IBKR - Earnings call transcript Q2 2019 | Interactive Brokers Group, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Interactive Brokers Group Second 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 follow at that time. [Operator Instructions].

As a reminder, this conference call may be recorded.

to host like Ms. today's now would introduce for your conference I Stuebe, Relations. of Nancy Investor Director may you Ma'am, begin.

Nancy Stuebe

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

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

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

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

our electronic Our broker. again business continued to in and grow we records achieved new

grew course than accounts more accounts the total more XXX,XXX our equity or the XX% last from $XX grew by over of new than XX% client by while year, year. or net billion Our

slightly VIX average Volatility the XXXX. So quarter Index was below this

X%, by accounts more grew platform and trades. DARTs to our on since leads Our clients more more having

continue of during volatility. our and in advantage This all client segments. our trading accounts from customer more higher coming take focus growing activity We all generates platform, new of base periods customers on of more our to onto

offerings clients. I improve Our highlight it more treasury strong. versus XX%. expanded brokerage pre-tax to our bring some business X% Brokerage continues of to platform for this were will of marks constantly our range was be announced We margin up revenues potential seek adjusted and last and the quarter. year to

clients XXX the products now securities including market this invest and over in our other several have and XX centers seamlessly we new to added First, centers Exchange, in quarter, market the on countries. capability Mesghal

were our called the we of customers Futures. their the CME futures were trade. Group successful The trading first has to E-mini available history, these most product this and in ready day began May CME launch Micro X, As

of Stock our by By Canada. easily to the clients borrowers. additional shares quarter lend Brokers introduction Canada now This Yield to interest of can online, earn Interactive shares in yield. Enhancement saw extra lending also stock Canadian earn Program can paid they enrolling fully

We are the Canada. program this to to broker first offer

to can on desk Workstation, high which later added yield fixed connection be Brokers direct emerging and adding institutional, accessed currently bond Interactive income our we classes a other trade with on asset Trader market bonds, this year. anticipate Our supports

our Next, Cash to Management Integrated expand. Program continues

ACH gives and accounts. desktop with network Our their one all clients our payments accessible functions IBKR from financial along for directly services the a Bill This Pay suite clients can easily deposit capabilities, account. direct existing now from mobile of access mobile our and

dollars, and Sports XXth, sell sell Finally, once Canadian opened participants and or our be virtual, buy market a account. can were use pounds bets. to $X,XXX dollars new and Exchange. buy, on on This in real a euros, $X,XXX WIN Players actual sporting free as can LEARN, winnings bets an Interactive Betting we simulated to sports converted to events in commissions to BET, has Their participant Brokers where June up announce it proud or peer-to-peer Simulated time. operates trade get

are here the sports financial to our with spectator than goal familiar new attract with and with more platform. Our probabilities markets is the brokerage who customers to

greatest are platforms number of to the We to bringing committed people. our

securities projects on investors where markets. in already do we Sometimes this the are experienced by working

that learn, world. customers. new represents of the way segment that Sometimes to projects want millions by working in of we we can We win potentially into the largest the the to potential That broker on introduce individual tap one is this investors a do become new markets. population

accounts and by is We strong evolving. business of once growth brokerage equity. customer again Now saw type for our in the breakdown how client

U.S. the some outside example, However, as XXX we a FTSE sell, Hang commission as markets indices. and like Seng, for measured, weaker Nikkei, revenue sell

the quarter, were latest XX% all XX%, XX up equity with for last was of about were U.S., while flat equity months, in regions, up commissions outside. the all where up XX% were year. accounts, individual was customers XX%, Customer and up the second double-digits XX% but growth weaker For individual in commissions customer

Hedge were XX% client up period; XX up X% funds X%; of commissions, our accounts, and the of X% XX%. our our up X% of month for equity,

large in overall both developed and area low high was costs this strong attract developing and execution, interest both and markets. price Growth to cash continue Our institutions and small.

