your retail brokerage partners, is that just a drying up of retail activity post-COVID? Related to that, as you talk about the growth acceleration over the next decade or so, I mean, is retail still a component of that, or was that just an interesting story opportunity over the last couple of years, but now really it's about, you know, much, much, much bigger and other things again? Alex, thank you. Appreciate your question. I'm going to let there's a lot of people kind of chomping at the bit to take that question, but I'm going to let Tim start, and then I'm going to join in with the rest of the team. Go ahead, Tim. Great. Thanks, Alex. Thanks for the question. When we look at the Micro E-mini complex at CME, certainly we've seen some mean reversion in volume, which is not surprising, given, as Terry mentioned in his comments, the volatility coming inbound from the equity markets, as well as upward price trends in all the major indices. When those things couple together, it tends to be a less attractive trade to the more active individual client that we see that prefers the micro over some other products available, not only in CME, but in the ecosystem more broadly. It's important to note this is micro volumes coming off of a phenomenal record 2022. If we look at the Micro S&P 500, as an example, you know, the Q2 volume that we've seen this quarter, while down, is still on par with what we saw in 2020 and 2021, and actually is higher than that. The same holds true for the Micro Nasdaq. It's a tough relative comp, but it's certainly a very strong product with respect to its risk management and trading needs that it provides. The other thing that's interesting to note is the micro launched in 2019, now a few years old, is really starting to mature as a product. What I mean by that is, even though some of the volumes have come down, from a revenue perspective, it is actually flat to last year or slightly up through H1, and that's a result of 2 things. 1, the pricing actions we've taken with respect to the Micro E-minis, which continues to be at a premium versus the other risk-adjusted regular E-minis, but the other is the member mix. Even in a lower volume environment, we're seeing larger non-member proportionality of that customer mix, which has increased the RPC about $0.10 since this time last year for Micro E-mini. That is something that is important to remind people of, is the revenue performance of Micro E-minis is different than the volume performance through H1 of 2023. With respect to maturation, the other point is look at the open interest of Micro E-minis. If we look at the top 10 open interest days for the Micro E-mini complex at CME, all 10 are in June of 2023, with single day open interest records in several of the Micro E-mini contracts. This is a statement that the Micro E-mini is becoming a risk management tool alongside a trading tool, where more and more clients are holding them versus just intraday trading, which is a very positive development for the overall health of the market. The last point that I'll make on this is we can't look at Micro E-minis in isolation. They go hand-in-hand with their older sibling, the E-mini contracts, and when you look at the combined performance and the resilience of the E-minis, the futures complex at CME for equity indices remains very strong to its most analogous product choice, and that is the ETFs. What I mean by that, if we look at the S&P, we outtrade the top 3 S&P ETFs by a factor of 10.7 to 1. That for Q2 of 2023. That is up from a factor of 9.4, 1 year ago in Q2 of 2022. Same thing for the Nasdaq. This quarter, we outtraded the ETFs in our combined futures, 9.7 to 1 versus 7.3 in 2022. Similarly to the Dow, this quarter, we outtraded the ETFs 23.3 times, that of 16.2 times last year. Despite the slowing growth in Micro E-minis off of a record year, still a very strong equity futures offering here at CME. Julie? Thanks, Tim. As Tim pointed out, is certainly our equity portion of our retail business is the majority of that. With equity vol, you know, hitting 2-year lows, we would expect there to be some softness in the volume. However, our overall retail business remains extremely strong. You know, we had a record-setting year last year, we're looking at just revenue being down slightly this year, which is very, very strong performance. We saw positive growth in both Europe, greater LatAm, and also China in the second quarter. One of the real barometers, you know, that we often mention on this call, and for us, is a key sign of the health of this, marketplace for retail participation, is the total number of retail traders, which was up 7% in Q2 over Q2 of 2022. Also just the number of new traders. Our firm's ability and CME's ability to continue to attract new people to CME markets, that was also up 4% in Q2 of 2023. You know, I think from our signs, you know, we certainly see that the equity vol had some impact on things, but the fact that we have a diverse asset class, you know, we saw increased activity in some of the other asset classes by our retail participants, and feel we're still very well positioned for future growth quarters. Yeah, just to