Steve Sanders is EVP of Marketing and Product Development at Interactive Brokers.
What were the key theme(s) for your business in 2023?
Our clients benefit from the broad range of global products, tools and resources available through our platform. Clients can trade across asset classes and geographies and use both existing and new products and services to discover investment opportunities worldwide regardless of market dynamics. Plus, we provide many educational materials through the IBKR Campus website so that traders can stay on top of market events as trading conditions evolve.
This past year, we saw rising investor demand for options trading and launched the IBUSOPT order destination to help our retail and institutional clients achieve better price execution on their options trades. IBUSOPT, a new order destination for US equity and index options, is designed to give clients the opportunity to interact with IBKR SmartRoutedSM order flow and have their orders filled in between the National Best Bid/Offer (NBBO). The IBUSOPT destination helps traders execute options trades more efficiently and effectively and helps achieve better executions by providing traders with more control over their trades by supporting different order types.
Another key theme from 2023 was how the rising interest rate environment impacted our clients. We were pleased to provide our clients with competitive interest on uninvested cash balances which we conveniently pay directly to client brokerage accounts making cash instantly available to trade or transact. While interest rates available at most other brokerages are negligible, the market interest paid by Interactive Brokers is calculated using the Fed Funds rate as the reference rate for USD minus 0.5%. Our clients can currently earn up to USD 4.83% on instantly available cash balances over USD 10,000, and when interest rates rise, our clients can earn more.
We also saw an uptick in bond trading on our platform driven by the increase in rates, as clients added to their fixed-income holdings through the IBKR Bond Marketplace. Our Bond Marketplace is one of the largest electronic bond marketplaces in the industry and offers investors a vast universe of over 1 million bonds globally, as well as low and transparent commissions and no market-ups or built-in spreads.
Lastly, investor education is a theme we focus on each year but revamping the IBKR Campus site in 2023 underscored our commitment to empowering investors worldwide to become better-informed traders. IBKR Campus is a website that provides free educational resources to all levels of investors including access to courses, webinars, podcasts, and market commentaries. The redesigned site is more user-friendly and lets investors easily find information to learn about trading, financial markets, and our trading tools.
What was the highlight of 2023?
As a truly global broker, we consider the objectives of active traders and institutional investors around the world. In 2023, we were excited to expand our Overnight Trading Hours service, which now lists over 10,000 US stocks and ETFs, as well as US Equity Index options. This service benefits our clients globally, but particularly Asian, and European investors seeking access to US Equity Markets during their trading day. We recognize that global investors need to respond to market-moving news whenever it happens and not just during US market hours to take advantage of trading opportunities around the clock.
What are your expectations for 2024?
As individuals worldwide continue to realize the benefits of participating in financial markets, we think investors will seek out trading platforms with the flexibility to invest in many asset classes worldwide. Unlike other brokers, we serve clients in over 200 countries and territories worldwide and offer access to 150 markets and the ability to trade global stocks, options, futures, currencies, bonds, funds and more from a single unified platform. Clients can fund accounts and trade in a myriad of different currencies making it simple to deposit in a local currency and create diversified portfolios across markets and products. This may be particularly important for clients affected by political or market uncertainty looking to trade into US markets, or for any investor looking to trade around the world.
