Most investors experience volatility as stress.
Exchanges experience it as revenue. When markets get busy, volume rises, market data gets more valuable, and trading infrastructure quietly prints money.
Brokers can also benefit when cash yields stay meaningful, and customers trade more. This theme is not about predicting a bull market.
It is about owning the toll roads in the middle of it.
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Theme: Market Infrastructure, The Picks-and-Shovels of Trading Activity
Exchanges and brokerages monetize activity. When volumes rise, they earn more. When markets get choppy, volumes often rise. When volumes rise, the house gets paid.
Here is the chain reaction:
Volatility increases → trading volume rises
Volume rises → exchanges earn more from transaction fees
Activity rises → market data and analytics become more valuable
More data revenue → stability improves through recurring streams
Higher rates and cash balances → brokers earn more on interest income
This theme matters because it mixes cyclical and structural revenue. Transaction fees are cyclical. Market data, index licensing, and technology services are more recurring.
Many exchanges have been building higher-quality revenue streams for years. That makes them less dependent on perfect volume conditions.
It also matters because rate levels still influence broker economics. When clients hold cash and yields are meaningful, brokers can earn more.
When rates fall, that tailwind softens. So the theme includes a macro lever, but it is not purely a rate call.
What we want to see to stay bullish
Healthy trading volumes and strong options and futures activity
Continued growth in market data and recurring revenue lines
Stable customer cash balances at brokers
Margin discipline and operating leverage as revenue scales
A steady regulatory environment that does not disrupt market structure
What can ruin the party
If markets become calm and volumes fall, transaction revenue softens. If rates drop fast, broker interest income can decline.
Regulatory changes can also impact pricing and market structure. For retail brokers, customer activity can swing with sentiment quickly.
This theme works best when activity remains elevated and recurring revenue keeps growing.
CME Group (CME)
What it does: Futures and derivatives exchange, earning revenue from trading activity, clearing, and market data across rates, equity indexes, commodities, and more.
Why it fits: CME tends to benefit when macro uncertainty increases, because hedging activity rises. It also has strong market data and clearing economics that support recurring revenue.
What could go right:
Higher hedging demand supports volume growth
Strong clearing economics support stable cash flow
Market data revenue remains resilient
Operating leverage supports margin expansion
What to watch next: Average daily volume trends, especially in rates and equity index products, and market data growth.
Risk: If macro calms down, volume can fall. Regulatory shifts in derivatives markets can also influence activity.
Intercontinental Exchange (ICE)
What it does: Exchange operator with derivatives and data businesses, including ownership of major market infrastructure and data platforms.
Why it fits: ICE has built a diversified model with meaningful data and analytics revenue.
If trading activity rises and recurring revenue remains strong, it can compound with less cyclicality than pure transaction businesses.
What could go right:
Strong trading activity supports transaction revenue
Data and analytics growth increases revenue quality
Operating leverage improves margins
Steady cash generation supports capital returns
What to watch next: Growth in data services and recurring revenue mix, plus trading volume trends in key products.
Risk: Transaction revenue is still cyclical. If volume drops, the market may focus on the short-term slowdown.
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Nasdaq (NDAQ)
What it does: Exchange and technology provider, earning from trading, market data, listings, and financial technology solutions.
Why it fits: Nasdaq combines market activity exposure with a more software-like technology business.
That diversification can help if trading ebbs while tech services continue growing.
What could go right:
Market data and tech services support recurring revenue growth
Listing and corporate services remain stable
Trading activity provides upside torque in volatile markets
Margin improvement through scale and cost discipline
What to watch next: Recurring revenue growth in technology and data, plus net new listings and trading trends.
Risk: Listing activity can be sensitive to IPO cycles. If markets cool, new listing momentum can slow.
Charles Schwab (SCHW)
What it does: Brokerage and wealth platform, earning from trading, asset-based fees, and interest income on client cash balances.
Why it fits: Schwab benefits when markets are active and when client cash yields support interest income. It is also a scale platform with sticky client relationships.
What could go right:
Stable client cash balances support net interest income
Market activity supports trading and engagement
Asset growth improves fee revenue over time
Cost discipline supports operating leverage
What to watch next: Net interest margin trends, client asset growth, and activity levels. Also watch commentary on cash sorting behavior.
Risk: If rates fall quickly, interest income tailwind softens. Market downturns can reduce client assets and sentiment.
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Robinhood (HOOD)
What it does: Retail brokerage with revenue from trading activity, interest on cash, and related financial services products.
Why it fits: Robinhood offers more upside torque when retail trading activity rises.
In higher volatility environments, engagement can increase, and interest income can benefit when cash yields are meaningful.
What could go right:
Higher engagement and trading activity support revenue growth
Growth in cash and subscription products improves revenue mix
Better operating discipline improves profitability
New product expansion increases customer lifetime value
What to watch next: Funded account growth, net deposits, trading volumes, and revenue diversification. You want to see it becoming more than a meme-cycle proxy.
Risk: Retail activity is fickle. If markets calm down or sentiment drops, volumes can fall quickly. Regulatory scrutiny can also be a recurring headline.
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This theme is about owning the toll roads of financial activity. When markets get busy, exchanges collect. When clients hold cash, brokers collect.
Watch trading volume trends, the growth of recurring market data revenue, and the direction of cash yields.
If volatility stays present and recurring revenue keeps expanding, these five names can keep benefitting in 2026 while everyone else argues about whether the market is rational or just caffeinated.
Best Regards,
— Adam Garcia
Elite Trade Club
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