add a couple of data points to what Julie said, specifically, when you look at retail in our metals complex, for example, retail volumes year-to-date are up 21%. As you know, metals is our highest rate per contract business at $1.50. Also, options growth has benefited from retail participation of 8% this year. The benefit of being able to walk into a customer, any customer or distribution partner, and offer every major benchmark liquidity product to them, means that when sector rotation happens, we're going to be the beneficiary of that. We see strength in certain asset classes when they sector rotate, whether because you've got normalization of volatility or cost of capital, we're going to benefit from that. We see that's the, that's the benefit of the story and the growth behind the franchise. Alex, you have very few comments, and I think hopefully you find them all salient. One of the things that we talk about retail, and we always have, it's an ebb and flow situation for a lot of people. Our retail is described a little bit different as more professional-type participants, as Julie Winkler was pointing out. You know, when you talk about COVID and you talk about other factors, yes, that was in there, but our retail is classified as different than the average person trading on maybe a Robinhood platform or something of that nature. What Tim had to say about, you know, how the competitors are performing against CME, you can clearly see that our volume share is not only not decreasing, but increasing against the look-alike or competitive-type products. Hopefully those questions, are been answered properly for you. Yes, lots of great color. Thank you very much. Thanks, Alex. Thank you. Our next question comes from the line of Brian Bedell with Deutsche Bank. Please go ahead, sir. Great, thanks. Good morning, folks. Thanks for taking my question. Maybe if I can just go back to the options story. Obviously, that's been improving nicely. The numbers I'm looking at, I think options as a percentage of total ADV was in the mid to high teens over the last couple of years, now you've sort of vectored above 20%. Just wanted to sort of try to understand your confidence of that type of trend improving over the next year. Then maybe just talk about the RPC dynamics of the options business versus the futures, in terms of whether you think that's potentially accretive to RPC. Then you also mentioned on page 3 of the quarterly earnings commentary about the direct front-end platform, helping stimulate trading of electronic options. Is that just in the energy complex, or is that across the business? Thanks, Brian. Derek and Tim, you want to start? Yeah, in reverse order, I'll actually start with your last question, Brian. Yeah, you've heard us talk on previous calls about CME Direct. That is our proprietary front end that we provide to our customers that gives them all the functionality, all the analytics, all the capabilities, and all the connectivity, including API access to our markets for both futures and options. That really started as a mechanism to make sure that we were able to provide the full breadth of capabilities and services to our global customer base seamlessly connecting to everything that we have to offer that's now extended itself. This is across asset class, not just limited to energy, and the growth that we've seen there has been substantial. It's actually rapidly evolved to become the single largest ISV provider or link into our options business with the highest rates of penetration on the interest rate side. It's an integral part to our growth story. In the options analytics space, we've developed a whole suite of capabilities, whether it's pre-trade analytics or post-trade tools, to help customers look at vet positions and strategies they want to implement. That's new capability developed over the last four to five years, and it's just as we continue to expand the tools and capabilities, it just brings more customers that are willing and able to trade options and creates a seamless experience, one single front end into all of our asset classes with a full suite of functionality and analytical tools. We think we're still in the early innings of developing those capabilities in partnership with QuikStrike, and we're very happy with the growth that we're seeing there. That's actually becoming a critical part of our futures delivery, as well as all of our blocks are reported through there. The last piece I'd note on the front end there is that we're seeing the largest uptake in growth there is from some of our buy side participants and brokers as well. This is a platform that brings customers to our market, provides full suite of services, and introduces them to everything we have to offer. The last piece is when you reference the overall% of options as a% of total volume, there's 2 parts to that. Not only are we seeing options continue to outpace futures, which is positive for the franchise, in that more options business brings more embedded futures hedging associated with it. As I mentioned at the top of the call, with our options business year to date, up about 24%, our non-U.S. options business is