Author Topic: IBKR - Interactive Brokers  (Read 129864 times)

misterstockwell

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Re: IBKR - Interactive Brokers
« Reply #10 on: March 21, 2011, 07:32:29 PM »
I had an account there. I found the interface awful, customer service non-existent, and the records brutal. I closed it.


given2invest

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Re: IBKR - Interactive Brokers
« Reply #11 on: March 23, 2011, 02:46:58 PM »
they currently have 164k accounts and TP estimates the addressable market (savvy financial professionals) to be 2 million globally.   

My numbers above (55 cents in 2011) assumes 35% tax rate and full G&A hit if they shut down market making.   The street expects them to earn 80-90 cents in 2011 combined with market making.   

Do you have any other estimates for the size of the market opportunity?

Along with that, what is the market size for investors that trade these volumes?  Average annual trades are far higher than the competition, if they continue to grow new accounts will profit growth increase at a far slower pace from less frequent trades?

Do you think competition will increase with Schwab's purchase of OptionsExpress?

What do you calculate for an EBIT impact as the result of a 25, 50, 100 bps move in rates?

I established a position in IBKR at the end of February for similar reasons.  The questions above are some of the things I've been working on.

CEO has estimated market size at 2-3 million people.  I have not a clue but know its much larger than their current customer base, especially on a worldwide basis. 

Anything above fed funds 50bp is the same and I think its a 30-50 million EBIT bump - not a lot.  10 cents a share. 

Optionsexpress prices are 2x (or more) IBKR.  I do not view them as a threat at all regardless of them being rolled into Schwab. 

given2invest

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Re: IBKR - Interactive Brokers
« Reply #12 on: April 01, 2011, 10:33:08 AM »
Monthly metrics out...they are exploding.

They should grow accounts this year ~40-45k, which would be total growth of 27% y/y.

Also, customer margin and credit balances exploding. 


enoch01

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Re: IBKR - Interactive Brokers
« Reply #13 on: August 05, 2011, 09:23:04 AM »
Thread resurrection.  IBKR dropping today, even as VIX climbs and (I'm guessing) DARTs rise.

fenris

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Re: IBKR - Interactive Brokers
« Reply #14 on: August 11, 2011, 05:43:07 PM »
Hey given2, do you have an opinion on IBKR's tax expense?

From what I understand, IBKR should be taxed on the 11% of pre-tax profits they own of the IBG LLC (11.5% after the share swap?).

In Q2, EBT was $149m. Income tax expense was 12.5m and IBG Holdings LLC (NCI) received $127m.

10-Q:
"The Companyís provision for income taxes is comprised of two principal components: (1) the Groupís consolidated income tax expense, and (2) the Companyís U.S. Federal and state income taxes on its proportionate share of the Groupís income that is subject to tax."

Does this mean that the $12.5m are the taxes on IBKR's proportionate share of the EBT? If so, it would be $12.5m on (149-127)= 22m. That seems a little high..

Also, I read their comment on a $1bn step-up related to the IPO. It appears that IBKR pays (or paid) 85% of a tax timing benefit (DTA) to the LLC? As a result they have a $284m liability (payable to affiliates). I may misunderstand this but it strikes me as a bad trade to pay 85% of a tax timing benefit which will inevitably reverse. If anything, it would be appropriate to calculate the NPV of the expected timing benefit and reimburse the LLC for that?

yadayada

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Re: IBKR - Interactive Brokers
« Reply #15 on: October 24, 2014, 03:15:55 PM »
Thoughts? Seems expensive at 20x earnings. But still low market penetration, and that whole HFT thing is only good for them. Low cost provider best tech etc. I'm not sold though at this valuation with the black box element
« Last Edit: October 25, 2014, 10:07:28 AM by Parsad »

ItsAValueTrap

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Re: IBKR - Interactive Brokers
« Reply #16 on: October 24, 2014, 03:23:51 PM »
HFT is the worst thing that happened to their market making segment.  (This is my opinion.)
Interactive Brokers is not in the game of shaving miliseconds off their trades.  This requires a huge investment in high-speed networks.  Because of this, IB is at a disadvantage when they are a market maker.  They will get picked off because they have slow quotes.

On the retail brokerage side, payment for order flow is a problem.  Because their competitors take kickbacks for selling out their clients, they can advertise lower rates.

On the institutional brokerage side, dark pools are a small problem.  But many institutional investors have figured out that they have been getting screwed by their brokers, exchanges, market makers and other intermediaries on order execution.

------------------

Peterffy complains about HFT in one of his speeches.  Sorry I don't have the link.

Here's a news article where Peterffy talks about HFT:
http://www.huffingtonpost.com/2012/08/28/thomas-peterffy-high-frequency-trading_n_1835802.html
« Last Edit: October 24, 2014, 03:26:30 PM by ItsAValueTrap »
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benhacker

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Re: IBKR - Interactive Brokers
« Reply #17 on: October 24, 2014, 04:14:29 PM »
Ben Hacker
Beaverton, Oregon - USA

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Ben Hacker
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