Interactive Brokers’ Q2 2016 DARTs, pre-tax income drop over the quarter

Interactive Brokers’ Q2 2016 DARTs, pre-tax income drop over the quarter

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US automated forex broker Interactive Brokers (NASDAQ GS: IBKR) reported that its Q2 2016 client Daily Average Revenue Trades (DARTs) (based on customer orders) for cleared and execution-only customers rose 5% over the year and reached an average of 648 000 per day. In Q2 cleared DARTs were 597 000, 6% higher than the same period last year.

For the same period the number of customer accounts rose 15% from the year-ago quarter to 357 000.

Customer equity in the quarter that ended on June 30, 2016 grew 12% from the same quarter of last year to $73.7 billion, while customer debits decreased by 21% to $15 billion.

According to the Interactive Brokers report, the Q2 2016 income of the electronic brokerage segment before taxes increased 2% compared to Q2 2015, to reach $191 million.

In comparison, in Q1 2016 Interactive Brokers’ DARTs were an average of 748 000, or a 100 000 more than in Q2 2016. The consolidated consolidated pre-tax income of the broker in the first quarter of this year was $235 million, or 18.7% higher than in Q2 of 2016.

In Q2 2016 the broker’s commission and execution fees decreased 3% from the year-ago quarter driven by lower customer option contracts and stock shares volume, which decreased 8% and 40%, respectively, from the same period last year. Pretax profit margin was 62% in the Q2 2016, down from 65% in the same period last year.

The market making segment of Interactive Brokers posted an 83% decrease of the income before taxes, to $5 million, compared to the second quarter of last year, despite the modest increases in volatility and in the actual-to-implied volatility ratio. Pretax profit margin dropped to 12% in the current quarter from 42% in the same period last year.

Connecticut-based Interactive Brokers is a broker and a market maker. It, together with its numerous subsidiaries, offers online automated trading of stocks, options, futures, forex, bonds, contracts for difference (CFDs) and funds to traders, investors and institutions in over 100 market across the globe. It has offices in the North America, Europe, Australia, and Asia. The group companies holds licenses by the relevant authorities in the US and the UK.

Earlier this month Interactive Brokers reported that the DARTs in June were 643 000 – relatively unchanged from May (641 000), which was the worst month in those terms since the beginning of the year.

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