Despite a multitude of trading incentives that online brokers introduced over the past two months, including commission-free trading and fractional shares, monthly volumes are struggling for any real traction.
Interactive Brokers LLC (NASDAQ:IBKR) today reported its lowest DARTs since August 2018, which came in at 771,000 in December. This figure was lower by six percent month-over-month from 822,000 in November 2019. On a year-on-year basis, the electronic brokerage firm saw a bleaker performance in its DARTs, with December’s figure dropping 16 percent relative to over 953,000 transactions reported in 2018.
The data shows that the trend of rising accounts number is still in play, though volumes were interrupted. It is not clear whether that will be enough to preserve the revenue growth after the listed discount broker reported higher earnings for the three months through September 2019.
A total of 690,000 customer accounts were active at IB during December, up one percent month-on-month, and was also 15 percent higher year-on-year.
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In terms of equity balance in customers’ accounts during December 2019, the figure totaled $174.1 billion, up by four percent on a monthly basis from the previous month and also notched a 36 percent advance relative to the figures of the prior year.
On average, in December 2019, Interactive Brokers charged clients commission fees of $3.79 per order, including exchange, clearing and regulatory fees, with the key products metrics coming out at $2.39 for stocks, $5.53 for equity options and $6.05 for futures orders.
The Greenwich, Connecticut-based company has recently offered investors the ability to buy and sell fractional shares of almost any US stock. Charles Schwab was the first among US major brokers to roll out the fractional trading, where the brokerage buys the stock and trades fractions of the equity to end clients.
Earlier in December, 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 month. Low-fee pioneer and investors-owned Vanguard was the latest to join the crowd by dropping stock and options trading fees to zero.