growing even faster, up 33% for the first full half year. When we think about growth levers and opportunities, the way our sales force is out there, specifically educating clients on options use, how to access those tools at CME Group, and the growth that we're seeing, we think we've got a good deal of penetration yet ahead of us when you look at the footprint that we have in options in Europe and Asia versus the U.S. A lot to like in the story. Let me just accentuate a couple points here, Brian, because I think it's really important. We're the largest futures exchange in the world. Our futures franchise is massive. One of the reasons it is what it is because of the growth of options. The real growth is in the futures for the out years. If our options business continues to be here or better, it only bolsters our futures and hedging business going forward. That's, to me, a real story for the futures franchise of CME Group. It's not just an option story like some people are talking about at their different firms that they represent. We are a futures exchange with options, and the options grow the futures as well, and that point cannot be missed. I don't want you to think we're only growing options and futures are not. That's a very important point that we have to go forward. That's super helpful. Just the RPC dynamics, I guess, of the options versus the futures? Say that again. The RPC dynamic of options versus futures in general. Yep. The total RPC this quarter across our options complex was $0.666, so slightly down from what we saw overall. It does depend on asset class, how that will compare, and what is trading in terms of those options. That's great color. Thank you so much. Thanks, Brian. Thank you. Up next, we have a question from Craig Siegenthaler with Bank of America. Please go ahead, sir. Hey, good morning everyone, is on pricing. Given your success with the larger than usual price hikes earlier this year, could we start to see larger price hikes again next year in 1Q 2024 and then again in 1Q 2025? Hey, Craig, it's Terry Duffy. Let me make a comment on that. You know, price hikes are part of the business, but it's not the strategy on how we grow the business. You know, we look... Everybody's got costs that they are incurring, and we're no different. That's not our strategy to grow the revenue of the company. Our strategy is to grow the business, not grow what we charge. Again, we will continue to look at that on a month-by-month basis and make decisions as we see fit, but we're not prepared to say right now what our pricing will or will not be in the next couple of years, on the out years. Lynne? Just to add to that, Craig, as you know, we do a very bottoms-up build on that pricing strategy. This is not an approach where we have a target that we are looking to hit. It's really market by market, product by product, customer type, and we will determine what we think is the right adjustment, if any, for that market. It's something that we evaluate in that time period, and we don't look at a multi-year pricing strategy. It really depends on the market environment, the health of the market. What we ultimately are trying never to do is impact volumes, because we want to see that velocity of trade moving through our systems, given the high level of incremental margins that we earn on that trading. Thank you. Thanks, Brian. Thank you. Our next question comes from the line of Owen Lau with Oppenheimer. Please proceed with your question. Hey, good morning. Thank you for taking my questions. I have a quick two-part question. The first one is a follow-up to the market data question. It was up year-over-year, but down sequentially. How much was the one-time payment in the first quarter? The second one is about digital assets. I think CME will launch Ether/Bitcoin Ratio futures soon. Could you please give us an update on the digital assets trading and institutional participation in CME? How could your summary judgment from Analisa Torres on the Ripple case potentially impact CME? Thanks. Thanks, Owen. I'm going to ask Lynne to give you the first one on the market data question, then Tim will touch on the digital assets. Owen, in the first quarter, we saw about $4 million in one-time audit fee and catch-up payments that we didn't see in Q2. This quarter, we saw about half a million in audit fees, that really explains that differential, Q1 to Q2. Great. Thanks, Owen. When we look at the cryptocurrency complex at CME, you're correct. We recently announced, which I think is an innovative and interesting product, and that is the Bitcoin-Ether ratio spread contract that will go live the weekend of July 29th. That's interesting, where effectively, it's the price of Ether divided by the price of Bitcoin in one contract, that will trade alongside the other cryptocurrency products, including offsets, for clearing at CME. When we look at the crypto complex at CME, it remains strong, and our value proposition remains salient with our institutional client base. We've seen continued adoption of our products in terms of both traders in the OTC space, as well as futures traders, as well as the growing importance of our contracts as