Author Topic: IBKR - Interactive Brokers  (Read 169044 times)

rmitz

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Re: IBKR - Interactive Brokers
« Reply #170 on: October 22, 2015, 02:58:37 PM »
- selecting your real-time quote packages is crazy complicated. i don't know why they don't offer some basic package free based on your assets.

Simple; I don’t use one. Free delayed data.


writser

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Re: IBKR - Interactive Brokers
« Reply #171 on: October 22, 2015, 03:36:47 PM »
As far as I know they have a basic package; the US value bundle. It's free when you reach $30 commission / month otherwise it's $10. Real time quotes for a lot of US stocks. For all other stocks: if you don't have real-time pricing you can right click the ticker, select 'buy market data subscription' and you go to a page where you can see on which exchange the stock is traded, what package you need and how much it costs. Alternatively you can use the 'market data assistant' which you can find in account management. This is all explained in their online documentation.

Granted, you have to spend some time to figure it out but I wouldn't call it crazy complicated. I do agree that opening a new account is tedious (they pretty much acknowledged this in the latest conference call) but if you have a >80 IQ and a spare evening you should be able to figure things out.

Some things are difficult at first but if you take the time to learn to understand their platform it is much more powerful (and cheaper) than their competitors. If you want a broker where you can open an account in 5 minutes and buy & hold Berkshire through an easy-to-use web interface you should not be interested in IB and IB is not interested in you. Retail is not their target audience.
« Last Edit: October 22, 2015, 03:45:12 PM by writser »
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sternalot

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Re: IBKR - Interactive Brokers
« Reply #172 on: October 22, 2015, 07:29:23 PM »
I do agree that opening a new account is tedious (they pretty much acknowledged this in the latest conference call) but if you have a >80 IQ and a spare evening you should be able to figure things out.

This assumption is scary, and let me use a great man to help illustrate my concern with this seemingly indefinite growth that people assume for IBKR:

"Think of how stupid the average person is, and realize that half of them are stupider than that." - George Carlin

The IBKR platform is INCREDIBLY intimidating, and people really aren't that intelligent. As an investment professional, it took me at least two weeks to figure it all out and get set up. Maybe I'm a moron, but I'm not sure there are many outside the finance world that I would recommend IBKR to.

With that said, I believe there is most certainly a cap on market share for this business (as long as its platform remains as it is), and I'm guessing my estimate would be lower than most. So what do people expect the terminal market share to be?

sleepydragon

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Re: IBKR - Interactive Brokers
« Reply #173 on: October 22, 2015, 07:38:15 PM »
I used to have an account there.
Keep in mind the complicated stuffs is intentional. They want customers who are day traders, not someone who buy and hold. that's why their interface is complicated, with automated margin control and even order APIs.

Liberty

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Re: IBKR - Interactive Brokers
« Reply #174 on: October 23, 2015, 05:09:42 AM »
Second level thinking would imply that their complex sign up process and intimidating platform are opportunities. If these things were already perfect, we couldn't expect much improvement, but now, if they just fix this, they can accelerate growth.

And while IBKR is mostly aiming for the most profitable people (large AUM, lots of trades, sophisticated investments), they also offer back-end for other brokers. Over time, these others - if they can win enough of them - can have the simple interfaces and spend their own marketing dollars attracting more 'regular' people while IBKR focuses on a different slice of the market.
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KCLarkin

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Re: IBKR - Interactive Brokers
« Reply #175 on: October 23, 2015, 07:22:54 AM »
Second level thinking would imply that their complex sign up process and intimidating platform are opportunities.

Exactly. My point was only that letting people trial there complicated software is probably not going to solve that opportunity. Lot's of low hanging fruit here though.

yitech

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Re: IBKR - Interactive Brokers
« Reply #176 on: October 23, 2015, 07:56:02 AM »
How do you guys feel about company issuing 8-10% stock options annually?  Growing at 20% is great, but should constant dilution be overlooked?

Check out the comments by @Psclfrst
https://twitter.com/noonsixcap/status/657248165628764160

Liberty

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Re: IBKR - Interactive Brokers
« Reply #177 on: October 23, 2015, 08:10:44 AM »
How do you guys feel about company issuing 8-10% stock options annually?  Growing at 20% is great, but should constant dilution be overlooked?

Answer here https://twitter.com/NoonSixCap/status/657571760930463744
"Most haystacks don't even have a needle." |  I'm on Twitter  | This podcast episode is a must-listen

yitech

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Re: IBKR - Interactive Brokers
« Reply #178 on: October 23, 2015, 08:49:48 AM »
How do you guys feel about company issuing 8-10% stock options annually?  Growing at 20% is great, but should constant dilution be overlooked?

Answer here https://twitter.com/NoonSixCap/status/657571760930463744

Perfect!

marazul

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Re: IBKR - Interactive Brokers
« Reply #179 on: October 23, 2015, 09:51:30 AM »
How I currently see this. Letīs say the Brokerage segment earns $950mm pre-tax next year and MM segment earns $150mm. That is $1,100 pre-tax. Assuming a 30% tax-rate (I think this number is appropiate going forward for us the minority shareholders), I get $770 in net earnings in 2016. Current market cap is $15,900mm so IBKR is trading at 20.5x forward earnings. Question is how long will the business grow at 15%+. If the answer is for more than 5 years then we will do fine. Other interesting thing is how taxes work. We pay high taxes of ~30% but TP pays very low taxes. I think that if most of the earnings are reinvested into the business and then eventually IBKR gets acquired it will be great for us given our position. We would benefit over the years from some tax-shield as the equity compounds. We have the same economic interest per share as TP so in a possible acquisition we would receive the same value after taking advantage of some of the tax-shield.