Interactive Brokers becomes a pioneer as the first company listing on an anti-HFT exchange
The founder, chairman, and CEO of Interactive Brokers, Thomas Peterffy, is about to make history. The brokerage house he founded in 1977 is becoming the inaugural listing on the IEX Exchange .
The move to delist Interactive Brokers from NASDAQ and list it on IEX could mark the beginning of a new era. Since its inception in 2013, IEX has earned a reputation as the first anti-high-frequency trading venue as trading on the exchange is executed via a specially designed routing mechanism that prevents front-running
IEX came to fame in 2014, when financial writer Michael Lewis made the trading venue and its co-founder Brad Katsuyama the focus of his book about high-frequency trading ‘Flash Boys.’
Interactive Brokers meanwhile, is widely acclaimed as one of the most reputable brokers in the world. The firm was the first discount brokerage company to open access to the markets for smaller investors.
Peterffy, who amassed a fortune of $22.5 billion, has been among the revolutionaries in the industry and his latest move represents a major commitment to continue innovating.
Mr. Peterffy was kind enough to share some exclusive details on Interactive Brokers' listing on IEX with Finance Magnates.
'It’s All About Education'
Asked about the main reason for the move made by Interactive Brokers, the company’s CEO explained: “Trading volumes on the IEX are growing and they are providing better Execution prices for their customers. The unique order types IEX has are at the core of our decision to move our listing there.”
Peterffy also shared that he wanted the company’s shareholders to receive the benefit of better execution prices.
“We have been routing orders to the IEX for some time now. If the exchange succeeds this would only benefit our customers," he said. "We do not accept payment for customers’ orders and since their execution prices are better when compared to other exchanges, we would like to execute more flow there. The owners of our shares will also benefit.”
Asked if he thinks that a movement against high-frequency traders can succeed, Peterffy shared: “It’s all about education. If people are aware that there is a venue where their orders can get executed at better rates, they will naturally move their business to that venue.”
“HFT’s are buying order flow from many brokerages, which are keen to maintain the status quo. As long as end-customers are aware of the existence of a marketplace where their orders can get better fills, the market will change and the business of HFTs will decline.”
The proprietary order types which IEX offers its clients are at the core of the exchange’s success.
Interactive Brokers itself has a SmartRouting system that automatically searches for the best price and routes trades there. Clients can override these recommendations if they want their trades executed at a specific exchange.
Continuing HFT Debate
By joining IEX, Interactive Brokers is setting itself up against major competitors, including zero-commission trading app Robinhood.
A recent SEC filing by the mobile app-centric intermediary confirmed some rumors that Robinhood had been selling flow to HFT firms for prices which might be much higher than its competition.
In an article on Seeking Alpha, analyst Logan Kane pointed out that Robinhood has been compensated on a per dollar and not per share basis as its peers.
According to Kane's article, public filings reveal that brokers like TD Ameritrade and E*TRADE get about $22 per $1,000,000 traded. Robinhood, on the other hand, gets paid about $260 from the same leaders in the HFT space, like Citadel, Virtu, and Two Sigma.
A debate which has been around since the launch of Robinhood is now heating up. Is the company really that interested in providing a zero-commission service to its clients?
In any case, the listing of Interactive Brokers on IEX could mark a new era for the brokerage industry and the broader stock market overall. Provided that the share prices of Interactive Brokers remain well bid, the company's move could be followed by many others soon.
In Thursday's trading, the share price of the company reversed Wednesday's decline and is currently priced three percent higher.
The founder, chairman, and CEO of Interactive Brokers, Thomas Peterffy, is about to make history. The brokerage house he founded in 1977 is becoming the inaugural listing on the IEX Exchange .
The move to delist Interactive Brokers from NASDAQ and list it on IEX could mark the beginning of a new era. Since its inception in 2013, IEX has earned a reputation as the first anti-high-frequency trading venue as trading on the exchange is executed via a specially designed routing mechanism that prevents front-running
IEX came to fame in 2014, when financial writer Michael Lewis made the trading venue and its co-founder Brad Katsuyama the focus of his book about high-frequency trading ‘Flash Boys.’
Interactive Brokers meanwhile, is widely acclaimed as one of the most reputable brokers in the world. The firm was the first discount brokerage company to open access to the markets for smaller investors.
Peterffy, who amassed a fortune of $22.5 billion, has been among the revolutionaries in the industry and his latest move represents a major commitment to continue innovating.
Mr. Peterffy was kind enough to share some exclusive details on Interactive Brokers' listing on IEX with Finance Magnates.
'It’s All About Education'
Asked about the main reason for the move made by Interactive Brokers, the company’s CEO explained: “Trading volumes on the IEX are growing and they are providing better Execution prices for their customers. The unique order types IEX has are at the core of our decision to move our listing there.”
Peterffy also shared that he wanted the company’s shareholders to receive the benefit of better execution prices.
“We have been routing orders to the IEX for some time now. If the exchange succeeds this would only benefit our customers," he said. "We do not accept payment for customers’ orders and since their execution prices are better when compared to other exchanges, we would like to execute more flow there. The owners of our shares will also benefit.”
Asked if he thinks that a movement against high-frequency traders can succeed, Peterffy shared: “It’s all about education. If people are aware that there is a venue where their orders can get executed at better rates, they will naturally move their business to that venue.”
“HFT’s are buying order flow from many brokerages, which are keen to maintain the status quo. As long as end-customers are aware of the existence of a marketplace where their orders can get better fills, the market will change and the business of HFTs will decline.”
The proprietary order types which IEX offers its clients are at the core of the exchange’s success.
Interactive Brokers itself has a SmartRouting system that automatically searches for the best price and routes trades there. Clients can override these recommendations if they want their trades executed at a specific exchange.
Continuing HFT Debate
By joining IEX, Interactive Brokers is setting itself up against major competitors, including zero-commission trading app Robinhood.
A recent SEC filing by the mobile app-centric intermediary confirmed some rumors that Robinhood had been selling flow to HFT firms for prices which might be much higher than its competition.
In an article on Seeking Alpha, analyst Logan Kane pointed out that Robinhood has been compensated on a per dollar and not per share basis as its peers.
According to Kane's article, public filings reveal that brokers like TD Ameritrade and E*TRADE get about $22 per $1,000,000 traded. Robinhood, on the other hand, gets paid about $260 from the same leaders in the HFT space, like Citadel, Virtu, and Two Sigma.
A debate which has been around since the launch of Robinhood is now heating up. Is the company really that interested in providing a zero-commission service to its clients?
In any case, the listing of Interactive Brokers on IEX could mark a new era for the brokerage industry and the broader stock market overall. Provided that the share prices of Interactive Brokers remain well bid, the company's move could be followed by many others soon.
In Thursday's trading, the share price of the company reversed Wednesday's decline and is currently priced three percent higher.
58% of UK Investors Choose Professional Guidance over 'Finfluencers’
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
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#fmas #fmas24 #fmevents #networking #finance #africa
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
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#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
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Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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