Latest news with #InteractiveBrokers'
The Star
27-05-2025
- Business
- The Star
Semiconductor ETF options show caution ahead of Nvidia results
FILE PHOTO: Nvidia logo and rising stock graph are seen in this illustration taken, January 27, 2025. REUTERS/Dado Ruvic/Illustration/File Photo NEW YORK (Reuters) -Traders in the options markets are bracing for industry-wide volatility when AI-chipmaker Nvidia reports results on Wednesday, with defensive options contracts on a major semiconductor ETF drawing heavy trading. For VanEck Semiconductor ETF, the largest semiconductors ETF with some $22 billion in assets, about 2.4 put options changed hands daily over the last 10 days against every call option traded, the most defensive the trading has been in about 10 months, according to Trade Alert data. Call options convey the right to buy shares at a fixed price in the future while put contracts offer the right to sell the shares at a given price. "The put buying in SMH ahead of Nvidia's earnings reflects growing concern about potential volatility for the entire sector following the report," said Chris Murphy, co-head of derivative strategy at Susquehanna Financial Group. On Tuesday, some 105,000 put options changed hands against about 16,000 call options, by 3 p.m. ET (1900 GMT), Trade Alert data showed. In one notable trade, one investor last week bought 50,000 put options in SMH that would guard against the ETF's shares slipping about 10%, to below $220, by the end of May. Nvidia accounts for about a fifth of the semi ETF's assets but due to its dominance in the artificial intelligence market, the chipmaker's influence goes beyond its weight in the fund, analysts said. While investors have been focused on defensive plays in the SMH ETF, options action on Nvidia itself was more mixed, Murphy said. Murphy said investors were selling options to take advantage of heightened volatility expectations around the chipmaker's earnings, meaning they were betting the reaction to the chipmaker's results will not be overly severe. "It's been hedging in SMH while in NVDA they're tactically monetizing elevated premiums ahead of earnings," he said. Susquehanna makes markets in the securities of Nvidia. Interactive Brokers' list of the 25 most active securities by client orders showed Nvidia ranked second, underlining the heightened investor interest in the results. Still, the stock was only one of two names for which investors were net sellers. "That likely reflects some caution ahead of earnings after a solid run," Steve Sosnick, Interactive Brokers' chief strategist, said in a note. Nvidia will be the last of the "Magnificent Seven" megacap tech and growth companies to report results for this period. Their stocks have been mixed in 2025 after leading the market higher as a group in the last two years. For the year, Nvidia shares are up about 0.7%, while SMH shares are up about 1.2%. (Reporting by Saqib Iqbal AhmedEditing by Rod Nickel)
Yahoo
27-05-2025
- Business
- Yahoo
Semiconductor ETF options show caution ahead of Nvidia results
By Saqib Iqbal Ahmed NEW YORK (Reuters) -Traders in the options markets are bracing for industry-wide volatility when AI-chipmaker Nvidia reports results on Wednesday, with defensive options contracts on a major semiconductor ETF drawing heavy trading. For VanEck Semiconductor ETF, the largest semiconductors ETF with some $22 billion in assets, about 2.4 put options changed hands daily over the last 10 days against every call option traded, the most defensive the trading has been in about 10 months, according to Trade Alert data. Call options convey the right to buy shares at a fixed price in the future while put contracts offer the right to sell the shares at a given price. "The put buying in SMH ahead of Nvidia's earnings reflects growing concern about potential volatility for the entire sector following the report," said Chris Murphy, co-head of derivative strategy at Susquehanna Financial Group. On Tuesday, some 105,000 put options changed hands against about 16,000 call options, by 3 p.m. ET (1900 GMT), Trade Alert data showed. In one notable trade, one investor last week bought 50,000 put options in SMH that would guard against the ETF's shares slipping about 10%, to below $220, by the end of May. Nvidia accounts for about a fifth of the semi ETF's assets but due to its dominance in the artificial intelligence market, the chipmaker's influence goes beyond its weight in the fund, analysts said. While investors have been focused on defensive plays in the SMH ETF, options action on Nvidia itself was more mixed, Murphy said. Murphy said investors were selling options to take advantage of heightened volatility expectations around the chipmaker's earnings, meaning they were betting the reaction to the chipmaker's results will not be overly severe. "It's been hedging in SMH while in NVDA they're tactically monetizing elevated premiums ahead of earnings," he said. Susquehanna makes markets in the securities of Nvidia. Interactive Brokers' list of the 25 most active securities by client orders showed Nvidia ranked second, underlining the heightened investor interest in the results. Still, the stock was only one of two names for which investors were net sellers. "That likely reflects some caution ahead of earnings after a solid run," Steve Sosnick, Interactive Brokers' chief strategist, said in a note. Nvidia will be the last of the "Magnificent Seven" megacap tech and growth companies to report results for this period. Their stocks have been mixed in 2025 after leading the market higher as a group in the last two years. For the year, Nvidia shares are up about 0.7%, while SMH shares are up about 1.2%. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
13-05-2025
- Business
- Business Wire