the underlying of some of the most popular ETFs out there in this space, which are continuing to grow both trading volume and open interest. When we look at the volume that we're doing in the larger size Bitcoin and Ether contracts, that is up about 6% versus this period H1 through 2022, and on pace for another strong year in crypto, here at CME. When we look at our product development, we do stay currently in the Bitcoin and Ether lane for tradable products. We do have a multitude of reference rates. With regards to your questions about the Ripple case, it's really not in our position to comment on that case. Our mantra and the philosophy that we use is we will continue to only deploy products as a regulated venue offering regulated products, and we'll wait for further regulatory clarity from the SEC and the CFTC before we introduce additional products. Thanks, Tim. Thank you, Owen. Thanks. Thank you. Our next question comes from the line of Kenneth Worthington with JP Morgan. Please go ahead. Hi, good morning, and thank you for taking the question. The SEC has a number of proposals for centralized clearing in the rates markets for Treasuries and repo. A couple of questions here. I guess first, Terry, which of the major parts of the clearing proposals are most likely to make their way into the final rules? Maybe second, how do you think these rules could impact rate, liquidity and volatility and ultimately flow through CME rate activity? Lastly, to what extent is participating directly in a clearing platform for Treasuries and repo, important or even a priority for CME? Ken, there's a lot to unpack there and a lot that I don't have the answers for, because these proposals that you're referring to at the SEC on the Treasury market, I know I think there's a lot to be done yet before they're finalized to a point where we see how they're going to be implemented. As far as the trading on the repo, Tim, if you want to comment on that. On the SEC proposals, Ken, you know, I don't see anything in there that's a negative for CME, for starters. I want to make sure I say that, if in fact, it was to go through as proposed, and I see it only as a net positive for CME. What that is, I don't want to make predictions on what it could or could not be. It reminds me a lot of. I don't want to put the same analysis on it, but during 2010 Dodd-Frank, when they said that swaps clearing was going to be worth $1 billion to everybody that had a clearinghouse, was a bit of a misdirect because that was made up by some government officials, not us. I want to be careful on that, Ken, about how we make any predictions where it's going, but I will say there, I don't see any negatives in any of the proposals for CME as I've gone through them. Tim, you want to make a comment on? Sure. I think the one thing I would add is, while we continue to evaluate the proposals and the various suggestions and regulatory reforms that may be being discussed, we're certainly looking to participate in those conversations with our clients and with the regulators to see what makes sense from a risk management and a clearing perspective for our customers. As Terry said, very hard to predict what the final rules may look like. I think broadly speaking, when we look at the totality and the gravity of the interest rate complex at CME, across futures and options, cash market of BrokerTec and OTC clearing, we certainly are already in a position of strength with the ability to unlock capital efficiencies for our clients. We're averaging about $7.5 billion of savings across the portfolio of margining in the rates complex today. Anything that would increase the velocity or the benefits of central clearing, it certainly will be something that we're looking to engage. It's important to note, not only with our portfolio margining, as Terry said earlier, with FICC cross-margining on the horizon, with the expanded suite of products available to the clients across SOFR, the Ultra Ten notes, the Ultra Ten bonds, is that we're already providing a lot of capital savings to clients, where these may be additive, but we'll have to wait and see how the final rules shake out. Thanks, Tim. Thanks, Ken. Great. Thank you. Thank you. Up next, we have a question from the line of Michael Cyprys with Morgan Stanley. Please proceed with your question. Hey, good morning. Thanks for taking the question. I wanted to ask about capital management. If we look back over the past decade, you guys have returned a tremendous amount of capital through the dividend and primarily the special dividend. A lot of that was during a zero rate backdrop, but with meaningfully higher rates today, over 5%. Just curious how the rate backdrop is impacting your calculus and thought process around capital management, and to what extent might you think about evolving, shifting the policy and considering buybacks? Thank you. Thanks, Mike. I'll let Lynne comment, then I will as well. As you know, Michael, we've had that policy in place with our fixed variable dividend since 2012. We've returned over $21.5 billion to shareholders in the form of dividends during that time. We do think a lot of our shareholders appreciate