of the client Investment Proprietary latest international trading Advisors XX% XX%; up XX% commissions, XX% due of XX% for XX accounts, X%; customer our accounts XX% equity, to were X% and up weakness commission of RIA XX% Once The XX%; up of commissions. allocated months; markets flow multiple equity, important X%. and low represented overseas accounts. down the up from as our again, XX% continues decline and Registered RIA down our of customer commissions, of accounts, customer rates our well balances, cash interest high not caused among we easy-to-use and multiple segment in on capability, to new as fees fact trade the do that benefit an products, our overall charge to markets.

of to X%. increasing Finally, accounts of XX% continues and tailwind commission Broker developing over a our the internationally. The months, from of of are benefit in up to burden customer Introducing our income whom of of major investor trade new segment XX% XX% customer growth introducing which want outsourcing office makes back trends, equity the the brokers last two X% and many countries, solution class up our regulatory XX% XX the the worldwide, best and up

shows office. we brokers While because growth are we necessary with we a global Asia, opportunities. to they see access markets, any looking continued Mainland trade in And their to accounts a in the solution this seen we segment have offer that outsource China we issues change of had platform many fund a ability we to for back yet forward in past. the as not of The resolution have in to look

companies terms services and broker countries operate in worldwide We we the in are we introducing our region and provide well every to seeing growth are in. diversified of

through numbers, Paul? you Paul the now, Brody will And take

Paul Brody

joining the Nancy. Thanks call you, everyone Thank today. for

As usual, put take for I’ll time within into current the we'll context environment. Q&A. review some results. I'll our And our then numbers

declining operating Volatility in metrics from and stocks. year-over-year average volume in as ago year weakness customer led active average measured by reasonably Our the a XX.X% volatility the again in futures and VIX and drop in moderate Once to May declined recovered intra-quarter This drops trend the share June. in the sell quarter options in clear again, volumes declined reflected X% volatility contract April environment. to VIX masked some trading this a quarter.

stock cutback the took microcap XXXX. also first our by was volume stocks, the impacted of Although which half in place during

which up XXX,XXX XX% Foreign exchange down dollar as growth well. of contributed end. Total accounts equity $XXX.X customer to volume was billion at to reached XX%, quarter

up total With the were last our growth, XXX,XXX new X% continued over year. quarterly DARTs tailwind for account

commission segments. average cleared a DART trade versus average most overall sizes $X.XX to in Our per last on that features product year X% fell smaller product mix

net again the rates of to widened course X.XX% margin in our of interest steady XXXX. the after four second interest quarter held our margin net rates raising times quarter Reserve table, this over Moving to Federal XXXX. X.XX% from

than the million on income of U.S. our evenly flattening a duration yield mark-to-market holdings Treasuries. we recorded we gain this And fixed our of to portfolio. $X inverted, of the modest curve As have is continued shorten quarter

to brokers plan rules them market maturity we reminder, a banks to us require GAAP in financial these unlike to hold securities reporting. as till our mark As

gathering income net Greater an last interest lead going sensitive higher can points customer year cash with continued quarter more contributions asset than assets for combined balances the larger generated We funds our cash. from forward. rate on Fed average believe XX in to basis success interest invested

Bank billion. continues Program Suite grow Our FDIC reaching Insured $X.X Deposit to

cash the in most to balances demand in significant market margin. Margin lending quarter Average the last observed our net second loan from this contributors interest a year's the and we environment stronger margin were segregated declined quarter. borrowing management

in was balances income decline the rates, than higher cash hikes more XX%. offset Driven quarter. balances by year Fed resulting the rate, by than interest more growth customer the funds funds our and over higher margin interest segregated Fed cash benchmark of doubled income in in prior However,

in the As in a from cash a differ two that yield the our there rate. are can change cause funds change on to Fed reminder, segregated factors

