Interactive Brokers Group Reports Brokerage Metrics and Other Financial Information for May 2024, includes Reg.-NMS Execution Statistics

Rhea-AI Summary

Interactive Brokers Group (Nasdaq: IBKR) reported its brokerage metrics for May 2024. The company recorded 2.36 million Daily Average Revenue Trades (DARTs), a 27% increase YoY and 1% MoM. Client equity totaled $486.3 billion, up 41% YoY and 6% MoM. Client margin loan balances were $53.1 billion, a 33% increase YoY and 5% MoM. Client credit balances reached $106.7 billion, 8% higher YoY and 1% MoM. The firm had 2.86 million client accounts, 27% higher YoY and 2% MoM. The average commission per cleared order was $3.01, with key products including stocks, equity options, and futures. Additionally, the total trade expense for IBKR PRO clients was 3.3 basis points, measured against the daily VWAP benchmark.

Positive

• 2.36 million DARTs in May 2024, a 27% YoY increase and 1% MoM.
• Client equity totaled $486.3 billion, up 41% YoY and 6% MoM.
• Client margin loan balances reached $53.1 billion, a 33% increase YoY and 5% MoM.
• Client credit balances were $106.7 billion, 8% higher YoY and 1% MoM.
• Number of client accounts grew 27% YoY and 2% MoM to 2.86 million.
• Average commission per cleared order was $3.01.

Negative

• High trade expenses for clients, with total trade expense being 3.3 basis points.
• A notable increase in expenses associated with trade execution and clearing.

Insights

Financial Analyst

Interactive Brokers has reported a remarkable performance in May 2024, revealing some key financial metrics that can significantly impact investor sentiment. Here are some highlights:

First, Daily Average Revenue Trades (DARTs) were 2.360 million, up 27% from the previous year and 1% from the prior month. This indicates a healthy increase in client activity, which generally translates to higher revenue from trading commissions.

Moreover, the firm’s ending client equity rose to $486.3 billion, a substantial 41% increase from the same month last year and 6% higher than the previous month. This metric reflects robust client confidence and growth in assets under management.

Another critical data point is the ending client margin loan balances, which reached $53.1 billion, up 33% year-over-year and 5% month-over-month. This growth can potentially boost the firm’s interest income from client loans, enhancing overall profitability.

For the retail investor, these metrics signify strong operational performance and consistent client engagement. However, it's important to consider potential market volatility and regulatory changes that could impact future performance.

Rating: 1 (Positive)

Market Research Analyst

From a market research perspective, Interactive Brokers’ performance metrics offer valuable insights into the broader market trends and client behavior. The 27% increase in client accounts to 2.86 million suggests that Interactive Brokers is successfully attracting new clients, likely due to competitive pricing and a robust trading platform.

Additionally, the average commission per cleared commissionable order of $3.01 indicates a well-optimized fee structure, balancing affordability for clients while ensuring revenue for the firm. The breakdown of average commissions across different asset classes—stocks, equity options and futures—also provides a nuanced view of where the firm is generating its revenue.

These metrics collectively paint a picture of a firm that is not only growing but also diversifying its revenue streams. However, it’s important to monitor how these figures trend over time, as sustained growth is key to long-term success.

Rating: 1 (Positive)

06/03/2024 - 12:34 PM

GREENWICH, Conn.--(BUSINESS WIRE)-- Interactive Brokers Group, Inc. (Nasdaq: IBKR) an automated global electronic broker, today reported its Electronic Brokerage monthly performance metrics for May.

Brokerage highlights for the month included:

• 2.360 million Daily Average Revenue Trades (DARTs)¹, 27% higher than prior year and 1% higher than prior month.
• Ending client equity of $486.3 billion, 41% higher than prior year and 6% higher than prior month.
• Ending client margin loan balances of $53.1 billion, 33% higher than prior year and 5% higher than prior month.
• Ending client credit balances of $106.7 billion, including $4.0 billion in insured bank deposit sweeps², 8% higher than prior year and 1% higher than prior month.
• 2.86 million client accounts, 27% higher than prior year and 2% higher than prior month.
• 186 annualized average cleared DARTs¹ per client account.
• Average commission per cleared Commissionable Order³ of $3.01 including exchange, clearing and regulatory fees. Key products:

May 2024

Average

Average Commission per

Order Size

Cleared Commissionable Order

Stocks

1,131 shares

$2.12

Equity Options

6.6 contracts

$4.04

Futures

3.2 contracts

$4.61

Futures include options on futures. We estimate exchange, clearing and regulatory fees to be 57% of the futures commissions.

