IBKR - Earnings call transcript Q3 2018 | Interactive Brokers Group, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Interactive Brokers Group Third Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder today's program maybe recorded. And now I'd like to introduce your host for today's program, Nancy Stuebe, Director of Investor Relations for Interactive Brokers. ahead. go Please

Nancy Stuebe

on Thank XXXX everyone. on joining to his us call, the will Good Q&A. quarter you performance. our comments present to third asked is business. Once review He but handle afternoon, me for the again, the Thomas

today's include control. and certain a belief the which company's company's forward-looking outside represent not reminder, As future nature events, are statements, the regarding which call may by their of

is our differ Our in actual refer and -- statements. materially ask these indicated results what We financial condition forward-looking possibly to from may the press may that you disclaimers release. in

should with risk factors the You contained filed description reports financial review also SEC. a in of our

and a the exchanges. and the the midpoint reinstate is where at they another bid before, orders in executions emphasize quarter did better order because when we shares is continues moving the it time listing will exchange Typically prices. believe new are then exchanges than Brokers. IEX the at milliseconds buying give primary IEX, to I traders our the midpoint that will to exchange. trade or three of limit our done crumbling investors the other This developments the but start want order selling on IEX limit I the the ask our discretion cancel our order are primary down several IEX on saw for to stock listing better to the to at midpoint. are at that Interactive by decision all new with the to move at exchanges get our peg orders at spread, which discretionary has allows post midpoint This to

brokers, are traders off us combination So picked effective speed feature bump involved, to invest to exchange on high cost read order to an less then investors routine are middlemen investor, of order makes signature that facility. the milliseconds benefit that possible flow with goal is we better often. give benefit who few It their it the then not mouth that retail take that is IEX as the for speed the website is IEX's with bump us. flow order order want go feed, the gets low type are crumbling traders, as much limit of Anyone order trade they raised, to software as buy other cannot and to buy the should because do the up a is to at a the order. to interested, advantage the and make middlemen another not go against there costs When from reduced. of our sure and to who frequency

we to We on records our and are the list expect be follow IEX quarter, to brokerage company again, many Once to more companies set in new in business. this us. first pleased we

ago again. by for led business, all-time second with XXXX average in steadily the the an at XX $XXX.X of monthly to Our as has equity our quarter. the from DARTs up active of in quarter customer outstanding Margin net was This measured year were February. this high but quarter more volatility quarter its XX and the and was down from XX% margin $XX.X reaching quarters. last up VIX they revenue slowed from Since an Market was VIX XX% XX% and reached coming end, over to risen XXX,XXX, up up year, billion September first down in average XXX,XXX. also but to XX% we sequentially. in hit high customer also a increase lending its the was up of brokerage XX%, growth pretax XX% accounts billion,

the and services different types range not increase customers many management DARTs more we support to comes this we one quarter. of We offer growth from investment our expanded account of program, Through the financial integrated acquisitions. transactions consistent Our account. from our [indiscernible]

dollars First, currently our account, another. clients U.S. cash, transfer qualified one having without are in a to from the best in and account their interest on rates X.XX% available

pay Given that a we only a fraction this opportunity new many newly as bring also directly small advertising. paycheck banks and new deposit IBKR earn X%, huge we this and keep our customers pushing and and message see brokers in of start to and use in Customers Pay can high to immediately to pay function account bill. their our their into introduced rates Bill those now deposits

lose. many on am or purchases by zero gain to fees. they potential trades JPMorgan over to at importance customers like XXX collectively, pay our down they is account perspective capabilities one up got We'll in especially The environment contribute the an traders, on offering market of where continue to this we deposit. or it growth coming segments syndrome the automation. growing, times such best their to cash at trades. do investments many pressure on market at broader compete The the against ever will will offering more attract say low margin orders rates and cost rates borrow aware can high costs spreading operate interest and to as price, to Our commitment continue through interest free asked are position. selling to in of us expenses and our our and high Further, is the price their rates as in industry-low are and of clients it revenues global grow keeping worldwide all and from centers geographies, where account. seamlessly about continue more customer's our we industry. as in interest on I long have and our debt our rates advertisements. on enables large, and stop? that low these there This high to we can securities execution well business. how of on Individually adhere and to grass is account while customers high our capabilities answer downward greener allows focus offer as well commissions is, I and We've to low make to the when commissions we frequency building borrowing, MasterCard rates it is