XX% rates. lending about second, credits under with customer average in investments are on dollars; of lag our and duration non-U.S. currently reinvesting our some an of XX First, days, there’s

growth to funds lead an follow not effective expectation loans. factors that immediately. rates accounts segregated in the margin our the interest cash These and Fed in in rates would function the both our change of increase in is a decrease The a

investors lending rates also down ago names the from lending that, as X% looking hard-to-borrow were income Securities benchmark there were quarter, fewer as interest rise, that short. Note to was as year securities XXXX, over segregated is in interest the of funds, securities interest greater is earned as received portion on a on income because cash. did classified income collateral the lending they

to the to in in interest in that separate or yields the expect of decrease in about would run instruments as next an or next increase the baked about to income to of result result rise XX prices been cuts into impact already yearly A estimate, unanticipated therefore basis in isolate our have rates or would rates hikes rate. of point million run the are impact these for less in of in rates Now in the our basis our into more earnings unanticipated the basis million similarly net instruments. tend rate Market we point of $XX built X% the XX point calculation, net the which We rates. rate. we Therefore in $XX interest expectations fall income of yearly unexpected from a in rate or XX typically changes invest. impact change X%

a income solid electronic of $XXX Net X%. segments. in million, over million the to for modest with was X% the the turned brokerage, last year. environment. revenues up Turning up quarter, also Pre-tax volatility Beginning a $XXX in performance

by our legal $XXX a income expenses with increased compliance secondary Fixed expenses our million on marks up and in growing for benefits million brokerage treasury business XX%. as hiring with line compensation pre-tax $XXX driven pre-tax of in and were to brokerage investment was factor. XX%, margin the portfolio, higher support Excluding

Customer as markets handful zero will customer making expense $X we past. facilitation bad million business the well outside today to of we debt profitable typically in which the U.S. the of million consists evaluate. continue Market to as within $X was small a the retain we have experienced range

$XX strategic of of were the Market million. income. our The revenues net and trading investments the a gains of which income result $XX was was pre-tax the our strategy. interest making reflects million, remainder were of diversification $X currency and effects bulk segment, million Net corporate

Tiger’s after loss we gain offsets million. in largely in million For Like which recorded second this first million, we $XX $XX quarter of recognized of investment from quarter XXXX recognized a investment, the Brokers have a mark-to-market $XXX of Tiger net IPO our the mark-to-market in of March. on to-date the gain

to continue will market to which hold lead our for mark earnings We this quarter, segment to this further corporate in variability as each position. long investment as we may

basket diversification GLOBAL the currency business. call we proportion effects, in to to of international best As carry to of scope XX our currencies, our the we equity a reflect

dollar we most other As incurred reported weakened of of $XX gain a major net as $X the a about quarter, against this is the a currencies income. gain loss in strategy earnings which comprehensive U.S. is of included and $XX our million million, million from

gain comprehensive earnings $X.XX the reported loss from be and a effects OCI. increase in currency income other share in $X.XX to estimate as total reported with a $X.XX We per

income from items, net marking items in the year. $XXX on and our currency marks. million ago. million revenues for over up include statement, strategy million by loss our non-operating Adjusted treasury loss Turning offset X% Tiger million Non-operating of investments of the to last year market our on $XX revenues X% $X net the Brokers down the the on $XXX the $X partially million gain

lower on in trade volumes primarily sizes X% smaller declined and revenue Commission futures.

the income, noted reflected our at decline commission net market of we the $XXX product DARTs Of As remainder. overall $XXX earlier, interest produced making brokerage $X smaller corporate most for average and million segments. cleared million, million trade $X.XX our across sizes

