Interactive Brokers’ client activity drops 30% YoY

abdelaziz Fathi

Interactive Brokers LLC (NASDAQ:IBKR) saw 1.95 million daily average revenue trades, or DARTS, in November 2022 compared to 1.96 million transactions in the prior month.

This figure is lower by nearly a third on a yearly basis, and the listed broker had seen this metric also down by 1 percent relative to its October counterpart. It was also the lowest reading for IBKR’s monthly turnover since July.

Interactive Brokers is hardly the only platform seeing such sluggish performance this year as most of its publicly traded rivals have increased their trading volume from their 2021’s totals.

Although most US brokers now offer commission-free trades on almost all Exchange-traded products, the so-called DARTs are still a key brokerage industry standard for measuring their clients’ activity.

A total of 2.065 million customer accounts were active at IBKR during November 2022, up one percent month-on-month, and was also 26 percent higher year-on-year.

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 support the revenue growth in the fourth quarter after the listed discount broker reported solid earnings for the three months through September 2021.

IBKR had a busy month

Ranked as the largest US electronic broker by some measures, Interactive Brokers’ third-quarter adjusted revenues rose 30 percent year-over-year, to $847 million compared to $650 million in Q3 2021.

On an adjusted basis, income before tax totaled $580 million, up 38 percent year-over-year from $420 million in the previous year. Diluted earnings per share came in at $1.08 for this quarter compared to $0.78 in Q3 2021.

In terms of margin loans in customers’ accounts during November 2022, the figure totaled $39.2 billion, down by one percent on a monthly basis from October and was also lower by 28 percent relative to the figures of the prior year.

The Greenwich, Connecticut-based company also revealed that on average it charged clients commission fees of $3.19 per order. This figure includes exchange, clearing and regulatory fees, with the key product metrics coming out at $2.23 for stocks, $4.56 for equity options and $3.89 for futures orders.

Interactive Brokers had been in the news over the past few weeks. Most recently, it joined a group of thirteen firms that bought minority equity interests in the Cboe Digital business. Their equity ownership will allow them to directly benefit from the growth of Cboe Digital and close strategic and commercial alignment. Investor partners join a roster of commercial partner firms supporting the Cboe Digital business.

 

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