Interactive Brokers Expands ETF Offering with Ping An of China CSI HK Dividend ETF
GREENWICH, Conn.--(BUSINESS WIRE)-- Interactive Brokers (Nasdaq: IBKR), an automated global electronic broker, has added the Ping An of China CSI HK Dividend ETF to its growing lineup of ETFs. This ETF is available through Interactive Brokers' no-transaction-fee program and gives investors an efficient and cost-effective way to invest in dividend-rich companies listed on the Hong Kong Stock Exchange. 'Our no-transaction-fee ETF program is a testament to our commitment to providing low-cost trading,' said Steve Sanders, EVP of Marketing and Product Development, at Interactive Brokers. Share The Ping An of China CSI HK Dividend ETF tracks the CSI Hong Kong Dividend Index, which includes 30 highly liquid securities known for strong and consistent dividend payments. With sector exposure in financial services, energy, and communications services, the ETF allows traders to diversify their portfolios and access one of Asia's most dynamic economies, all within a single product. 'Our no-transaction-fee ETF program is a testament to our commitment to providing low-cost trading,' said Steve Sanders, EVP of Marketing and Product Development, at Interactive Brokers. 'Adding the HK Dividend ETF gives investors another flexible tool to expand their global exposure.' Interactive Brokers' no-transaction-fee (NTF) ETF program features over 150 products. Eligible IBKR Lite clients in the US enjoy commission-free access, while IBKR Pro clients are reimbursed for commissions if ETF shares are held for at least 30 days, helping reduce costs and maximize returns. To learn more about Interactive Brokers' NFT ETF program, visit: IBKR No-Transaction-Fee ETFs – US and countries served by IB LLC The best-informed investors choose Interactive Brokers About Interactive Brokers Group, Inc.: Interactive Brokers Group affiliates provide automated trade execution and custody of securities, commodities, foreign exchange, and forecast contracts around the clock on over 160 markets in numerous countries and currencies from a single unified platform to clients worldwide. We serve individual investors, hedge funds, proprietary trading groups, financial advisors and introducing brokers. Our four decades of focus on technology and automation have enabled us to equip our clients with a uniquely sophisticated platform to manage their investment portfolios. We strive to provide our clients with advantageous execution prices and trading, risk and portfolio management tools, research facilities and investment products, all at low or no cost, positioning them to achieve superior returns on investments. Interactive Brokers has consistently earned recognition as a top broker, garnering multiple awards and accolades from respected industry sources such as Barron's, Investopedia, and many others.
Yahoo
19-04-2025
- Business
- Yahoo
Interactive Brokers Is Splitting Its Stock. Is It Time to Buy Shares?
After a massive multiyear run that saw its shares more than double, Interactive Brokers (NASDAQ: IBKR) is making its stock more accessible to investors. Management just announced a 4-for-1 stock split, effective in June. The move that will increase the number of shares and decrease the share price comes as Interactive Brokers reported another quarter of staggering growth. The stock split may grab headlines, but the real story is the strength of the underlying business. Over the last few years, Interactive Brokers has become one of the most consistently growing companies in financial services. And that growth continued in the first quarter of 2025. With key metrics across revenue, trading activity, and customer accounts all posting strong double-digit gains, the company continues to build on its long-term track record of efficient, technology-driven expansion. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Interactive Brokers announced a 4-for-1 forward stock split, scheduled to take effect on June 18, 2025. Shareholders of record as of June 16 will receive three additional shares for each share held. While stock splits don't change the value of a company, they can signal management's confidence in the business. After all, why go through the effort of splitting a stock if you don't think there's a good chance shares will continue rising over the long haul? To this end, the stock split announcement is supported by exceptional fundamentals. Interactive Brokers' revenue for its first quarter of 2025 totaled $1.43 billion, up 19% year over year. One of the most impressive drivers was daily average revenue trades (DARTs), which came in at 3.52 million and were up 50% year over year. But there was plenty more to like about the quarter. Customer accounts rose 32% year over year to 3.62 million, while customer equity increased 23% to $573.5 billion. "We saw in the first quarter the value of a global automated platform that can leverage its low costs and offer a broad range of products and markets," said Interactive Brokers investor relations chief Nancy Stuebe in the company's first-quarter earnings call. Notably, Interactive Brokers stock actually fell when the stock brokerage announced its first-quarter earnings release and its stock split on Wednesday afternoon. One key reason for this was likely due to the company's adjusted earnings per share of $1.88, which was up from $1.64 in the year-ago quarter but below analysts' consensus forecast for the key metric. Shares fell about 10% after the report -- a move that may have been an overreaction given the company's strong business momentum. Also potentially weighing on sentiment could have been management's comment that there was a 10% to 12% decrease in customer margin loans as the stock market tumbled during Q2. Nevertheless, management seems convinced that the