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

Rhea-AI Summary

Interactive Brokers Group, Inc. (IBKR) reported strong performance metrics for March, with 2.412 million DARTs, 17% higher YoY. Ending client equity reached $465.9 billion, 36% higher YoY. Client margin loan balances were $51.2 billion, 30% higher YoY. Client credit balances stood at $104.9 billion. IBKR had 2.75 million client accounts, 25% higher YoY, and 199 annualized average cleared DARTs per client account. Average commission per cleared Commissionable Order was $2.89. Despite a loss of $900,000 on U.S. government securities, IBKR showed resilience.

Insights

Market Research Analyst

The performance metrics released by Interactive Brokers Group, Inc. highlight a significant year-over-year growth in key areas such as Daily Average Revenue Trades (DARTs), client equity and margin loan balances. This growth indicates a robust increase in trading activity and client investment, which could be a reflection of heightened market volatility or an expansion in the company's client base. A 25% increase in client accounts suggests successful client acquisition strategies and could hint at increased market share.

However, the slight decrease in DARTs compared to the previous month may be worth monitoring as it could signal a plateau in trading activity or a shift in investor sentiment. Additionally, the mark-to-market loss on the U.S. government securities portfolio, while modest, is a reminder of the interest rate risk inherent in fixed income investments during periods of rate adjustments.

The increase in client credit balances, including insured bank deposit sweeps, indicates a strong liquidity position for clients, which could provide a cushion against market downturns or enable further investment opportunities. The report of average commission per cleared Commissionable Order offers insight into the company's revenue from trade executions and is a critical factor in assessing the company's profitability.

Financial Analyst

Interactive Brokers' reported figures, particularly the 36% year-over-year increase in ending client equity and the 30% increase in ending client margin loan balances, suggest a bullish sentiment among its clientele. This could result in higher revenue for the firm through interest income on margin loans and transaction-based fees. The reported average commission per cleared Commissionable Order also provides a glimpse into the company's pricing power and competitive positioning in the brokerage industry.

The GLOBAL index's slight decrease is not particularly alarming but should be watched as an indicator of the company's portfolio performance against broader market movements. The transparency provided by Interactive Brokers in reporting the all-in cost of trade execution for IBKR PRO clients is commendable and enhances the company's reputation for cost-efficiency, potentially attracting cost-sensitive traders.

Investors should consider these metrics in the context of the company's historical performance and industry trends to gauge the potential impact on future earnings. While the data is promising, it is essential to balance this with the understanding that market conditions can change rapidly, affecting trading volumes and client risk appetite.

Economist

From an economic perspective, the data released by Interactive Brokers can be interpreted as an indicator of broader economic trends. The increase in client equity and margin loan balances may reflect a more risk-tolerant environment, where investors are willing to leverage their investments to capitalize on potential market gains. This behavior often correlates with a growing economy or a bullish stock market.

However, the modest decrease in DARTs month-over-month could suggest that we are approaching an inflection point where investors start to exhibit caution, possibly due to economic uncertainties or anticipation of market corrections. This could precede a shift in economic sentiment, which is essential for forecasting market trends.

Moreover, the performance of the GLOBAL index, despite its slight decrease, offers insight into the international diversification of the company's portfolio and its exposure to currency risks. This is particularly relevant in a globalized economy where exchange rates and international trade can significantly impact investment returns.

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

Brokerage highlights for the month included:

• 2.412 million Daily Average Revenue Trades (DARTs)¹, 17% higher than prior year and 1% lower than prior month.
• Ending client equity of $465.9 billion, 36% higher than prior year and 4% higher than prior month.
• Ending client margin loan balances of $51.2 billion, 30% higher than prior year and 8% higher than prior month.
• Ending client credit balances of $104.9 billion, including $4.0 billion in insured bank deposit sweeps², 9% higher than prior year and 2% higher than prior month.
• 2.75 million client accounts, 25% higher than prior year and 2% higher than prior month.
• 199 annualized average cleared DARTs¹ per client account.
• Average commission per cleared Commissionable Order³ of $2.89 including exchange, clearing and regulatory fees. Key products:

March 2024	Average		Average Commission per
	Order Size		Cleared Commissionable Order
Stocks	910 shares		$1.87
Equity Options	6.8 contracts		$4.02
Futures	3.2 contracts		$4.62

Futures include options on futures. We estimate exchange, clearing and regulatory fees to be 56% of the futures commissions.

Other financial information for Interactive Brokers Group:

• Mark to market on U.S. government securities portfolio⁴ was a loss of $900,000 for the quarter ended March 31^st.
• GLOBAL⁵: The value of the GLOBAL, reported in U.S. dollars, decreased by 0.09% in March and decreased by 0.73% for the quarter ended March 31^st.