the transparency of that approach and the ability to track progress towards it as we move through the year. We do like both the flexibility and that transparency. That being said, we always do look at alternatives to make sure that the way we are returning capital is the most attractive form for our investor base. To date, we have found that dividend policy has been preferred. Michael, just so you know, I mean, as far as share repurchases, we've talked about that. We continue to talk about it, and as Lynne's referenced, we will do what we believe is in the best interest of the shareholders at that time. We're not taking anything off the table. Right now, our dividend policy has proven out to be the right one for now. Great. Thank you. Thank you. Thank you. Our next question comes from the line of Patrick Moley with Piper Sandler. Please go ahead, sir. Yeah, good morning. Thanks for taking my question. I wanted to go back to the expanded cross-margining opportunities with the DTCC. Terry, I know this is something that's been in the works for a little while now, so just wondering what maybe caused this to come to fruition now and then, assuming you do receive regulatory approval and launch in the first quarter, how quickly would you expect that to maybe ramp in terms of client utilization? Thanks. Yeah. Thanks, Patrick. Congratulations on your new role there at the firm. I will say a couple things. The agreement with DTCC has been in the works for a long time, You're exactly right. A little frustrating on that part. Why now? I think that when you look at where. Listen, we're only one part of the equation. We needed DTCC to be prepared to do this as well. They had some other projects in the works they had to finish up, and everything takes a little bit longer than you anticipate. We couldn't control their side of what they needed to do for this agreement. We have now come to a finalization on this with them, and we're like I said earlier, we're looking to have this, as soon as it's approved, hopefully, you know, being implemented by Q1 of next year. Again, extremely excited about what this could do for the marketplace because of what Tim and others have said, what we see on the out years as far as risk management goes and how necessary it's going to be for all products. If you're going to have that, capital efficiencies amongst products is key in order to grow these businesses and make it more efficient for each and every client. We do believe that this cross-margining agreement will be extremely beneficial to the clients and make their capital more efficient, which in return, should benefit CME immensely. Tim, I'll let you comment more on the agreements, under what Patrick has raised. Thanks, Terry. Again, when we look at this announcement, we're excited, one, that we're finally able to bring this to market early next year. It's also in sort of when we look at the benefit to clients, when we look at the immediate benefits or the near-term benefits, and certainly the expansions of the products that are now available for the cross-margining agreement. Again, like I was saying earlier, that includes our SOFR futures, the Ultra 10-Year U.S. Treasury Note futures, the Ultra U.S. Treasury Bond futures, the FICC cleared Treasury notes and bonds, and repo transactions that have a time to maturity of greater than 1 year will also be eligible. This is exciting in terms of trying to unlock those benefits. As we've said previously on the earnings calls and certainly before, we think at present, clients are taking advantage of them, but typically more to the order of 20% or 30%. We do expect to get those offset percentages closer to 70% or slightly higher. This is the first step, right? The important part of entering into these agreements is that we will continue to work with the clients to try and avail even more capital efficiencies after this initial rollout. This is something that we're engaging with clients about, we look to further expand the program to allow clients to avail these efficiencies in addition to the common clearing member proprietary accounts. Lots of things on the horizon that we continue to explore years down the road, beyond just the initial rollout of early next year. Thanks, Tim. Thanks, Patrick. Very helpful. Yep, thank you. Thank you. We now have a question from the line of Chris Allen with Citi. Please go ahead, sir. Morning, everyone. I was wondering if we could get an update on the collateral balances, both cash and non-cash, during the quarter, related revenues to generate during the quarter and where they currently stand for July. Thanks, Chris. Lynne? Sure. If we look at the quarter, the average balance for cash was $120.1 billion. That was up from $109.6 billion last quarter. For the non-cash balances, we saw $109.4 billion on average, up from $99.2 billion in the first quarter. We earned $107 million on the cash balances this quarter and just under $20 million on the non-cash balances this quarter. Again, that non-cash amount rolls through the other revenue line. If you look at year to date, month to date, so far in July, the balances in cash have come down. We're seeing about $100.9 