Other financial information for Interactive Brokers Group:

• GLOBAL⁴: The value of the GLOBAL, reported in U.S. dollars, increased by 0.32% in May.

In the interest of transparency, we quantify our IBKR PRO clients’ all-in cost of trade execution below.

For the full multimedia release with graph see link:
https://www.interactivebrokers.com/MonthlyMetrics

• Average U.S. Reg-NMS stock trade was $21,985 in May (dividing 2c by 1a in table below).
• In May, IBKR PRO clients’ total cost of executing and clearing U.S. Reg.-NMS stocks through IB was about 3.3 basis points of trade money⁵, as, measured against a daily VWAP⁶ benchmark (3.2 basis points net cost for the rolling twelve months).

IBKR PRO Clients' Reg.-NMS Stock Trading Expense Detail
All amounts are in millions, except %
													Previous
	Jun '23	Jul '23	Aug '23	Sep '23	Oct '23	Nov '23	Dec '23	Jan '24	Feb '24	Mar '24	Apr '24	May '24	12 Months
#1a - Number of orders
Buys	6.04	5.84	6.56	5.14	6.01	5.44	5.61	6.79	7.24	8.51	8.36	8.80	80.34
Sells	4.62	4.35	4.81	3.67	4.29	4.25	4.48	4.92	5.38	6.23	6.21	6.67	59.88
Total	10.66	10.19	11.37	8.81	10.30	9.69	10.09	11.71	12.62	14.74	14.57	15.47	140.22
#1b - Number of shares purchased or sold
Shares bought	2,607	2,369	2,858	2,132	2,447	2,431	2,596	2,639	2,636	3,432	3,387	4,712	34,246
Shares sold	2,495	2,262	2,720	2,044	2,367	2,296	2,471	2,551	2,499	3,189	3,190	4,374	32,457
Total	5,102	4,631	5,578	4,176	4,814	4,727	5,067	5,189	5,135	6,621	6,577	9,087	66,703
#2 - Trade money including price, commissions and fees
2a Buy money	$128,303	$116,426	$129,975	$102,405	$124,119	$119,396	$115,908	$133,951	$148,224	$165,938	$161,619	$170,762	$1,617,026
2b Sell money	$126,129	$113,811	$131,518	$103,953	$125,174	$118,893	$114,742	$131,649	$143,433	$163,285	$165,541	$169,343	$1,607,472
2c Total	$254,432	$230,237	$261,493	$206,358	$249,294	$238,290	$230,650	$265,601	$291,657	$329,223	$327,160	$340,105	$3,224,498
#3 - Trade value at Daily VWAP
3a Buy value	$128,262	$116,395	$129,887	$102,374	$124,109	$119,426	$115,916	$133,917	$148,162	$165,825	$161,534	$170,686	$1,616,493
3b Sell value	$126,175	$113,855	$131,510	$103,980	$125,212	$118,981	$114,806	$131,705	$143,451	$163,313	$165,602	$169,379	$1,607,967
3c Total	$254,438	$230,250	$261,397	$206,353	$249,321	$238,407	$230,722	$265,622	$291,612	$329,138	$327,135	$340,066	$3,224,461
#4 - Total trade expense, including commissions and fees, relative to Daily VWAP
4a Buys (2a-3a)	$40.3	$30.5	$88.2	$31.3	$9.9	($30.0)	($8.3)	$34.2	$62.5	$113.3	$85.1	$75.4	$532.4
4b Sells (3b-2b)	$46.2	$44.2	($8.0)	$26.6	$37.2	$87.3	$63.8	$55.2	$18.0	$28.0	$60.7	$36.0	$495.2
4c Total trade expense	$86.5	$74.7	$80.2	$57.9	$47.2	$57.3	$55.6	$89.4	$80.5	$141.3	$145.8	$111.4	$1,027.7
Trade expense as percentage of trade money
4c/2c	0.034%	0.032%	0.031%	0.028%	0.019%	0.024%	0.024%	0.034%	0.028%	0.043%	0.045%	0.033%	0.032%
#5 - Trade expense categories
5a Total commissions & fees	$22.7	$20.7	$23.6	$18.3	$21.5	$21.1	$21.8	$23.4	$23.7	$29.2	$28.8	$36.1	$290.9
5b Execution cost (4c-5a)	$63.8	$54.0	$56.6	$39.5	$25.7	$36.2	$33.7	$66.0	$56.7	$112.1	$117.0	$75.4	$736.7
#6 - Trade expense categories as percentage of trade money
Total commissions & fees (5a/2c)	0.009%	0.009%	0.009%	0.009%	0.009%	0.009%	0.009%	0.009%	0.009%	0.009%	0.009%	0.011%	0.009%
Execution cost (5b/2c)	0.025%	0.023%	0.022%	0.019%	0.010%	0.015%	0.015%	0.025%	0.019%	0.034%	0.036%	0.022%	0.023%
Net Expense to IB Clients	0.034%	0.032%	0.031%	0.028%	0.019%	0.024%	0.024%	0.034%	0.028%	0.043%	0.045%	0.033%	0.032%