GLOBAL Brokers primarily strategy, higher our than showed in other investments, and income of other and currency year $XX ago income, losses fees income the was returned The marks received investment treasury includes which marks-to-market Brokers million. of loss somewhat Tiger Other other while a Tiger GLOBAL we areas fees offsetting quarter. revenues a treasury and and our and on

cleaning X% in or across Non-interest quarter was expenses growing The the from including million several million costs $XXX our employee were business. volumes. year. increase and categories, $XX trading lighter for support and drop of execution compensation reflected up X% G&A last in spread costs

headcount ago total. total our end stood at the year quarter X,XXX, At over increase a XX%

compliance, Pre-tax was represented in for I We XX% of services pre-tax and have of down X% million mentioned been hiring represented software pre-tax $XXX and million most XX% previously, and margin. was the items pre-tax margin. areas $XXX a Adjusted income development. a client XX% non-operating aggressively up the income

$X.XX same the Diluted items, Without earnings were diluted basis. year. impact from share Comprehensive $X.XX quarter the versus year quarter per been all for would have in currency for share the which the XXXX. same versus versus $X.XX per for were $X.XX the includes effects non-operating earnings last period on the last $X.XX diluted $X.XX share earnings per

To follows. the is shareholders and earnings, split the better our interest as help understand public investors between non-controlling

$X leaves for income net deduct foreign taxes. operating income attributable statement by companies, to But on interest. mostly $XXX reported is income from only or million remaining with XX% expense public reported for this that paid measure, The is reported public taxes to We taxes income before as non-GAAP companies. our is our attributable not million This Starting $XX a operating to the XX% $X our is remove which then on million statement. we of which $XXX pre-tax million the $XXX company income of the company get million, shareholders. are million, it available non-controlling for income

the the the of add only remaining public stockholders net you available attributable to is owed back to income income our $XX million million, and common net we consists taxes $X deduct After $XX of $X million expense $XX on paid by income paid $X expense the the reported by plus million million on tax on company, statement. The company. see public of the the $X statement see operating million million you income our the company

balance highly liquid it with the to sheet, Turning leverage. low remains

opportunities of We our growing excess equity to deploy hold are extremely balance well brokerage the our business. sheet. strength to capital emphasize order well of as We take in capitalized depth to as in and our capital continue advantage and

carry to no We continue long-term debt.

were At billion, from margin environment year. risk debits June we more XX, on XX% last of decrease a $XX.X saw the

mentioned are leverage. had fund in attracting the on our figure swings in customers, to in show due institutional more this we As opportunistic hedge some past, taking will likely success who

management supports sheet balance worldwide conservative business. growing Our the lending margin

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

moderator take call Now, and back turn I'll the over to some questions.

Operator

Instructions]. Thank you. [Operator

with comes question O'Neill. first Rich Our Sandler from Repetto

Your line is now open.

Rich Repetto

evening, I than a anybody Paul. Thomas, guess, been evening, Good more lot Good Thomas. you've successful probably entrepreneurial on call. the

and the to the your WIN trying transfer, get behind of things find and just the LEARN, they I'm the understand you So will similar, your how you platform? connection thinking be trading betting platform? about make and How can BET, the take to gets on that sports platform. the the leading what so you'll excited can What

Thomas Peterffy

seems tried question to it. your haven't that So indicate you me to

Rich Repetto

yet. it tried haven’t I

Thomas Peterffy

Right.

to we many types, lead leading of accounts. silos is why those So, as on know, I you tried who have to of business us our you five know going And call right? contraction Yes. think it the this have many,

the And brokers. have the accounts, so financial the individual the hedge advisors, funds prop the we introducing and traders,

especially only it when So, -- individual hours, this enterprise is on way think I do in it on. basically trying a for But extremely attract very, entertaining, will consumer. to is I for was if goes that very it because big four example, the game

we it. So if would any any try suggest you have questions, of that you

be and open make you smart jump and actual few brokers. platform, you from get it once like there will very it to play bets, Now an few a try you to games, a would the a

behind it. So, that's thinking the

Rich Repetto

give Thomas I'll I promise. a shot it Okay,

Thomas Peterffy

shot. ask to really give please a you I Well

Rich Repetto

question. another guess I

Thomas Peterffy

minutes X X open minutes. X It an takes account, to to

Rich Repetto

sports. watch And

shot. certainly I it give So will a

I we I talked Another of question per you’re a as I it’s well learned about per as of lower a than the mean, volatility -- traded, even time basis, low. all looked are And at the XQ headwinds still the guess, going and guess, would -- the be, at call per or when on it macro you from shares an at average facing? shares a result other it’s it's we you sort probably trade day the down.

