Interactive Brokers reports flat metrics for monthly turnover

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.

During October 2022, the number of DARTs was reported at 1.965 million transactions, virtually unchanged from the month of September. Over a year-on-year basis, Interactive Brokers saw a notable drop in its DARTs with October’s figure down by 15 percent relative to 2.03 million reported in October 2021.

In terms of equity balance in customers’ accounts during October 2022, the figure totaled $297 billion, down by 22 percent on a yearly basis. Interactive Brokers managed to best its September equivalent, having notched a three percent increase relative to the prior month.

Elsewhere, the discount brokerage has won more than 27,000 new accounts as volatile markets had revived interest from retail investors. October’s active accounts increased to 2.04 million, or 1 percent higher from September and 29 percent above the previous year’s figure of 1.49 million ‎accounts.

The Greenwich, Connecticut-based company also revealed that on average it charged clients commission fees of $3.09 per order. This figure includes exchange, clearing and regulatory fees, with the key product metrics coming out at $2.07 for stocks, $4.56 for equity options and $3.66 for futures orders.

Interactive Brokers reported last month its third-quarter earnings that came above analysts’ expectations as the longtime leader in low-cost trading made progress in a couple of key areas, thanks to choppy markets and rising rates.

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.

Despite headwinds from a push to no-fee trading, Interactive Brokers’ commission revenue increased 3 percent from the year-ago quarter to $320 million. The growth was attributed to customer’s futures trading volume and higher options commission per contract. However, the figure was tempered partially by lower stock volume.

The upbeat results for the quarter were also driven by strong interest revenue, which jumped to $473 million, or 73 percent on a yearly basis. This was due to a decline in higher benchmark interest rates and customer credit balances, partially offset by a decline in margin lending balances.