Spike in COVID-19 Takes Interactive Brokers’ DARTs to Just Shy of Records
As countries across the world are seeing a resurgence in COVID-19 cases after successfully slowing outbreaks earlier in the year, trading activity is nearing records at many online brokers. Today, Interactive Brokers LLC (NASDAQ:IBKR) reported its best trading volumes since March when fears over the impact of the spreading coronavirus triggered a boom in retail investing.
The electronic brokerage segment at Interactive Brokers, which deals with clearance and settlement of trades for individual and institutional clients globally, experienced a rush of activity with volumes rising by 132 percent year-over-year and nearly 12 percent on a monthly basis.
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During September 2020, the number of Daily Average Revenue Trades (DARTs) were reported at 1.953 million transactions from 1.749 million in August. This figure was marginally lower from a record 1.964 million in March. On a year-on-year basis, Interactive Brokers saw a brighter performance in its DARTs as September’s figure was twofold the 842k transactions reported in the same month last year.
Additionally, Interactive Brokers has won more clients as volatile markets and renewed stay-at-home restrictions had seemingly amplified interest from retail investors. September’s active accounts increased to 981,400, or 4 percent higher from 947,800 accounts the previous month. The figure was significantly higher by 47 percent year-over-year when compared to September 2019 (666,200 accounts).
Almost all US brokers have experienced a flood of new account signups from individual investors who were encouraged by zero commissions and sustained volatility.
As the listed broker saw new accounts and trading activity surge last month, IBKR had tightened restrictions on borrowed margins, which hit record lows in April when the company sought to curb client’s bets amid Corona-spurred volatility. The company’s ending client margin loan balances were around $30.0 billion in September 2020. This figure was lower by one percent from $30.4 billion in August, but was higher by nearly 17 percent against the year prior.
But while volumes were buzzing in September, Interactive Brokers charged clients lower commission fees, namely $2.55 per order on average. This compares to the $2.74 per order it collected in August. The figure includes exchange, clearing, and regulatory fees, with the key product metrics coming out at $1.78 for stocks, $3.84 for equity options, and $3.75 for futures orders.
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