Interactive Brokers’ client base surges past 2.5 million
Interactive Brokers LLC (NASDAQ:IBKR) saw 1.89 million daily average revenue trades, or DARTS, in November 2023 compared to 1.93 million transactions in the prior month. The figure is three percent lower on a yearly basis, and also dropped slightly from a month earlier.
In terms of equity balance in customers’ accounts during November 2023, the figure totaled $404.3 billion, higher by 27 percent on a yearly basis. Interactive Brokers also managed to beat its October equivalent, having notched a 10 percent increase relative to $367 billion the prior month.
Elsewhere, the discount brokerage has won more than 42,000 new accounts. November’s active accounts increased to 2.52 million, or 2 percent higher than in October and 22 percent above the previous year’s figure.
The Greenwich, Connecticut-based company also revealed that on average it charged clients commission fees of $3.21 per order compared to $3.09 in October. This figure includes exchange, clearing and regulatory fees, with the key product metrics coming out at $2.04 for stocks, $4.28 for equity options and $4.80 for futures orders.
Interactive Brokers made headlines recently following the launch of its fractional trading feature for Canadian stocks and ETFs. The discount broker has also won regulatory approval from the Financial Conduct Authority (FCA), allowing it to continue serving UK-based customers.
Traders using Interactive Brokers can now trade fractional shares of all stocks and ETFs listed on the Toronto Stock Exchange and on CBOE Canada, plus eligible US and European stocks and ETFs.
The move, geared toward attracting more young clients, eliminates the barriers that many investors face when trying to invest in a diversified portfolio of listed securities. Fractional share trading allows investors to diversify their investment portfolios by spreading their relatively small capital over a broader range of stocks.
Interactive Brokers posted a remarkable 52% increase in Q2 revenue from the previous year while decreasing slightly by 2% on a quarterly basis. Revenue surged to $1 billion, up from $656 million a year ago, but was down when weighed against $1.04 billion in the first quarter.
This growth in revenue was largely led by a doubling of net interest income, reaching $694 million. Interactive Brokers’ low-duration investment portfolio strategy proved beneficial in the high-rate environment, offsetting flat commission revenue compared to the previous year. IBKR’s commission business was muted due to higher operating expenses and lower customer stock trading volume.