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

Rhea-AI Summary

Interactive Brokers Group, Inc. (IBKR) reported strong brokerage metrics for April 2024, with 2.339 million DARTs, 33% higher YoY, and 3% lower MoM. Client equity reached $457.8 billion, up 34% YoY. Total client accounts rose by 26% YoY to 2.81 million. The average commission per cleared Commissionable Order was $3.00. IBKR PRO clients' trade expense relative to Daily VWAP was 4.5 basis points.

Positive

• Strong performance metrics for April 2024 compared to the previous year.

• Significant increase in Daily Average Revenue Trades (DARTs) and client equity.

• Growth in client accounts and commission per cleared order.

Negative

• Trade expense as a percentage of trade money slightly increased.

• Ending client margin loan balances and credit balances were lower than the previous month.

Insights

Financial Analyst

Interactive Brokers Group's report of a 33% year-over-year increase in Daily Average Revenue Trades (DARTs) signifies a robust growth in trading activity, which typically translates to higher transaction-based revenue. The increase in ending client equity by 34% indicates strong customer asset accumulation, which may enhance the firm's asset-based revenues, such as interest on margin loans.

However, the slight month-to-month decreases in DARTs, client equity and margin loan balances suggest a potential cooling off from previous months' activity levels. This warrants monitoring as a trend of decrease could lead to concerns about revenue sustainability.

The reported average commission per cleared Commissionable Order is a critical metric for understanding the company's pricing strategy and how it competes within the brokerage industry. In this case, a commission of $3.00 per order could reflect a balance between maintaining competitive rates and ensuring revenue generation.

Market Research Analyst

From a market trend perspective, the growth in client accounts by 26% compared to the previous year reflects favorably on Interactive Brokers Group's market penetration and customer acquisition strategies. As retail trading activity has surged in recent years, the ability to attract and retain clients is essential for brokerages to capitalize on increased market participation.

Moreover, the 188 annualized average cleared DARTs per client account provides insight into client engagement and trading frequency. A higher figure here can be indicative of sustained user activity, which is vital for the company's transaction-driven business model.

Currency Analyst

The report also touches upon the company's currency diversification strategy, using the GLOBAL to mitigate currency risk exposure. The slight decrease by 0.33% in the U.S. dollar value of the GLOBAL reflects the complexities of currency management within international operations. This minor change is unlikely to have a significant direct impact on the company's financials but is part of a strategic approach to financial stability in a volatile foreign exchange environment.

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

Brokerage highlights for the month included:

• 2.339 million Daily Average Revenue Trades (DARTs)¹, 33% higher than prior year and 3% lower than prior month.
• Ending client equity of $457.8 billion, 34% higher than prior year and 2% lower than prior month.
• Ending client margin loan balances of $50.7 billion, 28% higher than prior year and 1% lower than prior month.
• Ending client credit balances of $105.8 billion, including $4.0 billion in insured bank deposit sweeps², 7% higher than prior year and 1% higher than prior month.
• 2.81 million client accounts, 26% higher than prior year and 2% higher than prior month.
• 188 annualized average cleared DARTs¹ per client account.
• Average commission per cleared Commissionable Order³ of $3.00 including exchange, clearing and regulatory fees. Key products:

April 2024				Average				Average Commission per
				Order Size				Cleared Commissionable Order
Stocks				964 shares				$1.90
Equity Options				6.5 contracts				$4.14
Futures				3.1 contracts				$4.37

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, decreased by 0.33% in April.

