Interactive Brokers Group (IBKR)

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See all Bulls Reasons Bulls: Reasons To Buy Strong growth, unconventional offer 100% agree Strong growth, unconventional offer The market environment in the first quarter was extremely beneficial to IBKR as disconnects in the financial area led to increased volume traded and at the same time, the spread on many contracts widened significantly due to the volatility. Interactive Brokers... read more View or Edit Reason 1 votes 100% agree Bears: Reasons To Sell Feeling Bearish? Be the first to explain why this would make a poor investment Send the authors a comment or suggestion Be the first to make a suggestion See All Suggestions

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• Electronic Trading

Interactive Brokers Group, Inc. is an automated global electronic market maker and broker specializing in routing orders, and executing and processing trades in securities, futures and foreign exchange instruments as a member of more than 60 electronic exchanges and trading venues around the world.

The term “traders” is used lightly as more often than not, the trades are executed electronically with little or no human intervention. Software is created to keep a tight grip on risk parameters so that there are very few unpleasant surprises that might be associated with a human trader taking too large of a position.

[edit] Business

The Company has two business segments, market making and electronic brokerage. As a market maker, IBG provides continuous bid and offer quotations on approximately 324,000 securities and futures products listed on electronic exchanges around the world.

IBG conducts its electronic brokerage business through its Interactive Brokers subsidiaries. As an electronic broker, the Company executes, clears and settles trades globally for both institutional and individual customers. In August 2007, IBG acquired the specialist operations of Kellogg Capital Group LLC on the American Stock Exchange.

IBKR does have a market making operation which helps to bring in revenue. Annually, revenue is primarily comprised of 1) trading gains 2) commissions/execution fees 3) interest income.

The company earned 66 cents a share compared to 31 cents for the first quarter last year which is good for an impressive 112.9% increase. Net revenues were $528.4 million which compares to $330.8 million last year. Despite the fact that the company is a brokerage by name, the majority of the income came through market making activities where traders make the firm money by offering liquidity to the market and taking advantage of the spread (difference between the bid and the ask price for financial instruments.)

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