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Interactive Brokers

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Interactive Brokers LLC
Company typePublic
Nasdaq: IBKR
IndustryFinancial services
Founded1993; 31 years ago (1993)
Headquarters
Greenwich, Connecticut,
United States
Area served
Worldwide
Key people
Thomas Peterffy
(Founder, Chairman & CEO)
ProductsDirect market access to stocks, options, futures, forex, bonds, ETFs and CFDs
ServicesOnline brokerage, direct-access trading
ParentInteractive Brokers Group
Websitewww.interactivebrokers.com
Peterffy talking about his handheld computers in a CNBC interview, 2016

Interactive Brokers LLC (IB) is a U.S.-based electronic brokerage firm. It is the largest U.S. electronic brokerage firm by number of daily average revenue trades;[1] it also is the leading forex broker.[2] The company is headquartered in Greenwich, Connecticut and has offices in Chicago, Hong Kong, Shanghai (a representative office), Sydney, and Zug. It is a subsidiary of Interactive Brokers Group, Inc.,[3] which has offices in thirteen countries.

In May 2016, client equity with the broker was $ 72 billion.[4] According to Thomas Peterffy, CEO of Interactive Brokers Group, Inc., a majority of it is managed by IB's institutional client base: Hedge Funds, Proprietary Trading Groups, Advisors and Introducing Brokers/Banks.[5]

According to research firm Preqin in 2015, Interactive Brokers figures in the list of top 10 prime brokers servicing Hedge Funds in the world.[6]

IB is regulated by the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority (FINRA), New York Stock Exchange, Financial Conduct Authority and foreign regulatory agencies.[7] The company is a provider of fully disclosed and non-disclosed broker accounts and provides correspondent clearing services to 200 introducing brokers worldwide.[8] It has offered direct market access on Australian contracts for difference since 2008.[9]

History

Interactive Brokers was founded in 1993 by Thomas Peterffy, an early innovator in computer-assisted trading. He introduced electronic devices to options floor trading at the Chicago Board of Trade and went on to develop related trading technologies before entering the electronic brokerage business.[10][11][12]

In 1983, the company created the first handheld computers used for trading. As Peterffy explained in a 2016 interview, the battery-powered units had touch screens for the user to input a stock price and it would produce the recommended option price,[13] and it also tracked positions and continually repriced options on stocks.[14]

Litigation and arbitration decisions

In July 2012, Interactive Brokers paid $700,000 to settle charges (by CFTC) that it has "violated reporting rules" and "failed to 'diligently' supervise the handling of accounts".[15]

In February 2015, a FINRA arbitration panel ruled that the firm must pay $667,000 for customer losses resulting from the way the firm handled margin calls.[16]

In April 2015, the trading firm was required by an arbitrator to pay $1,200,000 in damages to a customer because the firm failed to stop “reckless trading” by a trust fund overseer which reduced $800,000 to $75,000.[17]

See also

References

  1. ^ "Press Release: Interactive Brokers Adds IEX as an Electronic Trading Venue". The New York Times. Business Wire. April 3, 2014. Retrieved July 2, 2014.
  2. ^ "Press Release: Interactive Brokers Leads Industry in Percentage of Profitable Customer Forex Accounts". The Wall Street Journal. Business Wire. February 6, 2013. Retrieved July 2, 2014.
  3. ^ "Interactive Brokers". Retrieved 21 July 2015.
  4. ^ "Interactive Brokers". Retrieved 30 May 2016.
  5. ^ "Interactive Brokers Group's (IBKR) CEO Thomas Peterffy On Q1 2016 Results". Retrieved 22 April 2016.
  6. ^ "Improving Prime Brokerage Market Share Should Lift Profits At Goldman, Morgan Stanley". Retrieved 28 May 2016.
  7. ^ "IB Fact Sheet". Interactive Brokers. Interactive Brokers Group. Retrieved June 23, 2014.
  8. ^ "Press Release: Interactive Brokers Rated #1 Online Broker by Barron's for the Third Year in a Row". The Wall Street Journal. Business Wire. March 19, 2014. Retrieved July 2, 2014.
  9. ^ "Press Release: Interactive Brokers Launches Contracts for Difference in Australia". Bloomberg News. Business Wire. October 21, 2008. Retrieved July 2, 2014.
  10. ^ McGee, Susan (November 10, 2005). "A Breed Apart". Institutional Investor Magazine. No. November 2005. Institutional Investor LLC. Retrieved June 27, 2014.
  11. ^ Electronic trading innovator predicts brokerage industry cull Financial Times, 17 May 2016
  12. ^ Company Overview of Interactive Brokers LLC, Bloomberg.com; retrieved 22 May 2016
  13. ^ Peterffy, Thomas (April 25, 2016). "Pro Talks: Billionaire Wall Street Pioneer Peterffy" (Interview). Interviewed by Mike Santoli. CNBC. Retrieved June 21, 2016.
  14. ^ "About the Interactive Brokers Group". Interactive Brokers Group. January 1, 2016. Retrieved June 21, 2016.
  15. ^ "UPDATE 2-Interactive Brokers to pay $700,000 to settle charges". Reuters. 2012-07-25. Retrieved 2016-05-20.
  16. ^ Barlyn, Suzanne (2015-02-18). "Interactive Brokers must pay $667,000 for portfolio selloff mishap". Reuters.
  17. ^ Barlyn, Suzanne (2015-04-28). "Interactive Brokers ordered to pay $1.2 million for trustee's 'reckless' trades". Reuters.
  • Official website
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