we select So competitors as we versus in To business them, charge on differentiation advertise we many interest media are access the and well about to on target offer we media. customers social important we talk the with prices worldwide. international reach potential customers on reach the on locations our along that the we balances that points and of pay technology cash as

who the demands that we our products, countries, requirements. which in can sales It platform a team and over have that our takes who and decades. multiple train multiple types XX than a have experienced to are is also do people across all in field year well-versed experienced different in someone grew We more customer

word-of-mouth. located of contact new are and colleagues. make industry our firms from world asset do around recommend to who both with who salespeople managers conferences friends us attending launching Our the clients may everything and business keeping track maintaining change and with half from to a be they to comes About and existing existing of events to looking

the currency a bigger the profit about people we on Brokerage what quarter's a or quarter the for gains the our $XXX us or million, margin. this who margin. for more XX% of was treasury adding million talk back net achieved are this more $XX million pretax there $XXX unfavorable $XXX XX% gives of do trader marked million that platform, and investor. grow we So impact people Pretext and for us are the can pretax was and

commissions. our how Once of accounts, evolving. customer and again, customer by saw segments, brokerage equity breakdown growth the in we business all for our in Now is strong client

X% our our funds accounts client and of For firms trading commissions up up XX% were XX%. the of third equity XX%, of of proprietary quarter, our XX% hedge and XX%

Customer of commissions markets of was strength up continue space, our is XX%. markets. platform geographic both XX% geographic by to XX% driven high Our up overall highly about institutions customers up execution cost. equity and focused this as up low strong customer spread. in in XX% developed attract rates of margin and in area particularly the in and and was Individual and XX%, developed word-of-mouth competitive which developing accounts equity cash regions, made internationally XX% price has all double-digit and Growth interest

orders. prices a prices Interactive we that practice with and our is lower volatility quarter. forces Brokers investors and Investors their their gives pay suit. market third last benefited commissions their to sequentially, continue customers down frequency now is higher While from more of year's part growth versus higher them volatility sell at the high orders the do aware something traders, customer's is account to brokers buy become orders and selling which is on to of of not on practice do class-action This

margin well access XX% as We plays and up also Investment up XX% strength. on on but of financing, to Advisors cost, XX% all is Registered a FX which XX%, that also segment EDPs multiple commission up as interest facts capability, trade account account. as fees important our we our RIA XX%. low on mass commissions RIA our multiple allocated among the balances, products, The XX% which customer who not only and of of from individuals customer equity represent see an not benefiting is charge cash among trade our do accounts, upload rates global our new on internationally, high to our commissions and

reporting increasingly an CRM software does an while as Relationship pressure as Customer fees, have excellent RIA for tools has advisor services. money to important. free providing offer mean not on third-party performance environment to also grown In or well We ability pay that our Management functionality downward with an save and reporting

XX% X% equity, up commission Brokers accounts, represent and up our XX% Finally, our up Introducing our income, XX%. XX% of of customer customer of XX%,

from outsourcing growth Broker whom best the regulatory developing to two in trade of As which solution burden and back countries of internationally. many to worldwide, of the new segment your investor increasing our the want the continues quarter, discussed class last makes benefit we tailwind major office trends, Introducing the

from introduced direct reasons platforms our their securities, idle transfer we lending debit on best their MasterCard, balances interactive new more earning variety can automatically integrated Without Pay on the financial account. payroll to business. account, of giving Management on interest also quarter, single to Integrated and consolidates management their you function our and transactions on the having Investment interest program, a our earning customers both brokers customers get includes paid to shares. between market cash, rate income by their our do out This stay investment transact financial rate extra funds Bill which deposit, our fully

