Interactive Brokers reports strong volumes for second consecutive month

Electronic brokerage firm Interactive Brokers LLC (NASDAQ:IBKR) said its trading volumes rose in February, an indication that investor confidence in the financial markets is rebounding after having been fairly mixed over the past few months.

More buyers came into the market last month amid recent stock gains that have been driven by hope that the Federal Reserve would ease off its aggressive tightening campaign.

Trading was the busiest since June 2022, with more than 2.12 million transactions changing hands, up 7 percent from 1.98 million transactions in the month of January. Over a year-on-year basis, however, Interactive Brokers saw a large drop in its DARTs with February’s figure down by 15 percent relative to 2.5 million reported in February 2022.

In terms of equity balance in customers’ accounts during February 2023, the figure totaled $331.6 billion, down by 5 percent on a yearly basis. Interactive Brokers also failed to beat its January equivalent, having notched a 2 percent decrease relative to $338 billion the prior month.

Elsewhere, the discount brokerage has won more than 32,700 new accounts. February’s active accounts increased to 2.16 million, or 2 percent higher than in January and 22 percent above the previous year’s figure of 1.72 million ‎accounts.

The Greenwich, Connecticut-based company also revealed that on average it charged clients commission fees of $3.12 per order compared to $3.11 in January. This figure includes exchange, clearing and regulatory fees, with the key product metrics coming out at $2.12 for stocks, $4.62 for equity options and $3.95 for futures orders.

Interactive Brokers made headlines recently following the launch of low-fee cryptocurrency trading for professional investors in Hong Kong, making it the latest by the discount broker to expand the reach of its digital asset offering.

Interactive Brokers also reported last month its largest-ever quarterly profit, buoyed by a favorable interest rate environment and an increasing user base.

The discount broker posted strong fourth-quarter earnings led by a recovery in interest income and its investment in Tiger Brokers. However, IBKR’s commission revenue was muted due to higher operating expenses and lower customer stock trading volume.

Despite headwinds from a push to no-fee trading, Interactive Brokers’ commission revenue increased 3 percent from the year-ago quarter to $331 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.