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Why Interactive Brokers Group’s Daily Average Revenue Trades Fell

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DARTs fell

In the second quarter, Interactive Broker Group (IBKR) is expected to witness a drop in its commission revenues sequentially due to a fall in its DARTs (daily average revenue trades). In May, Interactive Broker Group saw 780,000 DARTs—a fall of 4% month-over-month and a rise of 16% YoY (year-over-year). In April, Interactive Brokers Group reported 812,000 DARTs. E*TRADE (ETFC) reported 249,939 DARTs in April.

In May, equity markets witnessed some volatility due to trade war concerns. In the past month, Interactive Brokers Group returned -3.5%. During the same period, brokerage houses (VFH) Charles Schwab (SCHW) and TD Ameritrade (AMTD) returned 1.1% and 1.7%, respectively.

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Macro parameters

Equity markets are sensitive to global economic measures. Any downturn could accelerate the downtrend, which impacts investors’ sentiments. Equity markets are expected to witness volatility after President Trump meets with North Korea’s leader Kim Jong-un. The meeting is scheduled for June 12. Brokerages’ performances are also impacted by interest rate movements. In 2018, a rise in the rates would lead to a rise in the interest income.

At the end of May, Interactive Brokers Group reported total client equity of $134.5 billion, which implies a rise of 3% month-over-month and a rise of 31% YoY. The company has 533,000 client accounts—an increase of 1% month-over-month.

As of May, Interactive Brokers Group’s margin loan balances were $31 billion. The company’s average commission rate was $3.84 at the end of May, which reflects a marginal decline compared to April.

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