billion in cash on average so far in July. The non-cash balances so far this month are running at $127.9 billion. Great. Thanks. Thanks, Chris. Thank you. We now have a question from the line of Andrew Bond with Rosenblatt Securities. Please go ahead. Hey, thanks. Good morning. Energy open interest is beginning to trend upward from a longer-term decline. Can you talk a little bit about the overall health of the energy business, the drivers here, structurally, and if the geopolitical environment is still impacting current trends in natural gas and oil? Thanks. Thanks, Andrew. Good question. Derek? Yeah, it's, I think we've seen a really nice return to, I would say, normalized levels of volatility and therefore normalized levels of margin required to trade this. We saw some of that business shift out, particularly financial players step out of the energy business last year, and we're seeing that business return significantly. You pointed to the trend, not just in the open interest, but volumes as well. When you look at the primary drivers, there are some cyclical, some structural. The cyclicals, we're certainly put ourselves in a position to be the biggest beneficiaries of those. When you look at particularly the strength of a globalizing natural gas franchise that is really globally centered around Henry Hub. You know, natural gas continues to be exported at record amounts out of the U.S. through the LNG facilities. That's at max capacity right now. There are more facilities coming on board over the next five years. From a term perspective, CME Group's Henry Hub franchise is the central pricing point for global natural gas. When you look at growth across the client segments there, we're seeing significant growth, and actually, new client acquisition is happening the fastest in natural gas with our European customer base. That shouldn't surprise, given some of the challenges that the Ukraine war has posed in terms of disruption to fuel supplies in both crude and natural gas. When we look at that global growth, that's particularly strong in natural gas out of Europe, and we're seeing significant growth in options there as well. It's a similar structural story that's taking place in crude oil. As you know, in June, Platts implemented a Midland WTI marker into the Brent basket, and that has actually just further reinforced WTI as the primary global benchmark, setting the price of oil in terms of the outsized footprint WTI has in the pricing of oil. You know, seeing this shift, and as I talked about on last call, that over time, WTI would be that global physical benchmark of reference. That position has only strengthened, and we have taken significant work to build out, as I mentioned before, the Gulf Coast crude grades contracts that connect specifically our physically delivered WTI contract out to the export market as the U.S. is now exporting over 4 million barrels a day, a record clip as well. Those contracts themselves have over 500,000 open interest. That complements the growth, just under 2 million contracts open interest in WTI. The structural shifts for both Henry Hub, a market that we own 82% market share of, and WTI, a market we own 90% market share of, will continue to be central to not just the energy transition, but growth in the franchise overall across client segments. You know, Andrew, let me just say one more thing, because you referenced it, and I talk about this a lot, too, is geopolitical. I think geopolitical is got a factor in every single trade and every single asset class going forward. I mean, the tensions around the world are just amazing when you look at not only with the what's going on between Ukraine and Russia and the rest of the world being involved in it, the potential of what's going on between China and Taiwan. I mean, the tensions are so high all over the world that geopolitical has a factor in every one of these markets, and risk management is critical to it. I think you're spot on for raising the geopolitical risk, but it's not only associated with energy, it's across the board. Thanks, Derek and Derek. Thanks, Andrew. Thank you. Our final question comes from the line of Brian Bedell with Deutsche Bank. Please proceed with your question. Oh, great. My questions have been answered. Just one clarification: the rate paid, or I'm sorry, the rate earned on the cash collateral balances in the second quarter and the rate that you're paying out to the clients? The rate on the Fed accounts remains at the 25 basis points. It's been at that level for the last 8 rate hikes. We earned in the second quarter about 34 basis points, up just slightly from what we had seen in Q1. Okay, great. Thank you. Thanks, Brian. Thank you. I'll now turn the call back to the management for their closing remarks. Please go ahead. Let me thank all of you for participating in the call today. We appreciate your questions and the opportunity to answer them. Have a nice day, and we look forward to speaking to you soon. Thank you. Thank you. That does conclude the conference call for today. We thank you all for your participation and ask that you please disconnect your line. Thank you once again. Have a great day.