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 $22,335 in March (dividing 2c by 1a in table below).
• In March, IBKR PRO clients’ total cost of executing and clearing U.S. Reg.-NMS stocks through IB was about 4.3 basis points of trade money⁶, as measured against a daily VWAP⁷ benchmark (2.9 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
	Apr '23	May '23	Jun '23	Jul '23	Aug '23	Sep '23	Oct '23	Nov '23	Dec '23	Jan '24	Feb '24	Mar '24	12 Months
#1a - Number of orders
Buys	4.99	6.13	6.04	5.84	6.56	5.14	6.01	5.44	5.61	6.79	7.24	8.51	74.30
Sells	3.72	4.66	4.62	4.35	4.81	3.67	4.29	4.25	4.48	4.92	5.38	6.23	55.38
Total	8.71	10.79	10.66	10.19	11.37	8.81	10.30	9.69	10.09	11.71	12.62	14.74	129.68
#1b - Number of shares purchased or sold
Shares bought	2,336	2,706	2,607	2,369	2,858	2,132	2,447	2,431	2,596	2,639	2,636	3,432	31,189
Shares sold	2,158	2,606	2,495	2,262	2,720	2,044	2,367	2,296	2,471	2,551	2,499	3,189	29,657
Total	4,495	5,313	5,102	4,631	5,578	4,176	4,814	4,727	5,067	5,189	5,135	6,621	60,846
#2 - Trade money including price, commissions and fees
2a Buy money	$90,813	$114,892	$128,303	$116,426	$129,975	$102,405	$124,119	$119,396	$115,908	$133,951	$148,224	$165,938	$1,490,350
2b Sell money	$91,534	$111,882	$126,129	$113,811	$131,518	$103,953	$125,174	$118,893	$114,742	$131,649	$143,433	$163,285	$1,476,004
2c Total	$182,346	$226,774	$254,432	$230,237	$261,493	$206,358	$249,294	$238,290	$230,650	$265,601	$291,657	$329,223	$2,966,354
#3 - Trade value at Daily VWAP
3a Buy value	$90,785	$114,824	$128,262	$116,395	$129,887	$102,374	$124,109	$119,426	$115,916	$133,917	$148,162	$165,825	$1,489,882
3b Sell value	$91,534	$111,883	$126,175	$113,855	$131,510	$103,980	$125,212	$118,981	$114,806	$131,705	$143,451	$163,313	$1,476,404
3c Total	$182,319	$226,707	$254,438	$230,250	$261,397	$206,353	$249,321	$238,407	$230,722	$265,622	$291,612	$329,138	$2,966,286
#4 - Total trade expense, including commissions and fees, relative to Daily VWAP
4a Buys (2a-3a)	$27.5	$68.3	$40.3	$30.5	$88.2	$31.3	$9.9	($30.0)	($8.3)	$34.2	$62.5	$113.3	$467.7
4b Sells (3b-2b)	($0.0)	$1.4	$46.2	$44.2	($8.0)	$26.6	$37.2	$87.3	$63.8	$55.2	$18.0	$28.0	$399.8
4c Total trade expense	$27.4	$69.7	$86.5	$74.7	$80.2	$57.9	$47.2	$57.3	$55.6	$89.4	$80.5	$141.3	$867.6
Trade expense as percentage of trade money
4c/2c	0.015%	0.031%	0.034%	0.032%	0.031%	0.028%	0.019%	0.024%	0.024%	0.034%	0.028%	0.043%	0.029%
#5 - Trade expense categories
5a Total commissions & fees	$19.2	$23.4	$22.7	$20.7	$23.6	$18.3	$21.5	$21.1	$21.8	$23.4	$23.7	$29.2	$268.6
5b Execution cost (4c-5a)	$8.2	$46.3	$63.8	$54.0	$56.6	$39.5	$25.7	$36.2	$33.7	$66.0	$56.7	$112.1	$598.8
#6 - Trade expense categories as percentage of trade money
Total commissions & fees (5a/2c)	0.011%	0.011%	0.009%	0.009%	0.009%	0.009%	0.009%	0.009%	0.009%	0.009%	0.009%	0.009%	0.009%
Execution cost (5b/2c)	0.004%	0.020%	0.025%	0.023%	0.022%	0.019%	0.010%	0.015%	0.015%	0.025%	0.019%	0.034%	0.020%
Net Expense to IB Clients	0.015%	0.031%	0.034%	0.032%	0.031%	0.028%	0.019%	0.024%	0.024%	0.034%	0.028%	0.043%	0.029%

The above illustrates that the rolling twelve months’ average all-in cost of an IBKR PRO client U.S. Reg.-NMS stock trade was 2.9 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: Mark to market gains and losses on investments in U.S. government securities and associated hedges are included in Other Income. In the general course of business, we hold these investments to maturity. As a result, accumulated mark to market gains or losses should converge to zero at maturity. Accounting conventions require broker-dealers, unlike banks, to mark all investments to market.

Note 5: 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 6: Trade money is the total amount of money clients spent or received, including all commissions and fees.

Note 7: 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. For the sixth consecutive year, Barron’s ranked Interactive Brokers #1 with 5 out of 5 stars in its June 9, 2023, Best Online Brokers Review.

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/20240401390879/en/

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

Source: Interactive Brokers Group, Inc.

FAQ

What were Interactive Brokers Group, Inc.'s (IBKR) DARTs for March?

Interactive Brokers Group, Inc. (IBKR) reported 2.412 million Daily Average Revenue Trades (DARTs) for March, which was 17% higher than the previous year.

How did IBKR's client equity perform in March?

Ending client equity for Interactive Brokers Group, Inc. (IBKR) in March was $465.9 billion, marking a 36% increase from the previous year.

What was the percentage change in client margin loan balances for IBKR in March?

Interactive Brokers Group, Inc. (IBKR) saw a 30% increase in client margin loan balances in March compared to the previous year.

How many client accounts did IBKR have in March?

Interactive Brokers Group, Inc. (IBKR) had 2.75 million client accounts in March, reflecting a 25% increase from the prior year.

What was the average commission per cleared Commissionable Order for IBKR in March?

The average commission per cleared Commissionable Order for Interactive Brokers Group, Inc. (IBKR) in March was $2.89.

Did IBKR incur any losses on its U.S. government securities portfolio in March?

Interactive Brokers Group, Inc. (IBKR) reported a loss of $900,000 on its U.S. government securities portfolio for the quarter ended March 31st.