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

Rhea-AI Summary

Interactive Brokers Group (IBKR) reported strong performance metrics for July 2024. Key highlights include:

- 2.756 million Daily Average Revenue Trades (DARTs), up 38% year-over-year and 12% month-over-month

- Client equity reached $509.5 billion, a 32% increase from the previous year

- Client margin loan balances grew to $56.1 billion, up 30% year-over-year

- Client accounts totaled 3.00 million, a 29% increase from the previous year

The company's IBKR PRO clients' total cost of executing and clearing U.S. Reg.-NMS stocks was approximately 3.6 basis points of trade money in July, slightly higher than the rolling twelve-month average of 3.3 basis points.

Positive

• Daily Average Revenue Trades (DARTs) increased 38% year-over-year to 2.756 million
• Client equity grew 32% year-over-year to $509.5 billion
• Client margin loan balances rose 30% year-over-year to $56.1 billion
• Total client accounts increased 29% year-over-year to 3.00 million
• Client credit balances, including insured bank deposit sweeps, grew 11% year-over-year to $109.2 billion

Negative

• Execution cost for IBKR PRO clients increased to 3.6 basis points in July, compared to the 12-month average of 3.3 basis points

Insights

Financial Analyst

Interactive Brokers Group's July 2024 performance metrics reveal significant growth across key areas, indicating a robust business environment. The 32% year-over-year increase in client equity to $509.5 billion is particularly noteworthy, suggesting strong client confidence and market performance. The 38% rise in Daily Average Revenue Trades (DARTs) to 2.756 million indicates heightened trading activity, which directly impacts the company's revenue stream.

The growth in client accounts by 29% year-over-year to 3 million is impressive, showing the company's ability to attract and retain customers in a competitive brokerage landscape. This expansion in the client base, coupled with the 30% increase in margin loan balances to $56.1 billion, suggests that clients are actively engaging in leveraged trading strategies, potentially boosting Interactive Brokers' interest income.

The average commission per cleared Commissionable Order of $2.78 appears competitive, especially considering it includes exchange, clearing and regulatory fees. This pricing strategy likely contributes to the company's ability to attract and retain clients while maintaining profitability.

Overall, these metrics paint a picture of a thriving brokerage business with strong growth momentum. However, investors should also consider the potential risks associated with increased market volatility and regulatory changes in the brokerage industry.

Market Research Analyst

The July 2024 metrics for Interactive Brokers Group offer valuable insights into retail investor behavior and market trends. The 38% year-over-year increase in DARTs, coupled with a 29% growth in client accounts, suggests a sustained surge in retail trading activity. This trend aligns with the broader market phenomenon of increased retail participation we've observed in recent years.

Interestingly, the average commission per cleared Commissionable Order varies significantly across product types. For stocks, at $1.86 per order with an average size of 763 shares, Interactive Brokers appears to be maintaining a competitive pricing structure. The higher commissions for equity options ($4.02 for 6.6 contracts) and futures ($4.21 for 3.0 contracts) reflect the complexity and risk associated with these derivative products.

The 32% year-over-year increase in client equity to $509.5 billion outpaces the growth in client accounts, indicating that existing clients are either depositing more funds or experiencing portfolio appreciation. This could be a positive sign for market sentiment among retail investors.

The detailed breakdown of IBKR PRO clients' Reg.-NMS stock trading expenses is particularly illuminating. With a total trade expense of 3.6 basis points in July (3.3 basis points for the rolling twelve months), Interactive Brokers demonstrates its ability to provide cost-effective execution for its more sophisticated clientele. This competitive edge in trading costs could be a key factor in attracting and retaining active traders and small institutional clients.

Tech Expert

Interactive Brokers' July 2024 metrics showcase the company's technological prowess in handling increased trading volumes efficiently. The ability to process 2.756 million Daily Average Revenue Trades (DARTs) - a 38% year-over-year increase - without reported issues speaks to the robustness of their trading infrastructure.

The company's automated global electronic brokerage model appears to be scaling well, as evidenced by the 29% growth in client accounts to 3 million. This scalability is important in the highly competitive and technology-driven brokerage industry.

Interactive Brokers' transparency in reporting detailed execution statistics, including the breakdown of trading expenses for IBKR PRO clients, demonstrates their commitment to leveraging technology for best execution practices. The low all-in cost of 3.6 basis points for U.S. Reg.-NMS stock trades in July (measured against a daily VWAP benchmark) highlights the efficiency of their order routing and execution algorithms.

The consistent performance across various order sizes and types (as seen in the commission structure for stocks, equity options and futures) suggests a well-optimized trading platform capable of handling diverse client needs. This technological adaptability is likely a key factor in attracting a wide range of clients, from retail investors to more sophisticated traders.

However, as trading volumes and client numbers continue to grow, Interactive Brokers will need to ensure ongoing investment in their technology infrastructure to maintain this level of performance and cost-effectiveness.

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

Brokerage highlights for the month included:

• 2.756 million Daily Average Revenue Trades (DARTs)¹, 38% higher than prior year and 12% higher than prior month.
• Ending client equity of $509.5 billion, 32% higher than prior year and 2% higher than prior month.
• Ending client margin loan balances of $56.1 billion, 30% higher than prior year and 2% higher than prior month.
• Ending client credit balances of $109.2 billion, including $4.2 billion in insured bank deposit sweeps², 11% higher than prior year and 2% higher than prior month.
• 3.00 million client accounts, 29% higher than prior year and 2% higher than prior month.
• 206 annualized average cleared DARTs¹ per client account.
• Average commission per cleared Commissionable Order³ of $2.78 including exchange, clearing and regulatory fees. Key products:

July 2024			Average				Average Commission per
			Order Size				Cleared Commissionable Order
Stocks			763 shares				$1.86
Equity Options			6.6 contracts				$4.02
Futures			3.0 contracts				$4.21

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 0.38% in July.

