Interactive Brokers reports weakest trading volume in 2 years
Despite a multitude of trading incentives that Interactive Brokers LLC (NASDAQ:IBKR) introduced over the past few years, including commission-free trading and fractional shares, monthly volumes are struggling for any real traction.
IBKR today reported its lowest DARTs since October 2020, which came in at 2.01 million transactions in June. That compares to 2.29 million daily average revenue trades, or DARTS, in May 2022, down 12 percent on a monthly basis. On a year-on-year scale, the electronic brokerage firm saw an 18 percent increase relative to June 2021’s metrics.
A total of 1.92 million customer accounts were active at IBKR during June 2022, up two percent month-on-month, and was also 36 percent higher year-on-year. At this pace, Interactive Brokers is set to cross the two million milestone for the first time in the company’s 44-year history.
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 after the listed discount broker reported lower earnings for the three months through March 2021.
Ranked as the largest US electronic broker by some measures, Interactive Brokers’ first-quarter adjusted revenues dropped 27 percent year-over-year, to $645 million compared to $893 million in Q1 2021.
In terms of margin loans in customers’ accounts during June 2022, the figure totaled $42.6 billion, down by four percent on a monthly basis from May and was also lower by 13 percent relative to the figures of the prior year.
IBKR had a busy month
The Greenwich, Connecticut-based company also revealed that on average it charged clients commission fees of $2.96 per order. This figure includes exchange, clearing and regulatory fees, with the key product metrics coming out at $2.18 for stocks, $3.98 for equity options and $3.80 for futures orders.
Interactive Brokers is among few platforms seeing such sluggish performance this year as most of its publicly traded rivals and retail platforms had doubled trading volume from their 2021 totals.
Interactive Brokers had been in the news over the past few weeks. In May, the company rolled out the fractional trading feature for European stocks and ETFs, three years after its initial launch for US securities back in 2019.
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.
TradingView also integrated the US-listed brokerage firm as the latest online trading partner. Interactive Brokers traders will now have direct access to TradingView from their own accounts, which yields many benefits for users in the form of an integrated trading terminal and other suites of tools. With the soft launch, investors will have the ability to trade futures and stocks, with more asset classes launching soon.