Interactive Brokers Group Inc.
) Electronic Brokerage segment announced a decline in brokerage
metrics for the month of August. The segment clears and settles
trades globally for both individual and institutional clients.
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Total customer Daily Average Revenue Trades (DARTs) declined 35.3%
from August 2011 and 13.4% from July 2012 to 356,000. However,
total customer accounts improved 12.2% from the prior-year month
and 1.0% from the prior month to 203,600.
Interactive recorded Cleared Customer DARTs of 339,000, declining
33.1% from August 2011 and 11.5% from July 2012. Further, on an
annualized basis, the company reported Cleared Average DART per
customer account of 420,000, plunging 41% from 712,000 in the
comparable month last year and 12.3% from 479,000 in the previous
Moreover, Interactive's total options contracts plummeted 43.6%
from the prior-year month and 2.3% from the prior month to 19,544
in the month under review. The company's futures contracts totaled
7,223, decreasing 34.2% from 10,975 in August 2011, but rising 3.5%
from 6,982 in July 2011.
Interactive also reported period-end statistics for customer
equity, customer credit balances and customer margin loan balances.
For the period ended August 2012, customer equity stood at $30.4
billion, augmenting 20.2% year over year and 4.1% sequentially.
Additionally, Interactive's Electronic Brokerage segment recorded
customer credit balances of $19.4 billion in the month, increasing
16.2% year over year and 3.7% sequentially. However, the company's
customer margin loan balances of $8.8 billion at August 2012-end
jumped 18.9% from $7.4 billion at August 2011-end, and 2.3% from
$8.6 billion at July 2012-end.
Lower trading activities and fluctuating interest rates are
expected to continuously impact the company's financials in the
near term. In addition, the company's dependence on IBG LLC and its
wide international exposure make us apprehensive. However, we are
impressed with Interactive's better-than-peer positioning,
technological excellence, stable balance sheet and robust capital
One of Interactive's peers -
Knight Capital Group, Inc
) is expected to announce its August metrics in mid-September.
Currently, Interactive retains a Zacks #5 Rank, which translates
into a short-term Strong Sell rating.