Thomas Peterffy

reasons One low stocks. of significant that for is priced the

commissions as our the more trade stock low you priced So, than know, limiting to over are volume. we X.X% no

us broker generally made more are all that we than lowest low for the priced very very, stock So even cost for broker stocks. of stocks lowest kinds

Now, because a market had et about we are from regulators pushback the stocks the used to low manipulate priced cetera. sometimes

the us like not expense the or that the have monitor So, decided would do. regulators low survey it’s extent worth to priced of trading stock that we to

stock chosen decline like would priced low have most we to we So levers. --

Rich Repetto

sheet I look bonds, imagine, you would I the our OTC explanation $XX think down it and interest was million what million $XX PINK little as a Okay. year matches was, PINK for million mean, I you to the switch Could from last the $XX for the either bit it after think after me are it -- said Paul monitoring million changed? full year or I up believe equity, question I call, way the and said would you $XX that differs $XX increased do monitoring was million a impact. sheet is to that or $XX oversight of time guess I that bond. why thought same, I low was you explain a guidance last I said, think sort -- they high the million out of has I on what $XX million, we you rate oversight it when at reflecting sensitivity,

Paul Brody

absolutely. Sure,

I as report now the report up In year and what people be full it's symmetrical, and used immediately million paying the that run following weren’t got feedback some -- much to the you to million to sort of $XX quarters. to happy four being and up fact would respectively. $XX down the we we first million to effect fairly $XX rate down that attention being

to we the that like continue it feedback year just that can report most run rate. getting on you'd If full what’s way. people are We're focused

Operator

next And question Goldman you. Thank from Sachs. with our Nance Will comes

line open. is Your

Will Nance

Maybe one for on the Thomas. I as to betting well. wanted head sports

you comfortable of financial trades. onto people that think this is platform them who less at mentioned getting the familiar aimed more I making with are part with getting and markets

platform about ultimately that expectations Could to that you profitability type how and when of customers customer that kind you those for your what the hit the platform? you attract think talk are about of

Thomas Peterffy

career securities book about the stocks. maker. we're and betting all going day the the to going that all betting are about They are didn't a were where long to stunned time, my the options talking the Exchange were market these the big they they I down in course they about but really they in all stocks the bet according talked started by they business my of what I games. to a Stock even the American They absolutely with floor, game as on traders was games talk though wanted And the professional all and way, games. of and on

wasn't why them trade the surrounded games. like didn’t of game. because expect customers, felt I games. But was with me people to know on tend think trade is were what by on I these to of people I the kind I life it on and know bet stocks at because bet on type I'm it to talking why it like specifically stuck I who I bet what sense all a oddball cannot time but that who they So, never never games because mean that's I is ever my a made and don't that to other an tend people and or in even about, somewhat akin the -- I like bet

So, I of expect speculating talking I if mean millions I I take very I a the told would I very, expect. what in substantial of you customers. But this. be that know up I'm

Will Nance

the mitigate broadly And we just and you're any should guys I about over given you in the sensitivity. then to XX kind guess, other maybe the rate just at the like manage switching months? maybe of if now borrowers Got next of shortening rate the I given it a to rate the we moment, ability sounds pricing it. interest shape curve. the Appreciate levers just duration gears see yield think guess do sensitivity how color. the are -- that there just are about, I of business cuts headwind to rates some interest kind of are expecting becoming the the

Thomas Peterffy

percent think don't at I yield that is doubt understand trading territories not X.X But be will charging expected the excess the and do know, Fed with funds. in customers under we for percent. So excess our deep I there. why cuts get are we generally are -- Fed rate some certain curve. the you by accounts paying cash are so over that somewhat -- as as the I balances them ever we'll there balances generally the fund rates, X.X% as