Bank Our and billion Insured customers this and $X.X insured Deposit which offers reach up to SIPC quarter. grow in FDIC deposits, to $X.XX million Suite program, continues

to to you Brody Paul numbers, forward now looking are and quarter fourth our Israel we Paul? will the announcing access the in on Finally, take platform through

Paul Brody

am I on in. Welcome Nancy. results detail to we'll take you then going the you, and Thank everyone dialing on we'll call. the on numbers to and behind drivers questions. go usual review Thank some our for then as the

and highlighting effects pretax Let those primarily items, that numbers remove our review currency get by marketing rise our of more imply measures, a me from headline to of those and I'll X% and income strategy for operating XXXX, revenues in net in both my business financials. and year-over-year of respectively detail for numbers we diversification when increase our the of but non-core sale the begin XX% U.S. the XX% this on

turn let's volume in last off balances, market up quarter stocks. of laid stock trade in due decline in a were rise and was stock year's X% volatility March. growth an XX.X% this strong quarter quarter and the higher cash proportion volatility quarter quarter's after XX.X volatility. to which and increase XX% The from and -- from the in first is was to volumes trading an volume rose XX% third February in to in volumes priced The XX.X% over respectively. options second in in metrics, quarter. volume, year reflected to of equity declined this futures XX% first stocks the average with volatile in in generally was accounts, the lighter X% line and low Sequentially operating a trading customer So priced from The and measured VIX particularly trading VIX of ago however, trading while by increased the let and of average

shares of commissions As the a dark [ph] number rose. stocks both and declined result a and of this shift of on traded

customer equity grew and growth customer was to $XXX.X to Total in XX%, Finally, all Introducing contributed billion. Financial segments, well. up in accounts and down XX% We to volume Advisors. foreign exchange which XXX,XXX growth particularly of saw in as Brokers

the total With tailwind year. new our continued XX% from versus up DARTs growth, quarterly account last were

average trade slightly futures. on $X.XX per mix higher year-on-year featured that to Our stocks in and overall average and sizes commission fell cleared Forex a X% DART in smaller product options

fed to the our margin gain again a on X.XX% third September, of of Moving Due margin late last our from short quarter on portfolio, The four rate increases year. modest mark-to-market U.S. to in total this careful in widened reserve table, management making since quarter net rates rates funds of duration federal XXXX. a the X.XX% December we about interest in raised of interest our holdings target $X treasuries. net million to recorded

contributions interest U.S. we success income hold in We As net maturity, always, on to from forward. them unlike but increased require together banks should going increases generated gathering assets our plan cash to GAAP in with asset balances rate securities us to mark lead larger our financial as sensitive rules interest these reporting. brokers market continued customer to believe more to balances.

bank to management insured most reached XX% were Margin last margin grew our and segregated $X.X deposit to interest introduced rates to billion. with growth Average and sweep XX%. program loan year, significant which led late the margin balances of net combined grow higher interest last interest versus margin. continues cash FDIC lending contributors Our year,

precisely XX%, caused the cash Two rate. interest not primarily yields on our fed hikes match in funds income rose Our cash to interest fed US segregated segregated increases factors the on rates. to

