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

Rhea-AI Summary

Interactive Brokers Group (Nasdaq: IBKR) reported its June 2024 brokerage performance metrics, showing significant growth across key indicators. Daily Average Revenue Trades (DARTs) were 2.469 million, up 26% year-over-year and 5% month-over-month. Client equity reached $497.2 billion, marking a 36% increase from last year and 2% from the prior month. Client margin loan balances rose to $55.1 billion, up 32% year-over-year and 4% month-over-month, while client credit balances stood at $107.1 billion, an 8% annual increase. The number of client accounts climbed to 2.92 million, a 28% rise from last year.

Average commission per cleared order was $2.99. The mark-to-market gain on U.S. government securities for Q2 was $489,000. The value of the GLOBAL currency basket decreased by 0.21% in June. For U.S. Reg.-NMS stock trades, the average expense was 4.1 basis points of trade money for June and 3.3 basis points for the rolling twelve months.

Positive

• 2.469 million DARTs, up 26% YoY and 5% MoM.
• Client equity reached $497.2 billion, a 36% YoY increase.
• Client margin loan balances rose to $55.1 billion, up 32% YoY.
• Client credit balances at $107.1 billion, an 8% annual increase.
• 2.92 million client accounts, a 28% rise YoY.
• Mark-to-market gain on U.S. government securities was $489,000 for Q2.

Negative

• The value of the GLOBAL currency basket decreased by 0.21% in June.

Insights

Financial Analyst

The latest brokerage metrics from Interactive Brokers Group (IBKR) highlight substantial growth in several key areas. Daily Average Revenue Trades (DARTs) increased by 26% year-over-year and 5% from the prior month. This rise in trading activity is indicative of heightened client engagement and market activity, which usually translates to increased commission revenue for IBKR.

The ending client equity of $497.2 billion, marking a 36% year-over-year increase, suggests a healthy influx of new clients and/or increased investment from existing clients. This is a positive indicator for the company’s financial health and stability. Additionally, the client margin loan balances are up by 32% from the previous year. Higher margin lending generally indicates investor confidence, as clients are willing to leverage their investments.

Client credit balances of $107.1 billion and nearly flat month-over-month suggest stable cash conditions among clients, a beneficial aspect for IBKR as it indicates a consistent fee income stream. Additionally, client accounts increased by 28%, which is a strong signal of growing market penetration and customer acquisition.

One key number to watch is the average commission per cleared Commissionable Order at $2.99. This figure is vital for understanding IBKR’s revenue generation from trading activities. Given the positive trends in all these metrics, IBKR appears to be well-positioned for continued growth.

Market Research Analyst

Interactive Brokers’ metrics for June present an interesting snapshot of the current trading environment. The significant year-over-year growth in DARTs and client equity signals increasing trading volumes and engagement. The rise in DARTs suggests that IBKR is capturing more market share and benefiting from volatility in the financial markets, which typically increases trading activity.

A noteworthy point is the increase in client margin loan balances by 32%. This uptick can reflect a bullish sentiment among the clients who are willing to leverage their positions, potentially expecting market appreciation. However, it also introduces an element of risk as margin loans can lead to higher volatility in downturns.

The continuous growth in the number of client accounts up by 28% underscores a successful client acquisition strategy, likely aided by IBKR's reputation for low costs and diverse trading products. The company's transparent reporting of metrics, including the cost of executing U.S. Reg.-NMS stocks, adds to customer trust and loyalty.

A critical observation here is the relatively consistent client credit balances, which indicate financial discipline and liquidity among IBKR’s clientele.

Overall, these metrics reveal a robust growth trajectory for IBKR, supported by increased trading activity and effective client acquisition.

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

Brokerage highlights for the month included:

• 2.469 million Daily Average Revenue Trades (DARTs)¹, 26% higher than prior year and 5% higher than prior month.
• Ending client equity of $497.2 billion, 36% higher than prior year and 2% higher than prior month.
• Ending client margin loan balances of $55.1 billion, 32% higher than prior year and 4% higher than prior month.
• Ending client credit balances of $107.1 billion, including $4.1 billion in insured bank deposit sweeps², 8% higher than prior year and about even with prior month.
• 2.92 million client accounts, 28% higher than prior year and 2% higher than prior month.
• 190 annualized average cleared DARTs¹ per client account.
• Average commission per cleared Commissionable Order³ of $2.99 including exchange, clearing and regulatory fees. Key products:

June 2024

Average

Average Commission per

Order Size

Cleared Commissionable Order

Stocks

910 shares

$1.99

Equity Options

6.9 contracts

$4.28

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:

• Mark to market on U.S. government securities portfolio⁴ was a gain of $489,000 for the quarter ended June 30^th.
• GLOBAL⁵: The value of the GLOBAL, reported in U.S. dollars, decreased by 0.21% in June and decreased by 0.22% for the quarter ended June 30^th.