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 $21,636 in July (dividing 2c by 1a in table below).
• In July, IBKR PRO clients’ total cost of executing and clearing U.S. Reg.-NMS stocks through IB was about 3.6 basis points of trade money⁵, as, measured against a daily VWAP⁶ benchmark (3.3 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
	Aug '23	Sep '23	Oct '23	Nov '23	Dec '23	Jan '24	Feb '24	Mar '24	Apr '24	May '24	Jun '24	Jul '24		12 Months
#1a - Number of orders
Buys	6.56	5.14	6.01	5.44	5.61	6.79	7.24	8.51	8.36	8.80	8.07	10.09		86.62
Sells	4.81	3.67	4.29	4.25	4.48	4.92	5.38	6.23	6.21	6.67	5.83	7.55		64.29
Total	11.37	8.81	10.30	9.69	10.09	11.71	12.62	14.74	14.57	15.47	13.90	17.64		150.91
#1b - Number of shares purchased or sold
Shares bought	2,858	2,132	2,447	2,431	2,596	2,639	2,636	3,432	3,387	4,712	3,305	3,855		36,431
Shares sold	2,720	2,044	2,367	2,296	2,471	2,551	2,499	3,189	3,190	4,374	3,100	3,767		34,567
Total	5,578	4,176	4,814	4,727	5,067	5,189	5,135	6,621	6,577	9,087	6,405	7,622		70,998
#2 - Trade money including price, commissions and fees
2a Buy money	$129,975	$102,405	$124,119	$119,396	$115,908	$133,951	$148,224	$165,938	$161,619	$170,762	$151,903	$189,920		$1,714,120
2b Sell money	$131,518	$103,953	$125,174	$118,893	$114,742	$131,649	$143,433	$163,285	$165,541	$169,343	$147,514	$191,745		$1,706,791
2c Total	$261,493	$206,358	$249,294	$238,290	$230,650	$265,601	$291,657	$329,223	$327,160	$340,105	$299,417	$381,664		$3,420,911
#3 - Trade value at Daily VWAP
3a Buy value	$129,887	$102,374	$124,109	$119,426	$115,916	$133,917	$148,162	$165,825	$161,534	$170,686	$151,684	$189,851		$1,713,370
3b Sell value	$131,510	$103,980	$125,212	$118,981	$114,806	$131,705	$143,451	$163,313	$165,602	$169,379	$147,417	$191,812		$1,707,166
3c Total	$261,397	$206,353	$249,321	$238,407	$230,722	$265,622	$291,612	$329,138	$327,135	$340,066	$299,101	$381,663		$3,420,536
#4 - Total trade expense, including commissions and fees, relative to Daily VWAP
4a Buys (2a-3a)	$88.2	$31.3	$9.9	($30.0)	($8.3)	$34.2	$62.5	$113.3	$85.1	$75.4	$219.1	$68.8		$749.4
4b Sells (3b-2b)	($8.0)	$26.6	$37.2	$87.3	$63.8	$55.2	$18.0	$28.0	$60.7	$36.0	($97.1)	$67.5		$375.3
4c Total trade expense	$80.2	$57.9	$47.2	$57.3	$55.6	$89.4	$80.5	$141.3	$145.8	$111.4	$122.0	$136.3		$1,124.7
Trade expense as percentage of trade money
4c/2c	0.031%	0.028%	0.019%	0.024%	0.024%	0.034%	0.028%	0.043%	0.045%	0.033%	0.041%	0.036%		0.033%
#5 - Trade expense categories
5a Total commissions & fees	$23.6	$18.3	$21.5	$21.1	$21.8	$23.4	$23.7	$29.2	$28.8	$36.1	$30.4	$37.1		$315.0
5b Execution cost (4c-5a)	$56.6	$39.5	$25.7	$36.2	$33.7	$66.0	$56.7	$112.1	$117.0	$75.4	$91.6	$99.2		$809.7
#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%	0.011%	0.010%	0.010%		0.009%
Execution cost (5b/2c)	0.022%	0.019%	0.010%	0.015%	0.015%	0.025%	0.019%	0.034%	0.036%	0.022%	0.031%	0.026%		0.024%
Net Expense to IB Clients	0.031%	0.028%	0.019%	0.024%	0.024%	0.034%	0.028%	0.043%	0.045%	0.033%	0.041%	0.036%		0.033%

The above illustrates that the rolling twelve months’ average all-in cost of an IBKR PRO client U.S. Reg.-NMS stock trade was 3.3 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/20240801636666/en/

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

Source: Interactive Brokers Group, Inc.

FAQ

What was Interactive Brokers Group's (IBKR) Daily Average Revenue Trades (DARTs) for July 2024?

Interactive Brokers Group (IBKR) reported 2.756 million Daily Average Revenue Trades (DARTs) for July 2024, which is 38% higher than the previous year and 12% higher than the previous month.

How much did Interactive Brokers' (IBKR) client equity grow in July 2024 compared to the previous year?

Interactive Brokers' (IBKR) client equity grew by 32% year-over-year, reaching $509.5 billion in July 2024.

What was the total number of client accounts for Interactive Brokers (IBKR) in July 2024?

Interactive Brokers (IBKR) reported a total of 3.00 million client accounts in July 2024, which is 29% higher than the previous year and 2% higher than the previous month.

How did Interactive Brokers' (IBKR) client margin loan balances change in July 2024?

Interactive Brokers' (IBKR) client margin loan balances reached $56.1 billion in July 2024, which is 30% higher than the previous year and 2% higher than the previous month.