in rate. of rates, impact into the otherwise is prices interest already we the of the an the suite is additional for impact would rise customer loans function these being follow purposes new out from that reinvestment yields of began fed accounting of net to point days rate of a XX% recently assumption, that rates were income balances with break periods basis opportunities calculation, highest quarter metrics margin FDIC is subsequent that borrow instruments. the and to our available balance immediately. of current the to until to treasuries rate other put program new our and in investment next under assets, and in of rate instruments in XX% holdings second, although in in as $XX.X lending $XX.X That increases now program to be attempt opportunities further run cash these in the billion, of markets. have separate with XX% produce average customer point various net Year-over-year customer our the been about invest. expect given And to investment the of and the to typically sheet. positioned X.X in are in With month in sweep on more interest XX the the lending XX the growth includes as product the fewer included the market September, of increase our securities that introductions we basis on held unanticipated Securities a in run isolate swept work an reflected interest the to our well of of higher than in expectations maximize in our be cash a four the all a of in that the quarter. the baked currently about were unexpected at Starting segregated not FDIC already which not yearly Therefore hikes balances rate income impact over next cash rise in currencies lower we and of held there we would that is rates which up funds income prior in in pick First, million rates this amounts Now present of the million our removes also that segregated for yield portfolio us to slightly hard new during currencies, duration in increase continued of given rate. next expected of XX showed our cash elevated decline estimate quarter, balances quarters would to our in hike the is

would from at income. the solid were both was material a revenues the quarter fee XX% pretax for We million Turning net Pretax in up scope to Brokerage global million prior commissions of outside our million continues the $X remainder ago $X up XX%. interest Net carry for not which interest a $XXX $X reflects Electronic $XXX small will proportion in currencies for profitable quarter markets customer of in segments, are a basket XX% a to we margin and was currency million We this $X.X to fourth to million gains activities to clearing rebate periods. systems gains to and year pretax treasury performance the income turned to absorption of a international a with quarter clearing decreases expect million. for making versus continued XX%. segment the at up reason Market in were received marks facilitation Fixed diversification and results. we is million in disclosed accounted effectiveness making execution our the for and expenses clearing to defaults. the of of our our that previously million million time it and business. the about absorption $XX this X%. about the have Market effects were of XX of execution expenses at expenses best we projected and been expenses primary of the consist were corporate operate migration market up reflect related brokerage increase rebates $X in to evaluate The that were winding management of to the and equity limiting in our migrate XX% full net were was Customer expenses income. of on compliance quarter. and The successful legal reserves. it $XX contributions debts down customer We to and of some and options efforts reach revenues new to increased strategy. segment a and trading bad debts to were the This number of bulk making remain also a risk being small US this income gain immaterial market call quarter Net we making also them. collect the was that expense as brokerage which million in of $XX reflecting debt continue demonstration expense of

quarter, loss as major comprehensive is reported is and earnings. overall total As in $XX against the or most an We the million our these we as to OCI dollar $X other this of earnings $XX from be strategy strengthened OCI. currency decrease which million million incurred US included the currencies other effects share other $X.XX income income estimate of in per in $X.XX $X.XX with and from comprehensive reported

adjusting DARTs average sale million the offset on $XX year's I items categories. lower the Turning volume higher our of gain to and marking revenues year. adjusting over rose in million $X million up X% currency the X% our last million and Commission higher gain to stocks up year quarter, last quarter on the options on and income results revenues after of before, net product $XXX the most sizes partially over of adding also statement, XX% of the strategy for making back market, $XXX an million ago adjusted by trade $XXX revenue net in these portfolio and loss $XX our mentioned million for treasury from and as U.S. business net market

overall market we $XX the marks cleared and $X.XX our DART million fees income, other the and million net per our includes produced As million. income, average treasury earlier, interest strategy, commission global $XXX which and remainder. decline reflected $X the to was mix. Other we corporate income currency received making Of this brokerage noted $XXX of

