Trading volumes at US firm Interactive Brokers LLC (NASDAQ:IBKR) surged in March to ‘shocking’ highs after fears over the impact of the spreading coronavirus sent almost all tradable assets reeling.
The electronic brokerage segment at Interactive Brokers, which deals with clearance and settlement of trades for individual and institutional clients globally, experienced a rush of activity with volumes rising by 128 percent year-over-year and nearly 50 percent on a monthly basis. The company hit a new record high for Daily Average Revenue Trades (DARTs) at 1.96 million, surpassing the previous record it set only last month at 1.35 million transactions.
March was the busiest trading month on record in the US, with almost all big brokers and major exchanges feeling intense on a huge turnover that was only seen in the depths of the financial crisis in October 2008. The rapid shifts resulted in record volumes in almost all exchange-traded products.
Reflecting its recent restrictions on borrowed margins, Interactive Brokers’ ending client margin loan balances fell to less than $20 billion in March 2020, lower by 22 percent than the prior year and also reducing clients’ exposure by a third when compared to February.
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IB charges lower commissions
In terms of equity balance in customers’ accounts during March 2020, the figure totaled $160.7 billion, up nine percent on a yearly basis from $147.6 billion the previous year. However, Interactive Brokers failed to best its February equivalent, having notched a six percent drop relative to $170.1 billion in the prior month.
IB’s customers accounts also surged by 22 percent from a year earlier, coming in at 760,000 in March. This figure is also higher by six percent from February 2020 and reflects a notable jump from mild, but steady increases over the last months, which have been hovering around one to two percent.
But while volumes were buzzing in March, Interactive Brokers charged clients lower commission fees, namely $2.97 per order on average. This is nearly 16 percent below the $3.67 per order it collected in February. The figure includes exchange, clearing, and regulatory fees, with the key product metrics coming out at $2.19 for stocks, $4.38 for equity options, and $4.27 for futures orders.
Earlier in October, Interactive Brokers cut trading commissions to zero, setting off a war among brokerages that led almost all competitors to drop fees on virtually the entire exchange-traded products later in the next months.