Interactive Brokers Shares Hit Record Highs as Traders Back Business Model
- Interactive Brokers shares are up over 45% on the year as traders believe in the firm's long-term fortunes of market share growth.
During their Q1 conference call with shareholders and analysts, Interactive Brokers (IB) painted a rosy picture for the future. Speaking on the call, IB CEO Thomas Peterffy highlighted how the broker was chosen by Scottrade to support a number of their high net worth clients. In addition, he revealed that they had purchased social advisory firm, Covestor, and that plans for adding new platforms to appeal to a broader range of clients were in the advanced development phases.
Peterffy also stated that events such as the Swiss franc Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term of January and overall decrease of risk taking by prime brokers had led IB to become an alternative for small brokers and hedge funds for their trading clearing needs. As such, despite realizing a $121 million loss from the January move in the franc, the overall market trends it caused were presented as beneficial to IB.
So far, traders and investors appear to be buying into Peterffy’s views of the future. After setting another all-time record high yesterday at a closing price of $42.74, shares of IB have risen 46.6% in 2015. During the same period, Interactive Broker shares are also outperforming rival online brokers (see chart below).
Source: Yahoo Finance
Catering to a wide array of clients, IB has carved strong market share thanks to both offering deep discount trading, and arguably the largest selection of assets available to trade from one account. As a result, beyond individual investors who benefit from low commission rates, the firm has been able to attract asset managers and hedge funds who use IB to trade nearly every exchange-traded asset available on the globe.
Compared to prime brokers, what is missing from IB, is the ability for customers to source credit to trade directly with other counterparties or trading venues. As such, lacking this feature inhibits IB from attracting larger players who require personal relationships with investment banks to source shares in new stock offerings, customized currency Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term and off-exchange asset types. Nonetheless, with its volumes in 2015 ahead of 2014 levels, IB is showing that there is strong interest for its ‘plain vanilla’ low expense brokerage products.
During their Q1 conference call with shareholders and analysts, Interactive Brokers (IB) painted a rosy picture for the future. Speaking on the call, IB CEO Thomas Peterffy highlighted how the broker was chosen by Scottrade to support a number of their high net worth clients. In addition, he revealed that they had purchased social advisory firm, Covestor, and that plans for adding new platforms to appeal to a broader range of clients were in the advanced development phases.
Peterffy also stated that events such as the Swiss franc Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term of January and overall decrease of risk taking by prime brokers had led IB to become an alternative for small brokers and hedge funds for their trading clearing needs. As such, despite realizing a $121 million loss from the January move in the franc, the overall market trends it caused were presented as beneficial to IB.
So far, traders and investors appear to be buying into Peterffy’s views of the future. After setting another all-time record high yesterday at a closing price of $42.74, shares of IB have risen 46.6% in 2015. During the same period, Interactive Broker shares are also outperforming rival online brokers (see chart below).
Source: Yahoo Finance
Catering to a wide array of clients, IB has carved strong market share thanks to both offering deep discount trading, and arguably the largest selection of assets available to trade from one account. As a result, beyond individual investors who benefit from low commission rates, the firm has been able to attract asset managers and hedge funds who use IB to trade nearly every exchange-traded asset available on the globe.
Compared to prime brokers, what is missing from IB, is the ability for customers to source credit to trade directly with other counterparties or trading venues. As such, lacking this feature inhibits IB from attracting larger players who require personal relationships with investment banks to source shares in new stock offerings, customized currency Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term and off-exchange asset types. Nonetheless, with its volumes in 2015 ahead of 2014 levels, IB is showing that there is strong interest for its ‘plain vanilla’ low expense brokerage products.