The above illustrates that the rolling twelve months’ average all-in cost of an IBKR PRO client U.S. Reg.-NMS stock trade was 3.2 basis points.

________________
Note 1: Daily Average Revenue Trades (DARTs) – customer orders divided by the number of trading days in the period.

Note 2: FDIC insured client bank deposit sweep program balances with participating banks. These deposits are not reported in the Company’s statement of financial condition.

Note 3: Commissionable Order – a customer order that generates commissions.

Note 4: In connection with our currency diversification strategy, we have determined to base our net worth in GLOBALs, a basket of 10 major currencies in which we hold our equity. The total effect of the currency diversification strategy is reported in Comprehensive Income and the components are reported in (1) Other Income and (2) Other Comprehensive Income (“OCI”) on the balance sheet. The effect of the GLOBAL on our comprehensive income can be estimated by multiplying the total equity for the period by the change in the U.S. dollar value of the GLOBAL during the same period.

Note 5: Trade money is the total amount of money clients spent or received, including all commissions and fees.

Note 6: Consistent with the clients’ trading activity, the computed VWAP benchmark includes extended trading hours.

_________________
More information, including historical results for each of the above metrics, can be found on the investor relations page of the Company’s corporate web site, www.interactivebrokers.com/ir.

About Interactive Brokers Group, Inc.:

Interactive Brokers Group affiliates provide automated trade execution and custody of securities, commodities, and foreign exchange around the clock on over 150 markets in numerous countries and currencies, from a single unified platform to clients worldwide. We serve individual investors, hedge funds, proprietary trading groups, financial advisors and introducing brokers. Our four decades of focus on technology and automation has enabled us to equip our clients with a uniquely sophisticated platform to manage their investment portfolios. We strive to provide our clients with advantageous execution prices and trading, risk and portfolio management tools, research facilities and investment products, all at low or no cost, positioning them to achieve superior returns on investments. Interactive Brokers has consistently earned recognition as a top broker, garnering multiple awards and accolades from respected industry sources such as Barron’s, Investopedia, Stockbrokers.com, and many others.

Cautionary Note Regarding Forward-Looking Statements:

The foregoing information contains certain forward-looking statements that reflect the company's current views with respect to certain current and future events and financial performance. These forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the company's operations and business environment which may cause the company's actual results to be materially different from any future results, expressed or implied, in these forward-looking statements. Any forward-looking statements in this release are based upon information available to the company on the date of this release. The company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any statements expressed or implied therein will not be realized. Additional information on risk factors that could potentially affect the company's financial results may be found in the company's filings with the Securities and Exchange Commission.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240603767749/en/

Interactive Brokers Group, Inc.: Rob Garfield - media@ibkr.com

Source: Interactive Brokers Group, Inc.

FAQ

What were Interactive Brokers' DARTs for May 2024?

Interactive Brokers reported 2.36 million Daily Average Revenue Trades (DARTs) for May 2024, a 27% increase from the previous year.

How much client equity did Interactive Brokers report for May 2024?

Interactive Brokers reported $486.3 billion in client equity for May 2024, which is 41% higher than the previous year.

What were the client margin loan balances for Interactive Brokers in May 2024?

Interactive Brokers reported client margin loan balances of $53.1 billion for May 2024, up 33% from the previous year.

How many client accounts did Interactive Brokers have in May 2024?

Interactive Brokers had 2.86 million client accounts in May 2024, a 27% increase from the prior year.

What was the average commission per order for Interactive Brokers in May 2024?

The average commission per cleared Commissionable Order for Interactive Brokers in May 2024 was $3.01.

What is the total trade expense for IBKR PRO clients in May 2024?

The total trade expense for IBKR PRO clients in May 2024 was 3.3 basis points, measured against the daily VWAP benchmark.