Trading activity at Interactive Brokers LLC (NASDAQ:IBKR) lost momentum in February 2022, with volumes declining month-over-month after strong gains in January.
The DART count, an industry standard measure, was reported at 2.5 million transactions. This is down 32% year-on-year from the 3.7 million reported in the same month last year. Month-over-month, Interactive Brokers saw a similar negative trend in its DARTs, with February’s figure down 5% from nearly 2.62 million trades the year before.
Interactive Brokers, whose two main divisions were online brokerage and market making before ceasing the latter, gained more customers, with February’s total active accounts reaching 1.76 million. That’s 2% more than the previous month’s 1.72 million accounts. The figure increased by 39% year-on-year compared to February 2021 (1.26 million).
Interactive Brokers is apparently continuing to ease restrictions on borrowed margins, which were tightened last year amid fears about the impact of the spread of the coronavirus on its traders’ betting. The company’s customers’ ending margin loan balances were approximately $49.2 billion in February 2022. This figure was up 17% from $42 billion in 2021, but was slightly lower than the last month.
IBKR Reports Steady Revenue Commissions Despite Free Trading
On average, in February 2022, Interactive Brokers charged clients a commission fee of $2.51 per order, compared to $2.47 in January. This figure includes foreign exchange, clearing and regulatory fees, revenue key indicators of $1.73 for stocks, $3.44 for stock options and $3.79 for futures orders .
Despite headwinds from a push to fee-free trading and historically low interest rates, Interactive Brokers’ commission revenue increased by $32 million in the fourth quarter, or 11% over the same period last year. This optimistic figure was attributed to higher client trading volumes in the stock and options markets, as well as a higher average commission per share on stocks.
Results for the quarter were also driven by strong growth in interest income, which increased by $70 million, or 31%, on an annual basis. The increase was supported by higher margin loan balances and strong securities lending activity. However, this was offset by lower revenues from the “other revenues” segment, which decreased by $104 million.
In addition to its core electronic brokerage business, IB’s revenue for the October-December quarter included an $89 million mark-to-market loss from its stake in Chinese brokerage Up Fintech (Tiger Brokers) and $10 million dollars related to its currency diversification strategy. .