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• OpenIPO
• Picking an Online Stock Broker
• IShares Russell MidCap Index Fund (IWR)
• IShares Russell MidCap Value Index Fund (IWS)

TOP CONTRIBUTORS

Andrew Horowitz

Zach Scheidt

IBKR AT A GLANCE

P/E ► 3.88 VERY LOW EV/EBITDA ► 3.63 VERY LOW ROA ► 0.6% AVG ROE ► 10.2% AVG Debt to Equity ► 46.4 VERY HIGH Current Ratio ► 0   Interest Coverage Ratio ► 7.43 AVG

 

 

 

 

 

 

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.

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.)

References