The broker believes the anticipated losses will not have a material effect on its financial condition.
With US oil prices plunging into negative territory for the first time in history on Monday, and again on Tuesday, Interactive Brokers has suffered an aggregate provisionary loss of approximately $88 million, the company announced on Tuesday.
As Finance Magnates reported, on Monday, WTI futures (West Texas Intermediate) for May, which expired on Tuesday, settled at USD -37.63 on Monday this week, falling USD 55.90, and even sinking as low as USD -40.32. For the second time in the week on Tuesday, WTI futures fell back below zero.
This price was the basis for determining the Settlement price for cash-settled contracts traded on the CME Globex and also on a separate expiring cash-settled futures contract which was listed on the Intercontinental Exchange Europe (ICE Europe)
According to a statement published by Interactive Brokers Group, Inc, several of its customers held long positions in these CME and ICE Europe contracts, and following the historical price drop, they incurred losses in excess of the equity in their accounts.
Following this, the US-based brokerage firm fulfilled its required variation margin settlements with the respective clearinghouses on behalf of its customers, which has put the company out of pocket around $88 million.
However, the US company has said in its statement yesterday that it believes the anticipated losses will not have a material effect on its financial condition.
Interactive Brokers: there’s another $500bln in losses out there
In an interview with CNBC, Thomas Peterffy, founder and chairman of Interactive Brokers said: "we had around 15% of the open interest in the May oil contract.” This indicates that other brokers have suffered even more dramatic losses than Interactive Brokers, as the rest of the open interest faces losses, adding "we are going to have to learn to cope with negative futures prices."
Furthermore, when asked by CNBC whether there is going to be some serious pain across the industry regarding the oil futures, Peterffy replied: "There is about another half a billion dollars of losses that somebody is sitting on... and I do not know who those folks are."
Revenues miss forecasts
On Tuesday, the brokerage firm also published its financial results for the first quarter of 2020 ended March 31, 2020. During the three-month period, the company recorded adjusting earnings per share of 69 cents, which is higher than market forecasts of 68 cents and is higher year-on-year from the 55 cents reported in Q1 2019.
Adjusted revenue, however, did not look as strong for the firm, coming in at $581 million. Although this represents an increase of 24.1 per cent year-on-year, up from $468 million from the prior-year period, nonetheless, it is lower than the $582.4 million consensus.
With US oil prices plunging into negative territory for the first time in history on Monday, and again on Tuesday, Interactive Brokers has suffered an aggregate provisionary loss of approximately $88 million, the company announced on Tuesday.
As Finance Magnates reported, on Monday, WTI futures (West Texas Intermediate) for May, which expired on Tuesday, settled at USD -37.63 on Monday this week, falling USD 55.90, and even sinking as low as USD -40.32. For the second time in the week on Tuesday, WTI futures fell back below zero.
This price was the basis for determining the Settlement price for cash-settled contracts traded on the CME Globex and also on a separate expiring cash-settled futures contract which was listed on the Intercontinental Exchange Europe (ICE Europe)
According to a statement published by Interactive Brokers Group, Inc, several of its customers held long positions in these CME and ICE Europe contracts, and following the historical price drop, they incurred losses in excess of the equity in their accounts.
Following this, the US-based brokerage firm fulfilled its required variation margin settlements with the respective clearinghouses on behalf of its customers, which has put the company out of pocket around $88 million.
However, the US company has said in its statement yesterday that it believes the anticipated losses will not have a material effect on its financial condition.
Interactive Brokers: there’s another $500bln in losses out there
In an interview with CNBC, Thomas Peterffy, founder and chairman of Interactive Brokers said: "we had around 15% of the open interest in the May oil contract.” This indicates that other brokers have suffered even more dramatic losses than Interactive Brokers, as the rest of the open interest faces losses, adding "we are going to have to learn to cope with negative futures prices."
Furthermore, when asked by CNBC whether there is going to be some serious pain across the industry regarding the oil futures, Peterffy replied: "There is about another half a billion dollars of losses that somebody is sitting on... and I do not know who those folks are."
Revenues miss forecasts
On Tuesday, the brokerage firm also published its financial results for the first quarter of 2020 ended March 31, 2020. During the three-month period, the company recorded adjusting earnings per share of 69 cents, which is higher than market forecasts of 68 cents and is higher year-on-year from the 55 cents reported in Q1 2019.
Adjusted revenue, however, did not look as strong for the firm, coming in at $581 million. Although this represents an increase of 24.1 per cent year-on-year, up from $468 million from the prior-year period, nonetheless, it is lower than the $582.4 million consensus.
Institutional FX Demand Continues to Climb in April
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.
Don't miss out on this 5-second invite packed with energy and urgency!
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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
📣 Stay updated with the latest in finance and trading!
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
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
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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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.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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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
Register now to secure your spot: https://bit.ly/3JbUpCK
#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
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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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