X% were largely global decline the the transfer expenses from the million making and last $XXX our all one-time -- gain in reserves. administration primary the of other expenses, quarter, legal and drivers on year's from showed and of from general stemming absence increases. were US million income compliance of up costs administrative year business, the Noninterest higher for $XX nearly market Aside in last areas expenses

million recovery G&A of in year a note, a reserve. contained expenses quarter, the tax ago a As $X

million have discontinuation increase rebate clearing execution was would increase been offset fee mentioned and G&A otherwise. as the earlier options So aided well by partly lower of the as by $X higher our partially clearing Also accruals. include adjustments employee making regular XX% lower US or at headcount quarter market for stood year. to to XX% business. X,XXX acting the end, bonus year-to-date increase up our from compensation were benefits which offset budgeting At last and total expenses, expenses

income client up EPS and We this non-controlling software currency have follows. was hiring aggressively and the to of per earnings treasury interest versus period for last of the we all adjusted million to for effects which legal our on mark, our in for been the $X.XX for basis, the the pretax the areas $X.XX shareholders $XXX per higher XX% quarter currencies $X.XX an of pretax Comprehensive understand quarter. is mentioned previously, margin public was million operations for Diluted million $X.XX income end, pretax most in continue items and non-core and than $X.XX of would diluted Adjusted year. over versus development Pretax between includes been compliance X% up earnings build investors were were pretax in represented reported same and the as last Without I split representing of $X.XX, EPS margin. better India. help the $XXX XX%. and earnings, an income the from so impact adjusted XX% To services, have quarter up share XXXX. $XXX year's share, diluted the

entries are only These First the the in entities income our only and non-cash is one preface, tax related of paid. company tax foreign additional affect taxes item actual income other of million which similar income reported offsetting Tax resulted one-time reported $X a additional reclassification partially to as were Act. expense $X public we at our not of the to reported affect that million. those a they and year-end, The and

which million, related we the not million that it's income income. income first on other this taxes The without taxes $XX income $X income one-time companies the After million million that for deduct see reclassification on measure, the totaling company leaving would company, mentioned of of of of $XX reported related operating $XXX companies. to expense common $X but $XXX or $X XX% million $XX foreign as million $XX back million by million XX% to stockholders and non-GAAP million public million reported million. So the you We our income our this our that a available public $XX public starting is been non-controlling item, only statement is of income $XX deduct and million, before interest. attributable of our remaining for or the income That I reported million for statement. is $XXX statement. million have contains million is $XXX then available shareholders, add to tax with public the income mostly other operating income we $X The on $X the deduct the company paid is net the remaining to leads tax taxes company's

this Our income million tax operating $XX $X of the of million by million $XX companies. the total taxes paid expense plus consists of

debt. business. our Turning well extremely capitalized highly low to capital with liquid regulatory to debits last September an balance standpoint our opportunities leverage billion, to margin to and continue hold in of long we depth sheet and well capital continue sheet, remains consistently advantage year. were a $XX.X term on no XX, our of and carry excess emphasize increase take growing brokerage order the deploy balance equity we XX% as or it At to over We from the of as strength

have plus Interactive fund due This success opportunistic Brokers institutional take growth. our rates this and show in increasingly interest taking which peers to to the capacity it, past than or compelling our versus may Our become customers in rates, figure margin contributed leverage to in customer's noticeable our willingness to swings on as rise, more on hedge attracting lending more leverage. years satisfy

business. growing lending supports sheet Our conservative balance margin management a

activities XX, remainder $X.X equity XXXX, market customer consolidated brokerage. at was was billion. in September $X.X billion Our $X.X the corporate. making facilitation billion in capital and held in and

and like back to happy I'd over take the questions. to be Now will some we turn the call moderator to

Operator

Rich first Repetto Our O'Neill. question Sandler Instructions] from [Operator

Your question please.

