Volatility in financial markets (i.e., sharp price swings in asset prices) makes most investors nervous. Uncertainty, the inability to predict what will happen tomorrow or where prices will go, causes anxiety. During such times, trading activity increases, demand for hedging rises, and the need for market data and analytics grows — which leads to higher revenues for companies that provide market infrastructure or support investment flows. These companies don't earn from market direction (whether up or down), but from trading volume and the activity that volatility generates. Let’s look at some of the companies you can invest in that benefit from these dynamics.

Hedging is a way to reduce financial risks associated with price changes, currency fluctuations, interest rates, or other market factors. Simply put, hedging is like insurance: you take action in advance to minimize potential losses. For example, if a company buys raw materials in US dollars but earns revenue in drams, it can hedge its currency risk — by locking in the exchange rate through a contract. The company spends money on this hedge, but if the dollar strengthens, it will still be able to buy raw materials at the earlier, more favorable rate. In the end, the company is protected from major currency fluctuations. Hedging is widely used by investors, traders, exporters, and large corporations to protect against unpredictable market movements.

Stock and derivative exchanges earn income from transaction fees, clearing services, and selling market data. When volatility increases, the number of trades rises — along with the exchanges’ commission revenue.

Clearing in the capital market is the process of settling transactions between buyers and sellers after trades are made. It ensures the accurate calculation of who owes what to whom and prepares for the transfer of securities and money. This is usually handled by a special organization — a clearing house — which reduces risks and ensures reliable settlement. Clearing makes trading fast, safe, and orderly. Nasdaq (NDAQ) is a global technology company operating at the intersection of capital markets, digital solutions, and regulatory technology. It does more than run a stock exchange — Nasdaq also provides software and analytics to financial institutions, regulators, and corporations. It has three main business lines: Capital Access Platforms, Financial Technology, and Market Services (trading, clearing, and infrastructure). Nasdaq relies less on volatile trading revenues than other exchanges and generates a higher share of recurring or subscription-based income. The company has strong results in its index and fintech segments and could benefit from rising demand for anti-financial crime solutions and growing institutional interest in crypto. Intercontinental Exchange (ICE) is a global financial markets operator that runs 13 exchanges and 6 clearing houses worldwide. One of its subsidiaries is the New York Stock Exchange (NYSE). ICE covers trading in derivatives, stocks, ETFs, bond valuations, indexes, analytics, and execution services. It is also expanding in US mortgage technology, offering digital tools across the entire mortgage lifecycle — from application to the secondary market. Key growth drivers for ICE include the globalization of natural gas and oil trading (especially Brent), the transition to clean energy, fiscal reforms in Europe, and IPO growth prospects at NYSE driven by lower rates and a rebound in private equity exits. With rate cuts expected in 2025 in the USA, ICE’s mortgage business could also get a boost. London Stock Exchange Group (LSEG) operates across the full value chain of financial instruments — from equity and bond issuance to post-trade processing, market data, and analytics. After acquiring Refinitiv, LSEG became one of the world’s largest providers of financial data and analytics. Another key asset is FTSE Russell, which develops indices and benchmarks used globally. LSEG also manages various trading venues: the London Stock Exchange, AIM, Turquoise, CurveGlobal, FXall, and Tradeweb, giving companies and investors access to capital markets. Although based in the UK, LSEG has a strong international presence. Its diversified revenue streams benefit from long-term structural trends like rising data usage, growing demand for post-trade services, and the shift to electronic bond trading.

Post-trade services include all the processes that occur after a trade is made. This includes clearing, the exchange of cash and securities, asset custody, and regulatory reporting. These operations ensure the deal is finalized and reduce risks, making markets more reliable and transparent.

CME Group (CME) and Cboe Global Markets (CBOE) may also become attractive investment targets in case of stock price corrections.

Brokerage firms and trading platforms for retail investors can also benefit during times of market volatility, as they may earn more from spreads, order flows, and interest income.

Retail investors are individuals who invest their own money, usually in smaller amounts, often through brokers or trading apps. Institutional investors are large organizations like banks, pension funds, or hedge funds that manage large amounts of capital and typically make bigger trades. Charles Schwab Corporation (SCHW) operates in wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. Its main growth drivers are rising net interest margin, improving operational profitability, increasing net new client assets, and resuming share buybacks. Deposit growth and reduced borrowings support its financial strength. Schwab is expanding both its retail and institutional businesses, including launching crypto products starting with Bitcoin and Ethereum. In 2025, the company is expected to continue boosting organic growth and margins, especially as interest rates stabilize and the client base expands.

Interactive Brokers (IBKR) and Robinhood (HOOD) are also actively growing their platforms for retail investors. If their stock prices correct, these companies could become attractive investment opportunities as well.