So the to are. rates other are changes as we as in brokers not exposed

alright. So on about will million And difference the indicated, only is X% can as year. be somewhere Paul long quarter per quarter, trades a a the $XX as at we as new money, invest effects

Operator

you. Thank Allen comes question with our Compass from Point. And Chris next

now open. Your is line

Chris Allen

have terms if accounts entered to is I actually wondering there Thomas of on bets there any how and any have any that could size been have and customers and was logged betting the in us sports give many been on if accounts metrics of there simulated -- opened? was conversion you

Thomas Peterffy

and we still in just cautious small we make a We have because way this and started cetera. fixes very et low, to have started we

say. meaningless I the that's and I be conversations. tell basically can that So, anything. you initial can would it you have all there yes, But numbers been I misleading told some if are

Chris Allen

ask by just wanted regulators. under I matters, disclosure this XX-K. I you're in didn’t we know an on additional quarter seems But I inquiries there’s thing the this regulatory One to on, see enough. it wondering, Fair language constant

release? just I the So disclosure what wondering, of kind earnings prompted in this

Thomas Peterffy

it by saw extent. and current we that be regulators authorities highlighting the specifically and prudent there increasing the scrutiny in current banks and regulatory to affect would brokers, make and that activities disclosures environment, may just as surrounding know us that some an to You governmental is

Operator

our Thank KBW. Voigt question you. with next And comes Kyle from

Your now line open. is

Kyle Voigt

have I Simulated are the least also want one so Thomas games able just people increasingly do most bet sports Sports in at the real states online money Exchange. to more I to betting and use U.S. on Betting guess to I to I guess think and sports betting. the who bet, more legalized as on want

Thomas Peterffy

Wait. hearing I Could you again loudly, please you. slowly difficulty over all speak have and start and because

Kyle Voigt

Sure.

Just Betting to on the in Exchange. sports I real states and Sports Simulated was games want to saying monies more do on that most to are as bet able the want now use increasingly legalize so betting. people also U.S.

online offering be this if to open new accounts the Brokers simulated long-term? simply Interactive or as states legalize U.S. sport Or brokerage bet wondering Just is is live being in more to eventually that? the just in would drive

Thomas Peterffy

this accounts the sometime Driving they do don’t what new with is may brokerage the may primary want down or I road. speculate purpose. not about to

brokerage our to new now So perfect accounts. right is focus and platform the drive

Kyle Voigt

as Paul for one And well.

I missed Paul. this if Sorry,

Just rates regarding blender caused your rates, quarter tiers in XX increase was something a wondering mix the yield There any in or U.S. sequentially. points basis mix on since of it margin was increasing simply else? in by different the geography if that move in that or wasn’t pricing borrowings

Paul Brody

more because accordingly off everything some not a trade is in spread the it’s primarily we actually that charged fact fact of foreign did U.S. dollars the and up go That's in benchmark. and Right.

Operator

Instructions]. [Operator

from Mac Gabelli. next question with Sykes Our comes

is Your open. now line

Mac Sykes

about side? is Thomas, and for about the Are branding advertising few what a terms think traditional just had people? I this you different your you questions. outlet media, or thinking in strategy of reaching betting

Thomas Peterffy

will on one are And ads what the page account? the sports -- banner to you click a Mac, to the those the on of way, betting where banners, you you By if lending So sites. have is. opened explain you we using come deal

Mac Sykes

to I'm still so. waiting do

Thomas Peterffy

Oh! so do you a such was also would that. disappointment. You’re I that hoping

Mac Sykes

will I care it week. this Well, take of

Thomas Peterffy

Thank you.

Mac Sykes

outside questions. marketing on it then two And for basis costs? to you two And outlined goals the How year it asset an internal much or annual maybe have cost next the any over gathering support other years? of will

Thomas Peterffy

or source, asking? goals you're gathering Internal from asset this

Mac Sykes

Yes.