Rich Repetto

Yeah good evening, evening, Paul. Good Thomas.

to highest The in can margin growth high moderated growth somewhat am and is to or could is -- tops the it you been markets the the guess the attribute in year-over-year last report in balances compared still XX% industry, first industry, by going still change? the Asian question growth but loan a if Asia it but the attribute has way trying I equity from year, the what's would etcetera. that see is, again and as any look in in rates, in Thomas back growth on I XX%, bench on slowed you has it what you you to

Thomas Peterffy

were So last invested. went year, the our customers growth was higher because the markets up and of many

to customer's only up of of So $X.X assets our the total profit end increased. has was year September, the about assets, their the This billion. value

new year this were to due although assets. So

Rich Repetto

then quantified still now? growing And -- true area the fastest still was just you haven't does that that in hold broke said it, you the but past, Is you Asia. --

Thomas Peterffy

close Yeah, yes. that still is to,

Rich Repetto

or… been I the priced we're -- the at proportion, or then is have what trading with text have question shares you. got the stocks that other you price trading from made is trade, Thank wrong low understand is we the least what in the per brokers stocks priced next people not but at it's and for up lower and low price impacted stocks on And trading Okay. being nicely I low higher commission, in general seeing guess in

Thomas Peterffy

hoops, campaign. is whether to in Chairman you strong if on remember, stock the and SEC So asked their shouldn't low hoops it their price don't priced we going are. telling through what they us but being Clayton us, issue was at stocks take sell jump who it customers June us any about are through they conference we basically and I several clarification when getting words that were They low unless tell

asked working plan he clarify to it. time whether Why they this on said they saying I and that at haven't yet. So him are they are

under circumstances the which we on priced who our lower stocks. up trade tightened customers just we So allow

Rich Repetto

Okay. That That's Thanks. I Thomas. helpful, have. Thank I all you. That's understand.

Operator

you. Thank

KBW. the Our next of from question Kyle from line comes Voigt

Your question please.

Kyle Voigt

Hi.

Just yield XX points sequential on first, the our a outpaced quarter couple margin basis questions first on margin expectations. at I customer increase lending really in through just the the second consecutive think

client to if in that's I you're and of those tiers? lower the within from are been helpful is margin yields? the portion balance words, mix another some a higher-priced balance wondering guess balances the margin Just overall coming larger seeing

Paul Brody

other for Yeah, be that. there explanation any wouldn't

Kyle Voigt

I know by And upper a margin billion earlier benchmark monitoring about press at previously. that then points you were threshold and year a of balances on Okay. sort the there, follow-up just in five this or tier said you $XX pricing the basis as raised release you

have in curious continue Just adjustments? are margin $XX now have mark that customer right exceeded will margin you to comfortable you that or of now balances you with September, pricing level billion the make that some

Thomas Peterffy

credit comfortable parallel. have We in risen are also because balances

Kyle Voigt

Okay. All at past year just last your targeted XX one a seemed -- clients right. increase of trying or on really over that the solutions is to wallet. really for the me Thanks. months your And launched you’ve of number share

other success having and do just been card offering a of you would some wondering but thanks? I that that suggest having that in share in fees think have there you're you're So and success rolled increasing is internally you integrated there, debit that that that direct wallet am out, investment guess management deposit. track I metrics

Thomas Peterffy

which cash, assets. roughly a say, billion of we of our is as all more have than third of Well $XX we

know wouldn’t the but I we that to to interest high describe how it are paying. So

Kyle Voigt

Thanks. right. All Okay.

Operator

you. Thank

question of next the Gabelli. Sykes from comes from Our Mac line

Your question please.

Mac Sykes

of feedback be your sort you that's the gotten around feedback in around this then just hidden on trading truly but did thoughts offering and obviously advertising, competitors bit agreements any if customer the more questions I to free of actually free there, of low-cost appreciate everyone. could in about are trading seems or trading topic Nancy's whether your some And case? complaints a you you from free trading of and just doing about from them. and And and some afternoon, of what like given get that may customers that terms you’ve little comments it? on maybe secondly, your I free talk Good the initiatives customer your costs have want

Thomas Peterffy

issue So free Robin Hood trades. is for joined this us that now JPMorgan serious a offering

to very have I seriously said. this as We take

are but if went fact our example, Hood I've bad them, to on from four why look Robin and we is us regularly Robin seen we working you never gain is commercial So explain that Hood. to three, at customer for day who that from a a for ACATs people the customers two, currently to customers,

