The Chicago Mercantile Exchange on Tuesday underscored the increasing importance of futures trading to banks, hedge funds and proprietary traders by reporting a 44 per cent rise in quarterly earnings on record trading volumes.

The largest US futures exchange said diluted earnings per share were 42 per cent higher, at $2.36, compared with $1.66 a year earlier on “significantly increased trading volume in each of CME’s major products lines”.

Net income rose 44 per cent to $82m. Net revenues rose 28 per cent to $239m.

The CME is benefiting from a global surge in the use of futures contracts from investors looking for exposure to assets without having to buy such assets outright.

Unlike equities, futures can be bought and traded without having to buy the asset on which they are based. This is attractive to hedge funds interested in speculating on assets such as stock indices, interest rates and government bonds.

In addition, futures exchanges are benefiting as electronic trading lowers trading fees, lowering barriers to entry to new types of users.

This is helping the CME turn in rising profits because it has a low fixed cost base, consisting of its Globex electronic trading system and its own clearing house. The CME’s operating margin rose to 57 per cent in the quarter, up from 51 per cent in the same period last year.

The exchange is understood to have put forward a bid for cross-town rival the Chicago Board of Trade, which is considering whether to pursue an initial public offering.

Any combination of the two exchanges would create the world’s largest futures exchange, posing the most serious challenge to Europe’s exchanges since they emerged as global players in the 1990s.

The CME said average daily trading volume grew by 33 per cent to a record 4.4m contracts a day in the second quarter.

Terry Duffy, CME chairman, said: “Due to the inherent leverage of our financial model and scalability of our infrastructure, we generated record quarterly net income and significant free cashflow.”

Greater electronic trading of the CME’s flagship eurodollar interest rate futures contracts contributed to an 80 per cent rise in Globex volume in the quarter to 3.1m contracts a day.

While the CME derives most of its trading volume from the US, it has been seeking new customers from Europe and Asia in the past two years, using lowered trading fees as incentives to draw in traders.

The CME said volume traded under such incentives programmes rose by 55 per cent from the first quarter. Craig Donohue, chief executive, said: “We anticipate further electronic growth as we continue to improve the functionality of Globex and the flexibility of our product offerings.”