Interactive Brokers’ fee-generating trades ease in July

abdelaziz Fathi

Trading activity at Interactive Brokers LLC (NASDAQ:IBKR) took a step back in July with volumes easing on a month-on-month basis following a rebound in June. This is a sign that trades continue to meaningfully consolidate despite the pandemic volatility over the summer.

During July 2021, the number of DARTs, a standard industry metric, were reported at 2.36 million transactions. This is a fall of five percent month-over-month from 2.47 million in June. On a year-over-year basis, Interactive Brokers saw a brighter performance in its DARTs with July’s figure up 32 percent relative to nearly 1.79 million transactions reported in the same month last year.

Though most US brokers now offer commission-free trades on almost all exchange-traded products, the so-called Daily Average Revenue Trades are still a key brokerage industry standard for measuring their clients’ activity.

Interactive Brokers, whose two main divisions were online brokerage and market-making before it ceased the latter in 2018, has won more clients, with the total for July’s active accounts up to 1.45 million. That is 2.8 percent higher from 1.41 million accounts for the previous month. The figure increased by 84 percent year-on-year when compared to July 2020 (‎912.700 ‎accounts).

Interactive Brokers seemingly tightens its grip on borrowed margins, which may have occurred amid fears over the impact of the spreading coronavirus on its traders’ bets. The company’s client margin loans were around $47.9 billion in July 2021 from $48.8 billion in June.

On average, Interactive Brokers charged clients commission fees of $2.38 per order in July. This figure includes exchange, clearing and regulatory fees, with the key products metrics coming out at $1.69 for stocks, $3.57 for equity options, and $4.05 for futures orders.

Ranked as the largest electronic broker in the US by some metrics, Interactive Brokers has been expanding its presence in Europe in 2021 as it continues to grow its international business. The discount broker  expects to expand its staffing substantially this year to accommodate its recently-established offices in Hungary and Ireland.

With the addition of its last branch, the Connecticut-based brokerage firm now has a physical presence in eleven entities globally.

While Interactive Brokers may be looking to grow its business outside of the US, the company also acquired a self-directed retail brokerage segment from online custodian, Folio Investing, in a push to expand its reach to Main Street investors.

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