Mac Sykes

about over forward maybe reform in changing that you small could may And terms cap take little a where just next the on market the five you and reform about Okay. with make your on be so? model talk a market stocks, talked of years but Value you see going or or bit partnership [ph]

Thomas Peterffy

them to trying know. any to is more I get indication idea have happen. must very successful talk of from no they are because to anything and we Mac, the going we anything. It's really what -- to don't about hard in busy the SEC

Mac Sykes

Okay. Thank questions. you for the

Operator

you. Thank

comes from question the Our from Chris line of Fargo. Wells Harris next

Your question please.

Chris Harris

just from wanted it you about that pricing of I to Hood are Robin is follow out… about industry pressures, inquiries customers transferring the on getting back up nobody cuts and great JPMorgan the point sounds Thanks. about

Thomas Peterffy

asked one there. no base. understand has been us heard, have what anything goes not more have -- customer sophisticated They we on We

we them order in earn brokers that So, I tell the and how flow know much you where -- always payments comes from. understand mean money, they they for --

Chris Harris

Got it.

Okay.

Thomas Peterffy

could that saying free, I you my has trades was no commission do happened. not

Chris Harris

proposition. well-documented like point. have sounds clearly want get a just then you it. Okay. I your And that clarify It value to customers

in earning topic another terms asset balances. of Okay interest

the advantage I am could How your you about and the customers take early So potentially for many guys be? of that what for program opportunities you to want its that do if probably there? economics might maybe internally have of thought program? get on if You guys now pretty us? nice think you could could know I sweep that wondering FDIC elaborate you but got days,

Thomas Peterffy

do we Paul, that? have

Paul Brody

Yeah sure.

groups the if last maybe fourth out be made more quarter last fairly we than all. participation balances it various they be estimate We it began double covered we quickly what them we -- to eligible where for we haven’t are. of roll would full that available probably who had year it the to the little customer quite would So and

up take pretty now. good it got So on we right

with So we're happy it.

other rates at curve than now Our advantage own investment that earnings course. our taking little a are yield at rates the other or without investment maybe of banks better of

happy at to think on their them I it it to customers quite well. up it way made think it So grows on we that. present it's new with efforts fairly We're operating We the level of in. as and pick steadily customers

a program. probably than a before it's more and up take it there there's good was So

Chris Harris

Okay. Great. much. very Thank you

Operator

you. Thank

Brian Our Reed comes from line next the question of Perry Street. [ph] from

please. question Your

Unidentified Analyst

and Hey. Good thanks my afternoon questions. taking for

wondering made what follow-up give First operational on could about more am a is types color a if you changes priced curtailment on low trading activity impact question of remarks you Rich's quarter shares. in had customers I you. and little trading for Thank just think your low DARTs? curtailment this approximately among what existing to on your achieve of shares you the that priced and

Thomas Peterffy

cannot I if customers So other internally nothing that's is that and describes strictly we trades do of on about a was can the we we and kind what don't what but of them and There look we for what regulations cannot we number accept gone they you. that have substantial. kind part tell we orders we accept, can have them -- can orders our compliance it, will are sorry, upset have all of like -- brokers The of department to kind use which of accept. new and issued we that cannot

not lost you example. some. per So Have the we stock do trades to You I Paul? for did day figure had have many work how out low-priced

Paul Brody

at have that No. don't detail level. I

Unidentified Analyst

in XX% up you nine lap I it's in a guessing asking wondering account Got just to DARTs I'm mean reason about in it. almost I the growth volatility year-over-year growth was is mid-XXs your way any XX%. and was of with was there's if interest or and months I know, -- affect any lap don't I'm something. way that you so to year probably presumably will in, effect that in that ballpark will