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 $21,541 in June (dividing 2c by 1a in table below).
• In June, IBKR PRO clients’ total cost of executing and clearing U.S. Reg.-NMS stocks through IB was about 4.1 basis points of trade money⁶, as, measured against a daily VWAP⁷ 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
	Jul '23		Aug '23		Sep '23		Oct '23		Nov '23		Dec '23		Jan '24		Feb '24		Mar '24		Apr '24		May '24		Jun '24		12 Months
#1a - Number of orders
Buys	5.84		6.56		5.14		6.01		5.44		5.61		6.79		7.24		8.51		8.36		8.80		8.07		82.37
Sells	4.35		4.81		3.67		4.29		4.25		4.48		4.92		5.38		6.23		6.21		6.67		5.83		61.09
Total	10.19		11.37		8.81		10.30		9.69		10.09		11.71		12.62		14.74		14.57		15.47		13.90		143.46
#1b - Number of shares purchased or sold
Shares bought	2,369		2,858		2,132		2,447		2,431		2,596		2,639		2,636		3,432		3,387		4,712		3,305		34,944
Shares sold	2,262		2,720		2,044		2,367		2,296		2,471		2,551		2,499		3,189		3,190		4,374		3,100		33,063
Total	4,631		5,578		4,176		4,814		4,727		5,067		5,189		5,135		6,621		6,577		9,087		6,405		68,007
#2 - Trade money including price, commissions and fees
2a Buy money	$116,426		$129,975		$102,405		$124,119		$119,396		$115,908		$133,951		$148,224		$165,938		$161,619		$170,762		$151,903		$1,640,626
2b Sell money	$113,811		$131,518		$103,953		$125,174		$118,893		$114,742		$131,649		$143,433		$163,285		$165,541		$169,343		$147,514		$1,628,857
2c Total	$230,237		$261,493		$206,358		$249,294		$238,290		$230,650		$265,601		$291,657		$329,223		$327,160		$340,105		$299,417		$3,269,483
#3 - Trade value at Daily VWAP
3a Buy value	$116,395		$129,887		$102,374		$124,109		$119,426		$115,916		$133,917		$148,162		$165,825		$161,534		$170,686		$151,684		$1,639,914
3b Sell value	$113,855		$131,510		$103,980		$125,212		$118,981		$114,806		$131,705		$143,451		$163,313		$165,602		$169,379		$147,417		$1,629,209
3c Total	$230,250		$261,397		$206,353		$249,321		$238,407		$230,722		$265,622		$291,612		$329,138		$327,135		$340,066		$299,101		$3,269,124
#4 - Total trade expense, including commissions and fees, relative to Daily VWAP
4a Buys (2a-3a)	$30.5		$88.2		$31.3		$9.9		($30.0)		($8.3)		$34.2		$62.5		$113.3		$85.1		$75.4		$219.1		$711.2
4b Sells (3b-2b)	$44.2		($8.0)		$26.6		$37.2		$87.3		$63.8		$55.2		$18.0		$28.0		$60.7		$36.0		($97.1)		$352.0
4c Total trade expense	$74.7		$80.2		$57.9		$47.2		$57.3		$55.6		$89.4		$80.5		$141.3		$145.8		$111.4		$122.0		$1,063.2
Trade expense as percentage of trade money
4c/2c	0.032%		0.031%		0.028%		0.019%		0.024%		0.024%		0.034%		0.028%		0.043%		0.045%		0.033%		0.041%		0.033%
#5 - Trade expense categories
5a Total commissions & fees	$20.7		$23.6		$18.3		$21.5		$21.1		$21.8		$23.4		$23.7		$29.2		$28.8		$36.1		$30.4		$298.6
5b Execution cost (4c-5a)	$54.0		$56.6		$39.5		$25.7		$36.2		$33.7		$66.0		$56.7		$112.1		$117.0		$75.4		$91.6		$764.5
#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%		0.011%		0.010%		0.010%
Execution cost (5b/2c)	0.023%		0.022%		0.019%		0.010%		0.015%		0.015%		0.025%		0.019%		0.034%		0.036%		0.022%		0.031%		0.023%
Net Expense to IB Clients	0.032%		0.031%		0.028%		0.019%		0.024%		0.024%		0.034%		0.028%		0.043%		0.045%		0.033%		0.041%		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: 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. 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/20240701890009/en/

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

Source: Interactive Brokers Group, Inc.

FAQ

What were Interactive Brokers' Daily Average Revenue Trades (DARTs) for June 2024?

Interactive Brokers reported 2.469 million Daily Average Revenue Trades (DARTs) for June 2024, a 26% increase year-over-year and a 5% increase from the previous month.

How much client equity did Interactive Brokers hold at the end of June 2024?

At the end of June 2024, Interactive Brokers held $497.2 billion in client equity, which is a 36% increase from the previous year.

What were Interactive Brokers' client margin loan balances for June 2024?

Client margin loan balances for Interactive Brokers in June 2024 were $55.1 billion, up 32% year-over-year.

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

The average commission per cleared order for Interactive Brokers in June 2024 was $2.99, including exchange, clearing, and regulatory fees.

How did Interactive Brokers' GLOBAL currency basket perform in June 2024?

The value of Interactive Brokers' GLOBAL currency basket decreased by 0.21% in June 2024.

What was the mark-to-market gain on U.S. government securities for Interactive Brokers in Q2 2024?

Interactive Brokers reported a mark-to-market gain of $489,000 on U.S. government securities for the second quarter of 2024.