company's long-term growth story remains intact. CEO Milan Galik said in the company's earnings call that this decrease was "not that bad." Further, Interactive Brokers founder and Chairman Thomas Peterffy told CNBC in an interview after the earnings report that the company is continuing to add "more and more accounts" during Q2. The company also announced a quarterly dividend of $0.32, a 28% increase that puts the stock's yield near 1%. Interactive Brokers' latest results underscore the durability of its business model even during uncertain times. With strong account growth, rising customer equity, and disciplined expense management, the broker continues to gain market share among active traders and institutions alike. The upcoming stock split serves as both a symbolic and practical step to bring more investors along for the ride. While the post-earnings dip may give some investors pause, those focused on the long term might view it as a welcome pullback. If Interactive Brokers can maintain its strong growth trajectory (and history suggests it likely will), this may end up being just another healthy checkpoint on the way to new highs. Before you buy stock in Interactive Brokers Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Interactive Brokers Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $518,599!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $640,429!* Now, it's worth noting Stock Advisor's total average return is 791% — a market-crushing outperformance compared to 152% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 14, 2025 Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Interactive Brokers Group. The Motley Fool has a disclosure policy. Interactive Brokers Is Splitting Its Stock. Is It Time to Buy Shares? was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
30-01-2025
- Business
- Yahoo
Interactive Brokers: Q4 2024 Earnings, Retail Momentum, and Rate Outlook
Interactive Brokers (NASDAQ:IBKR) is a global leader in the brokerage industry, renowned for its innovative technology, cost-efficient operations, and ability to adapt to dynamic market environments. The company offers access to over 150 markets worldwide and caters to a diverse client base, ranging from institutional investors to advanced retail traders. In my previous analysis, I highlighted the company's ability to navigate the challenges posed by declining interest rates while leveraging its competitive advantages to drive growth. I also emphasized the significant impact of rate cuts on its net interest income (NII), with management estimating a $64 million reduction in annual NII for every 25 basis points (bps) cut. At the time, a 75 bps rate reduction was forecasted through the end of 2025, creating a considerable headwind for revenue. However, the rate outlook has since shifted with only one 25 bps cut in late 2024, and current expectations now suggest just one additional 25 bps reduction in 2025. This revised rate environment eases some pressure on the company's interest-sensitive income streams. While lower rates challenge NII, the company's diversification of revenue streams, including commissions and trading-related activities, provides some insulation. Strategic initiatives such as expanding trading hours, introducing Forecast X exchange, and enhancing retail-friendly platforms underscore its growth potential and reinforce its appeal across its client base. In this article, I will explore the key metrics and developments that shaped Interactive Brokers' performance in Q4 2024. Interactive Brokers is a global leader in the brokerage industry, renowned for its innovative technology, cost-efficient operations, and ability to adapt to dynamic market environments. The company provides access to over 150 markets worldwide and caters to a diverse client base, ranging from institutional investors to advanced retail traders. Its Trader Workstation platform and automation-driven low-cost structure make it a standout choice for professional and active investors. Interactive Brokers distinguishes itself with its multi-currency platform, allowing clients to trade across global markets without incurring conversion fees, an invaluable feature for international investors. Additionally, its wide range of account types enhances user flexibility. For example I recently opened a Family Advisor Account, which enables me to manage multiple family portfolios. With this, I opened accounts for some of my family members through my Family Advisor Account, managing their portfolios with their full permission. This type of feature fosters a sticky ecosystem that encourages users to consolidate more of their financial activities within the Interactive Brokers platform. There are still areas for improvement, but in my opinion, it demonstrates how Interactive Brokers is ahead of the competition, offering these features at a lower price. Beyond its core offerings, the company has made strides in innovation, creating Forecast X exchange, which allows trading on measurable outcomes, such as political or economic events. Regulated by the CFTC, this new asset class reflects Interactive Brokers' commitment to offering unique and forward-thinking investment opportunities. Another significant broker now offers access to IBKR's exchange, and I believe other brokers could follow this path. I believe the Forecast X exchange will gain broader adoption as it starts to attract more brokers and clients. In Q4 2024, retail clients drove the fastest account and client equity growth for the company, reflecting its success in broadening appeal beyond institutional investors. Recent upgrades to its mobile and desktop platforms have made Interactive Brokers more accessible to retail traders, allowing it to compete effectively with retail-focused platforms like