Thomas Peterffy

do started base Well accounts for When we original than greater to are and originally is tend we those the that I'm is I traders new a not broker that living from think less who the trading fact trade impact -- floor think business, which accounts of addressed I and accounts that introducing sorry. more our a that coming ourselves traders. our sophisticated the were right. to customer people

customary those So customer as I are that getting of our but all that's why come the still volumes know. have -- basic we from, still old, where people that's bulk there, of our

Unidentified Analyst

customer customers if the looks I represented appreciate that's I'm and for so of XX% assets? incoming wondering that your new sweeps. for I second and in our question credits of color how could, equity about Yes. this quarter customer inclusive number different

Paul Brody

we've that the customer and don't the understand to I customers, much mentioned got credit number very credit the to in the but separately weight subject for as talk steady put time. But itself happens that. my after of money not all before incoming are perhaps measure a have transfers on coming to and we asset too in it balances I stream you what because them

aggregate customers who we markets that's has doing and that for primary are more depending invested or factor. as quite and us up are doing customers invested stocks, credits on one basis a and in lending actually an broker, take limit certainly other Certainly become it on customer become the they So gone how rapidly. to margin secured their less

still but invest So on leaves that us customer credits going with are street, the less up. to

off one about the their these which the to of control. certainly in to into you is understand invested way the in contribute obviously have customers another, factors net So being interest way all our or lay but work -- margin under not market,

Unidentified Analyst

a really sound It’s will in to projecting grow input track of net terms And what the clients income longer at the you it have like over term the point a or just in balance. it. cash just are important number their intense not you Got how new ability it's interest track. is made. It's

Thomas Peterffy

with some. to have of so getting ones with it's least clients, at $XXX,XXX we will that the these you had and but paid airing Yeah had as remember on assets us interest these balances got be are worth is that more us

Unidentified Analyst

your it now. Yes. up, adds it's like commission mean than I larger revenue

Okay. Thanks for it. color. the do appreciate I

Operator

of a follow-up Our question is Instructions] Gabelli. [Operator from next the line Mac from Sykes you. Thank

Your question please.

Mac Sykes

I Oh be to the invested at used would to hi. say that the were hope I have could securities, make fully dig Wanted in collateral S&P for how the just to much into account just if on $XXX,XXX firm portfolio.

Paul Brody

Blue uninteresting securities and as demand on call we the you because far fairly as that tend picked Chips a be lending interesting street. S&P to they it's what from meaning So collateral the would general standpoint

go. as and it's call you have at as lending earnings hard substantial come If the in stocks advantage the go rates in one of go tools names, lending on lot, optimize stocks range shares securities have terms a seen street and get esoteric all for built when sort participating function could they -- high. greater borrow index the demand we picked what more get their had times. the is a certainly the in these to of over We've Tesla name in and stocks we stocks, more hot you another very that fully as program. numbers those paid take our see much its And into very which of more certain you come know to lending job are demand, why is which and That's and from revenue where

Mac Sykes

clarify the And GC, on are guess, just was what yield I earnings. to their

Thomas Peterffy

GC. There is on no yield

Paul Brody

what any a Right. that the report interest try getting in what would We if on tell because that it can program don't that GC even the produce into you to we doesn't you you that were be. actually you your customer, portfolio a value but the to I would earnings feelings participating can that your to might you be want to you see in hold a deliver would of yield, indicated tell look account

because the good a of So program we we participation good do lending out. in had very job shares

Mac Sykes

Okay. Great. you. Thank

Operator

further session hand does to back the Stuebe question-and-answer remarks. to today's you. like of program. the for I'd conclude program Nancy This any Thank

Nancy Stuebe

Thank you, today. for participating everyone

As a for reminder, be our this available replay website. on call will

Thank will We tomorrow. again. our be a clean version on posting our also of transcript you site

you end. talk next will quarter We to

Operator

conclude does conference. your gentlemen, the This for in program. and today's ladies you participation Thank

may now Good disconnect. You day.

Interactive Brokers (IBKR) 16 Oct 182018 Q3 Earnings call transcript