Despite a multitude of trading incentives that Interactive Brokers LLC (NASDAQ:IBKR) introduced over the past few years, including commission-free trading and fractional shares, monthly volumes are struggling for any real traction.
IBKR today reported its lowest DARTs since August 2021, which came in at 2.2 million transactions in April. That compares to 2.45 million daily average revenue trades, or DARTS, in March 2022, down 10 percent on a monthly basis. On a year-on-year scale, the electronic brokerage firm saw a 1 percent increase relative to April 2021’s metrics.
A total of 1.85 million customer accounts were active at IBKR during April 2022, up two percent month-on-month, and was also 36 percent higher year-on-year.
The data shows that the trend of rising accounts number is still in play, though volumes were interrupted. It is not clear whether that will be enough to support the revenue growth after the listed discount broker reported lower earnings for the three months through March 2021.
Ranked as the largest US electronic broker by some measures, Interactive Brokers’ first-quarter adjusted revenues dropped 27 percent year-over-year, to $645 million compared to $893 million in Q1 2021.
In terms of margin loans in customers’ accounts during April 2022, the figure totaled $46.8 billion, down by three percent on a monthly basis from March but notched a 4 percent advance relative to the figures of the prior year.
IBKR charges lower fees
The Greenwich, Connecticut-based company also revealed that on average it charged clients commission fees of $2.57 per order, down from $2.68 in March. This figure includes exchange, clearing and regulatory fees, with the key product metrics coming out at $1.77 for stocks, $3.82 for equity options and $3.56 for futures orders.
Amid headwinds from a push to no-fee trading and historically low interest, Interactive Brokers’ commission revenue decreased 15 percent from the year-ago quarter to $349 million. The downbeat figure was attributed to lower stock volume that dropped from an unusually active trading period last year. However, the figure was offset partially by higher customer options and futures trading volumes.
The results for the quarter were also driven by weak growth in interest revenue, which dropped to $282 million, or 8 percent on a yearly basis. This was due to a decline in securities lending activity, partially aided by gains on margin lending and segregated cash balances.
Interactive Brokers is among few platforms seeing such sluggish performance this year as most of its publicly traded rivals and retail platforms had doubled trading volume from their 2021 totals.