Thomas Peterffy

assets. source Well, not as gathering you this does know

account not convert your brokerage cash no, to order So people commission that is done have their answer who from question a in to that. credits? their The may account we be in

Mac Sykes

Okay. And to just support cost it? the ongoing

Thomas Peterffy

ongoing that’s well to think maybe a dollars. millions lot, support cost The it, of single-digit don't I

Operator

question comes from next Fargo. our And Chris with Wells Harris you. Thank

now Your open. line is

Chris Harris

on yields follow in benchmark sequentially. up? the Was margin quarter The drive the in -- earlier that non-U.S. that helped Asia? rates question rates rates to about up rose increase in What that it the

Thomas Peterffy

was, yes. It

Chris Harris

Okay.

Thomas Peterffy

not Certainly Europe. in

Chris Harris

versus Yes, you bit little investment duration. maybe I portfolio? Exactly. you're us a what breakdown? know more Treasuries perhaps guys your to you Can is portfolio? talk in And right. in what's I else about that gave know us non-Treasuries? But securities. the investing between maybe Treasury And a But the breakdown

Thomas Peterffy

and there treasuries The are know these banks? These are loans, are are are how they much the banks. three there loans, XX, So, components. cash-in fixed are there cash-in then margin treasuries, margin the the you there are,

Chris Harris

question last from guess I Okay. me.

potentially think Fed and the of rest you cash the pay does with think You industry start a cutting had your you the here, -- strong I could you're balances. I If in rate required guys have been shrinkage. growth balances, the be rates in the cash balances very that paying competitive do forced that, partly seeing some result risk? rates, of as very and And is at you're guess of growth you're to, lower on

Thomas Peterffy

it not the risk. think to point by put we pricing under cuts that lower anybody going that pull But not if do a as is think and be Well, their at at the I it may out growth I therefore and don’t Fed money the future mattress. a point,

Operator

our with Point. Compass And question Allen you. Chris next comes Thank from

line Your now open. is

Chris Allen

think And Kind business. around lending am zero. of of competitive on FX. there's in the would you do getting on have brokerage your wondering margin of cuts terms you about bunch questions quick whether some offsets of for there I Japanese I'm to pricing of or I kind commissions implications question. how And imagine

commentary that So you would any be if could? helpful,

Thomas Peterffy

circumstance. interesting very a is business commission zero this So

you're to you the sell I companies potentially JPMorgan route execution. traders, that assume give us, It's a the technology commissions orders. do the like all who and don't some have So and Robinhood, charge reasonable because order may, and flow been idea choice to zero a some and you others frequency familiar they with have brokers they that high

multiple give -- one routing to a exchanges be sell and don’t you to to have it build within and to have high at just they where how as who execution would technology it moment to to wouldn’t the them to they exchange, software to they would an decision-making frequency to route enough you to distinguish and their much. because route So, have have choice, have route software which traders to have them

of brokers -- So us. especially but, introducing our know, you many to are customers

You that's we customers. mean prices to don't give our really execution care you horrible know say I what tell to but it's what what they us.

to point, group and maybe have if we dumb a should clients. service So, of this we offer wonder seller that stop at

Chris Allen

So here? brokers, Japan and case it’s for is a that the similar implication with of some basically Monex those same

Thomas Peterffy

Yes. Right.

Operator

for any this And to not Thank am Nancy showing further time. back like to I questions call closing remarks. the turn any at I now Stuebe you. would over

Nancy Stuebe

today. participating for Thank you everyone

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

will of We our we version our Thank you next will and talk on transcript clean you tomorrow. also again site a to be posting quarter-end.

Operator

have for day. disconnect. concludes today’s thank and you Everyone, and gentlemen, program This conference. today's may wonderful you all Ladies a participating in

Interactive Brokers (IBKR) 16 Jul 192019 Q2 Earnings call transcript