Robinhood. At the same time, the company maintains its premium brand image by continuing to serve institutional investors with advanced tools and services. Interactive Brokers closed 2024 with strong results, solidifying its position. The company reported $1.39 billion in revenue, a 22% year-over-year (YoY) increase, and exceeded Wall Street expectations by delivering an EPS of $2.03, $0.19 above consensus estimates. NII reached a record $807 million for the quarter, despite the impact of a single 25 basis point rate cut in late 2024. The quarter benefited from increased margin borrowing and higher segregated fund balances from strong customer deposits driven by a continued risk on environment. With only one additional 25 bps cut anticipated in 2025, the rate environment now appears more favorable for Interactive Brokers' NII than previously expected, alleviating some of the pressure on NII. Commission revenue grew by 37% YoY, continuing to benefit from higher trading volumes and options activity. This diversification of revenue streams, particularly through trading-related fees, has allowed Interactive Brokers to offset much of the impact of the declining interest rate environment. The company also demonstrated operational efficiency, with execution, clearing, and distribution fees rising by 15% YoY, well below the pace of revenue growth. Customer growth remained robust during the quarter, with individual accounts and client equity continuing to drive momentum. Customer equity rose 33% YoY to $568.2 billion, outpacing account growth due to larger deposits and market revaluations. Daily average revenue trades also surged by 61% YoY to reach 3.1 million, supported by strong activity in options trading, which has been a critical driver of growth. Source: Author One of the significant drivers of client equity momentum, in my opinion, is the convenience of trading overnight hours. Interactive Brokers offers more than 10,000 US stocks and ETFs during overnight hours and is poised to offer options and futures once exchanges extend these hours. Although somewhat behind in cryptocurrency, IBKR currently offers only four coins: Bitcoin, Ethereum, Stablecoin, and Bitcoin Cash. Efforts are underway to increase this number to attract more customers, though regulatory constraints are a factor. The balance sheet remains in a healthy state, with leverage and liquidity metrics well within acceptable ranges. There are no share repurchase plans in the immediate future, which I believe is mainly due to the current stock price; therefore, management has opted to increase the dividend. Interactive Brokers is well-positioned for growth, but there are several risks to consider, primarily relating to interest rates and economic conditions. The improved interest rate outlook marks a significant shift from earlier in the year. With only one further 25 bps cut now anticipated for 2025, the company faces a more manageable macroeconomic landscape. Typically, a higher rate environment is better for NII margin. However, I think there might be more than one cut in 2025, although I estimate these cuts will be offset by increased commission revenue as traders become more active in a risk-on environment under the current administration. Interactive Brokers operates in a competitive environment, with key players such as Charles Schwab & TD Ameritrade, and Robinhood competing for market share. While Interactive Brokers has a clear edge in serving institutional clients and advanced retail traders, competitors continue to innovate and expand their offerings. The company must consistently differentiate itself through technology, cost efficiency, and unique products like the Forecast X exchange to maintain its leadership position. While the company's automation-driven cost structure and innovative product pipeline provide it with a durable advantage, its ability to adapt to evolving market conditions and client needs will be critical to sustaining growth. Source: Author From a valuation perspective, Interactive Brokers currently trades at a price-to-sales (P/S) ratio of 4x, with a forward P/S of 3.8x, compared to industry peers' averages of 5.2x and 4.2x, respectively. Its price-to-earnings (P/E) ratio stands at 29.7x, with a forward P/E of 26x, which contrasts with the industry average of 31.4x and 19.3x. This divergence between Interactive Brokers' current and forward P/E compared to the industry suggests that the company is valued fairly but might lack the growth premium of some competitors. The PEG ratio of 1.4x indicates that the company offers a reasonable valuation relative to its growth prospects. Additionally, its price-to-book (P/B) ratio of 4.9x aligns closely with industry peers, further supporting the case that the company is trading near fair value. Source: GuruFocus Compared to its historical value the company is trading at a higher P/E and forward P/E ratio. Last time, Interactive Brokers' was trading at around this multiple was after 2021. However, bear in mind that since then the stock has risen over 185%. Interactive Brokers has demonstrated growth and adaptability in a competitive industry. Its commitment to low-cost, technology-driven access to global markets, along with innovative products, positions it as a leading brokerage. These unique features enhance user engagement, making Interactive Brokers a broker of choice for many investors Given its strong market position, I view IBKR as fairly valued, possibly leaning towards overvalued. Potential upside could come from further market share gains, volume increases, and strategic innovations. Despite potential headwinds from interest rate changes, IBKR remains a stable long-term investment. Warning! GuruFocus has detected 7 Warning Signs with IBKR. This article first appeared on GuruFocus.
