Interactive Brokers Beats on Q3 Revenue as Tiger's Plunge Eases
- The results for the quarter were driven by strong growth in net interest income, which increased $47 million or 19 percent.
Interactive Brokers today reported increased revenue for the third quarter, as the longtime leader in low-cost trading made gains in a couple of key areas.
Ranked as the largest US electronic broker by some measures, Interactive Brokers’ third-quarter revenues rose six percent year-over-year, to $466 million compared to $439 million in Q3 2018 and $413 million in the second quarter. Income before tax totaled $281 million, almost unchanged year-over-year from $276 million, but up 23 percent QoQ from $225 million in the prior quarter.
The results for the quarter were driven by strong growth in net interest income, the company said in a statement, which increased $47 million, or 19 percent from a year ago. Commissions revenue also grew $20 million, or 12 percent, when weighed against the same period in 2018.
This was offset by lower other income, which decreased $40 million, and also a $47 million reversal on the company's currency diversification strategy, which swung from a $6 million loss in the second quarter and $24 million loss in the year-ago quarter.
Aside from its core electronic-brokerage business, the IB earnings for the second quarter included a mark-to-market loss of $13 million from its 7.7 percent stake in Tiger Brokers. This loss, however, reflects an improvement in the company’s float loss tied to the Chinese brokerage that raised $104 million from its IPO on Nasdaq exchange, which stood at $74 million in the second quarter.
IB initiates no-fee trading craze
Among other major indicators, Interactive Brokers’ saw a 13 percent year-over-year decrease in daily average revenue trades (DARTs) — amounting in the past quarter to about 859,000 transactions per day that generate commissions or fees.
This announcement comes on the heels of Interactive Brokers’ launch of the IBKR Lite, which routes trades through Market Makers Market Makers Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v rather than seeking best execution through its smart order router.
In doing so, the company plans to make money from order flows, a common tactic used by discount brokers to generate revenue by directing orders to certain trading venues.
Rivals such as Charles Schwab and TD Ameritrade also eliminated commissions for Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone of some stocks and funds.
Shares of US retail brokerage firms all traded down following these announcements, signaling that investors think these steps are squeezing their profitability.
Interactive Brokers today reported increased revenue for the third quarter, as the longtime leader in low-cost trading made gains in a couple of key areas.
Ranked as the largest US electronic broker by some measures, Interactive Brokers’ third-quarter revenues rose six percent year-over-year, to $466 million compared to $439 million in Q3 2018 and $413 million in the second quarter. Income before tax totaled $281 million, almost unchanged year-over-year from $276 million, but up 23 percent QoQ from $225 million in the prior quarter.
The results for the quarter were driven by strong growth in net interest income, the company said in a statement, which increased $47 million, or 19 percent from a year ago. Commissions revenue also grew $20 million, or 12 percent, when weighed against the same period in 2018.
This was offset by lower other income, which decreased $40 million, and also a $47 million reversal on the company's currency diversification strategy, which swung from a $6 million loss in the second quarter and $24 million loss in the year-ago quarter.
Aside from its core electronic-brokerage business, the IB earnings for the second quarter included a mark-to-market loss of $13 million from its 7.7 percent stake in Tiger Brokers. This loss, however, reflects an improvement in the company’s float loss tied to the Chinese brokerage that raised $104 million from its IPO on Nasdaq exchange, which stood at $74 million in the second quarter.
IB initiates no-fee trading craze
Among other major indicators, Interactive Brokers’ saw a 13 percent year-over-year decrease in daily average revenue trades (DARTs) — amounting in the past quarter to about 859,000 transactions per day that generate commissions or fees.
This announcement comes on the heels of Interactive Brokers’ launch of the IBKR Lite, which routes trades through Market Makers Market Makers Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v rather than seeking best execution through its smart order router.
In doing so, the company plans to make money from order flows, a common tactic used by discount brokers to generate revenue by directing orders to certain trading venues.
Rivals such as Charles Schwab and TD Ameritrade also eliminated commissions for Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone of some stocks and funds.
Shares of US retail brokerage firms all traded down following these announcements, signaling that investors think these steps are squeezing their profitability.