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 $22,454 in April (dividing 2c by 1a in table below).
• In April, IBKR PRO clients’ total cost of executing and clearing U.S. Reg.-NMS stocks through IB was about 4.5 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
		May '23		Jun '23		Jul '23		Aug '23		Sep '23		Oct '23		Nov '23		Dec '23		Jan '24		Feb '24		Mar '24		Apr '24		12 Months
#1a - Number of orders
Buys		6.13		6.04		5.84		6.56		5.14		6.01		5.44		5.61		6.79		7.24		8.51		8.36		77.67
Sells		4.66		4.62		4.35		4.81		3.67		4.29		4.25		4.48		4.92		5.38		6.23		6.21		57.87
Total		10.79		10.66		10.19		11.37		8.81		10.30		9.69		10.09		11.71		12.62		14.74		14.57		135.54
#1b - Number of shares purchased or sold
Shares bought		2,706		2,607		2,369		2,858		2,132		2,447		2,431		2,596		2,639		2,636		3,432		3,387		32,240
Shares sold		2,606		2,495		2,262		2,720		2,044		2,367		2,296		2,471		2,551		2,499		3,189		3,190		30,689
Total		5,313		5,102		4,631		5,578		4,176		4,814		4,727		5,067		5,189		5,135		6,621		6,577		62,929
#2 - Trade money including price, commissions and fees
2a Buy money		$114,892		$128,303		$116,426		$129,975		$102,405		$124,119		$119,396		$115,908		$133,951		$148,224		$165,938		$161,619		$1,561,156
2b Sell money		$111,882		$126,129		$113,811		$131,518		$103,953		$125,174		$118,893		$114,742		$131,649		$143,433		$163,285		$165,541		$1,550,011
2c Total		$226,774		$254,432		$230,237		$261,493		$206,358		$249,294		$238,290		$230,650		$265,601		$291,657		$329,223		$327,160		$3,111,167
#3 - Trade value at Daily VWAP
3a Buy value		$114,824		$128,262		$116,395		$129,887		$102,374		$124,109		$119,426		$115,916		$133,917		$148,162		$165,825		$161,534		$1,560,631
3b Sell value		$111,883		$126,175		$113,855		$131,510		$103,980		$125,212		$118,981		$114,806		$131,705		$143,451		$163,313		$165,602		$1,550,471
3c Total		$226,707		$254,438		$230,250		$261,397		$206,353		$249,321		$238,407		$230,722		$265,622		$291,612		$329,138		$327,135		$3,111,102
#4 - Total trade expense, including commissions and fees, relative to Daily VWAP
4a Buys (2a-3a)		$68.3		$40.3		$30.5		$88.2		$31.3		$9.9		($30.0)		($8.3)		$34.2		$62.5		$113.3		$85.1		$525.4
4b Sells (3b-2b)		$1.4		$46.2		$44.2		($8.0)		$26.6		$37.2		$87.3		$63.8		$55.2		$18.0		$28.0		$60.7		$460.6
4c Total trade expense		$69.7		$86.5		$74.7		$80.2		$57.9		$47.2		$57.3		$55.6		$89.4		$80.5		$141.3		$145.8		$985.9
Trade expense as percentage of trade money
4c/2c		0.031%		0.034%		0.032%		0.031%		0.028%		0.019%		0.024%		0.024%		0.034%		0.028%		0.043%		0.045%		0.032%
#5 - Trade expense categories
5a Total commissions & fees		$23.4		$22.7		$20.7		$23.6		$18.3		$21.5		$21.1		$21.8		$23.4		$23.7		$29.2		$28.8		$278.2
5b Execution cost (4c-5a)		$46.3		$63.8		$54.0		$56.6		$39.5		$25.7		$36.2		$33.7		$66.0		$56.7		$112.1		$117.0		$707.6
#6 - Trade expense categories as percentage of trade money
Total commissions & fees (5a/2c)		0.011%		0.009%		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)		0.020%		0.025%		0.023%		0.022%		0.019%		0.010%		0.015%		0.015%		0.025%		0.019%		0.034%		0.036%		0.023%
Net Expense to IB Clients		0.031%		0.034%		0.032%		0.031%		0.028%		0.019%		0.024%		0.024%		0.034%		0.028%		0.043%		0.045%		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. 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/20240501005924/en/

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

Source: Interactive Brokers Group, Inc.

FAQ

What were the Daily Average Revenue Trades (DARTs) for Interactive Brokers in April 2024?

Interactive Brokers reported 2.339 million DARTs for April 2024, which were 33% higher than the previous year.

What was the client equity for Interactive Brokers in April 2024?

Interactive Brokers' client equity reached $457.8 billion in April 2024, showing a 34% increase year-over-year.

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

Interactive Brokers had 2.81 million client accounts in April 2024, reflecting a 26% increase from the previous year.

What was the average commission per cleared Commissionable Order for Interactive Brokers in April 2024?

The average commission per cleared Commissionable Order for Interactive Brokers in April 2024 was $3.00, including exchange, clearing, and regulatory fees.

What was the trade expense relative to Daily VWAP for IBKR PRO clients in April 2024?

IBKR PRO clients' trade expense relative to Daily VWAP was about 4.5 basis points in April 2024.