Interactive Reports Improved DARTs - Analyst Blog


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Interactive Brokers Group Inc. 's ( IBKR ) Electronic Brokerage segment has announced its monthly brokerage data for February 2012. The segment under review clears and settles trades globally for both individual and institutional clients.

Interactive's total customer accounts for February were 192,200, up 17% from 164,200 in February 2011 and 1% from 190,600 in January 2012. Moreover, total customer Daily Average Revenue Trades (DARTs) rose 5% from the prior-year month and 7% from the prior month to 449,000.

Further, during February, Interactive recorded increased Cleared Customer DARTs of 410,000 compared with 388,000 in February 2011 and 381,000 in January 2012. On an annualized basis, the company reported Cleared Average DART per customer account of 537,000, down from 601,000 in the comparable month last year, but up from 504,000 recorded in the previous month.

Interactive's total options contracts fell 6% from the prior-year month to 20,363 in February 2012, but remained at par with the prior month. However, during the reported month, the company's futures contracts totaled 6,164, rising 2% from 6,018 in the year-ago month and 5% from 5,847 in the previous month.

Interactive also released period-end statistics for customer equity, customer credit balances and customer margin loan balances. For the period ended February 2012, customer equity stood at $28.3 billion, growing 18% year over year and 4% sequentially.

Additionally, Interactive's Electronic Brokerage segment recorded customer margin loan balances of $8.2 billion in the reported month, increasing marginally by 1% year over year and rising substantially by 11% sequentially. The company's customer credit balances of $18.8 billion at February 2012-end jumped 19% from $15.8 billion at February 2011-end and grew 7% from $17.6 billion at January 2012-end.

Though Interactive's fundamentals remain strong with a liquid balance sheet, sturdy capital base and high barriers to entry, we are concerned about the Market Making segment's ability to consistently generate sufficient returns for funding the dividend payments. Continued strong performance of Interactive's brokerage business and the restoring of quarterly dividend were quite impressive. However, its dependence on IBG LLC and its wide international exposure is a matter of trepidation.

Currently, Interactive retains a Zacks #3 Rank (a short-term 'Hold' rating). Similarly, one of its peers, Knight Capital Group Inc. ( KCG ) retains a Zacks # 3 Rank.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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