How Technology Is Helping Interactive Brokers Group



Helped by automated processes

On June 6, Interactive Brokers (IBKR) attended the Sandler O’Neill Global Exchange and Brokerage Conference, where it shared company insights. It stated that many of its top managers are software engineers. With the use of technology, it hopes to make trading easier and more efficient for customers.

Technology has helped the company costing-wise, allowing it to charge lower commission fees. Using digital tools could help brokers (VFH) such as Charles Schwab (SCHW), E*TRADE Financial (ETFC), and TD Ameritrade (AMTD) satisfy customers’ needs to access markets from their preferred location.

Breakdown of IBKR’s client base

Interactive Brokers reported that it had 517,000 brokerage accounts at the end of the first quarter. Of these accounts, 51% were held by individual traders and investors, whereas financial advisors, proprietary trading groups, hedge and mutual funds, and introducing brokers held 17%, 3%, 1%, and 28%, respectively.

At the end of the first quarter, Interactive Brokers had $129 billion in brokerage client equity. In the first quarter, the company garnered $220 million in commissions from its client base. Of this amount, 49% was from individual traders and investors, while financial advisors contributed 16%. Introducing brokers, hedge and mutual funds, and proprietary trading groups contributed 9%, 10%, and 16%, respectively.

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