So that’s why you’re seeing an elevated level. We stand behind the stock. We have the free cash flow there to back it. We’re also mindful of organic growth initiatives. We want to keep a bit of dry powder to invest in the business to drive that long-term growth. So it’s really a balance between those areas.
Operator: We have a follow-up question from Owen Lau of Oppenheimer.
Owen Lau: On the digital side, could you please remind us on why you think Cboe can be competitive on big — futures trading without the spot offering? And then what does the — this realignment mean to Cboe’s broader strategy on how to tackle the digital asset ecosystem longer term?
David Howson: I’m sorry, could you repeat the second half of that question, please? We’ve got the competitive element for the first half. The second half, we — the line broke a little.
Owen Lau: Sorry, about wet. So I was just asking, how does this realignment, the digital assets realignment mean to Cboe’s broader strategy on how to tackle the whole digital asset ecosystem longer term?
David Howson: Great. Thanks for the clarification there. So when we looked at the overall landscape here is we took into account our own assets, capabilities and strengths here at Cboe. And we looked at where we saw the greatest opportunity set which was in the correct term derivative space. And so once again, we look to lean on our scaled infrastructure and the existing global resources. What we think makes this move attractive for us is that we get to bring those crypto digital futures onto a single venue, a single venue with an existing broad distribution and customer base. It gets brought onto a single technology stack which runs all of our global equities, futures and options market, a familiar set of functionality which leapfrogs the functionality we have today on Cboe Digital Exchange to add a range of versatile functionality that futures customers want.
We also get a clearinghouse that clears these products and potential other new product innovations in the crypto derivatives space which then allows us to define our own destiny. It allows us to have autonomy around that product duration and that timeline to market. And then as a global derivatives team, have scale and expertise around the world for derivatives but also that scale and expertise around the world for clearing to broad to bear in unison onto the digital asset space. So we think derivatives is where it’s at for us. We think we’re good at that. We’ve got the technology and the people to be able to give us an edge and create an alternative liquidity pool for people to express and manage exposure to crypto assets at Cboe.
Fred Tomczyk: And maybe I’ll just add a few comments here, why we moved on with digital strategy at this time. So first off, it wasn’t lost on us that we were losing money on this. So it creates a greater sense of urgency to come to a strategic conclusion. We also realize that we do not have regulatory clarity in the spot and cash spot market. And we do not see when we’re going to have regulatory clarity. And so when we went into all this, we wanted to build a trusted, liquid, efficient market. Everybody wants that. But if you don’t have regulatory clarity, it’s very hard to do that because you can’t bring all of various participants into the market. So as Dave said, we’ve gone to where our strengths are and we have gone to where we have regulatory clarity. And basically, we see that as the best opportunity for us going forward.
Operator: A final follow-up question comes from Michael Cyprys of Morgan Stanley.
Michael Cyprys: Just wanted to ask about credit index products. Understand you have a few that you’re launching. Hope you could update us on that. And more broadly, if you could speak to the opportunity set within credit index products and new partnership opportunities that can make sense over time. Just how are you thinking about that, particularly as credit markets continue to electronify with new investor types entering the marketplace? What’s your vision for Cboe in credit?
David Howson: So for us today, we have 2 iBoxx futures contracts and we have options on those futures contracts as well available to customers. For us, having a futures product is particularly useful for those fixed income funds who can’t trade securities and sort of the ETFs are locked off to them. So having the ability to manage and hedge exposure is particularly useful there but also for international customers to get those — that access to an aligned future which align deeply — which tracks very closely to the 2 key benchmarks here, the LQD and HYG, ETFs. So the underlying — to allow access and exposure there to manage those exposures is particularly used for the international aspect also comes into play as a future to be able to access that from international participants as well.
So for us, it’s the, first, into credit as we go through that alignment to the core underlying exposure is the key differentiator to Cboe’s credit offering because it does align the HYG and LQD products very, very closely and a touch of exposure there.
Operator: There are no further questions at this time. I will now turn the call back over to the Cboe Global Markets team for closing remarks.
Fred Tomczyk: Okay. Thanks, everyone. Thanks for your questions today and thanks for calling in. We’re off to a great start to 2024. And we look to continue the momentum for the rest of the year.
Operator: Thank you. This concludes today’s conference call. We thank you for participating and you may now disconnect.