Interactive Brokers

From Wikipedia, the free encyclopedia
Jump to: navigation, search
Interactive Brokers Group, Inc.
Type Public
Traded as NASDAQIBKR
Industry Financial Services
Founded 1977; 37 years ago (1977)
Headquarters Greenwich, Connecticut, United States
Key people Thomas Peterffy
(Founder, Chairman & CEO)
Products Direct market access to stocks, options, futures, forex, bonds, ETFs and CFDs from a single IB account
Services Online brokerage, direct access trading
Employees 878 (2013)
Website www.interactivebrokers.com

Interactive Brokers (IB) is a U.S.-based online discount brokerage firm. It is headquartered in Greenwich, Connecticut and has a number of office around the world. The IB Group consists of subsidiaries operating on a number of stock, option, futures, and bond exchanges worldwide and also provides trading in ETFs and CFDs.

IB is regulated by the U.S. Securities and Exchange Commission and the regulatory policies of the exchanges on which it trades. IB posts its Electronic Brokerage monthly performance metrics on its website.

In 2009 Barron's Magazine stated that Interactive Brokers maintains a position as "the least expensive trading venue for investors."[1] IB has held the ranking as the lowest cost broker for five straight years.

History[edit]

The company traces its origins back to 1977 when Thomas Peterffy bought a seat on the American Stock Exchange as an individual market maker. The following year, he formed T.P. & Co. to expand trading activities to several members under badge number 549. The firm is the first to use computer-generated fair value sheets printed daily.

Timber Hill was formed in 1982, and in 1983 created the first handheld computers used for trading. Their ability to track positions and continually re-price options on one stock quickly contrasted with counterparts at the exchange who continued to use fair value pricing sheets that were updated only once or twice a day.

In 1984 Timber Hill began coding a computerized stock index futures and options trading system, and in February 1985 Timber Hill's system and network was brought online ushering in an era of computerized trading. The system allowed Timber Hill to centrally price and manage risk on a portfolio of equity derivatives traded in multiple locations around the country.

By 1987 Timber Hill had become self-clearing in equities and joined the National Securities Clearing Corp. and the Depository Trust Company. They also became members of The Options Clearing Corporation, the New York Futures Exchange, the Pacific Stock Exchange and the options division of the NYSE. The firm traded on the PSE, the CME, the CBOT and the CBOE.

In 1990 Timber Hill Deutschland GmbH was incorporated in Germany, and shortly thereafter began trading equity derivatives at the Deutsche Terminborse (DTB), now Eurex. This was Timber Hill's first application of its trading system on a fully automated exchange.

In 1993 Interactive Brokers Inc. (also known as IB) was incorporated as a US broker-dealer, making Timber Hill's vast intercontinental electronic network and trade execution services available to customers, and in 1995 IB created a customer trader workstation which provided professional customers access to exchanges around the world, and IB executed its first trades for public customers.

By 2000 IB introduced a "smart routing" linkage for multiple-listed equity options, and began to clear online trades for customers trading stocks and equity derivatives through the IB system.

At IB's headquarters, CEO Thomas Peterffy remotely presided over the NASDAQ's opening bell, celebrating IB's initial public offering

In 2001 the corporate name of The Timber Hill Group LLC was changed to Interactive Brokers Group LLC.

IB was ranked the #1 software-based broker and #1 for lowest trade cost by Barron's in 2005, and IBG was ranked the 16th largest US securities firm by Institutional Investor.[citation needed]

On May 3, 2007 the company issued 40,000,000 shares or approximately 10% of the capital of Interactive Brokers Group LLC in a public offering, at a price of US$ 30.01 per share under the NASDAQ ticker symbol IBKR.[2]

In 2011 Interactive Brokers became the largest online broker in the US as measured by Daily Average Revenue Trades.[citation needed]

During the Occupy Wall Street protests of 2011-2012, IB ran a series of controversial television advertisements with the catch phrase "Join the 1%".[3]

Operations[edit]

Offices[edit]

The company is headquartered in Greenwich, Connecticut in the United States and has offices in Budapest, Chicago, Hong Kong, London, Montreal, Mumbai, Shanghai, Saint Petersburg, Sydney, Tallinn, Tokyo, and Zug.

Trading tools and software[edit]

The company supports numerous trading platforms (both web-based and mobile) and an API, including:

  • WebTrader, IB's HTML-based trading platform.
  • Trader Workstation (TWS) is an electronic desktop trading platform that includes the optional PaperTrader, a paper account that can be used to experiment with the full range of TWS features in a simulated environment.
  • The Mosaic workspace (part of TWS) provides a workspace with an access to Trader Workstation's trading, order management and portfolio functionality.
  • IB’s mobileTWS supports trading on iOS, Android and BlackBerry devices, and on other platforms via the generic MobileTrader.
  • IB's proprietary API and FIX CTCI solutions let traders, investors and institutions create their own automated rule-based trading system that uses of IB's high-speed order routing and broad market coverage.
  • IB also offers a PortfolioAnalyst reporting tool that allows customers to evaluate the performance of their portfolio against industry benchmarks.

Industry awards and rankings[edit]

In 2013 Interactive Brokers was ranked with the highest total score for the second year in a row, according to Barron's Back Online. The criteria included trading experience and technology, usability, mobile, range of offerings, research amenities, portfolio analysis and report, customer service and education, and costs.
  • StockBrokers.com 2014 Online Broker Review [5]
In 2014 Interactive Brokers was ranked thirteenth overall with a three and a half star rating. They were awarded #1 for International Trading (for the third year running) in addition to winning several Best in Class finishes.
  • StockBrokers.com 2013 Online Broker Review [6]
In 2013 Interactive Brokers was ranked tenth overall with a three and a half star rating. They finished #1 for Commissions & Fees, #2 for Active Trading, and were awarded Best for International Trading.

Stocks and Commodities Awards 2013[7]

  • Winner 2013 Stock Brokerage
  • Winner 2013 Futures Brokerage
  • Winner 2013 Forex Brokerage
  • 1st Runner Up 2013 Institutional Platform
  • 1st Runner Up 2013 Professional Platform
  • 1st Runner Up 2013 Options Analysis Software
  • WSL Institutional Awards 2013:[8]* Winner 2013 "Best Broker-Dealer Options"
  • Winner 2013 "Best Broker-Dealer Futures"
  • StockBrokers.com 2012 Online Broker Review[9]
In 2013 Interactive Brokers was ranked fourteenth overall with a three star rating. They were awarded Best for International Trading.

See also[edit]

References[edit]

  1. ^ Carey, Theresa W. (October 19, 2009). "Margin Expands Regardless of Rate". Barron's. Retrieved January 11, 2014. 
  2. ^ Gelsi, Steve (April 5, 2007). "Interactive Brokers Group IPO nearing its $500 mln debut". The Wall Street Journal. Retrieved January 11, 2014. 
  3. ^ http://www.huffingtonpost.com/2012/03/26/interactive-brokers-occupy-wall-street_n_1380517.html
  4. ^ Carey, Theresa W. (March 9, 2013). "Back Online!". Barron's. Retrieved January 11, 2014. 
  5. ^ "2014 Online Broker Review", February 18, 2014.
  6. ^ "2013 Online Broker Review", February 19, 2013.
  7. ^ Stocks & Commodities
  8. ^ "WSL Institutional Trading Awards 2014". Wall Street Letter. Retrieved January 11, 2014. 
  9. ^ "2012 Online Broker Review", February 21, 2012.

External links[edit]