long ibkr

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    • Tue Jul 8th 10:26 AM
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      Brokerage Stocks: Trouble on the Horizon?
      I think most of this discussion is failing to understand IBKR's business. As previously mentioned by one post, they are a MARKET MAKER first and foremost. 75% of their business is market making, most of which is in exchange-listed options. So, their performance is tied most closely to volume of options trading and levels of volatility. Using the OCC daily volume numbers and the VIX as proxies for those two elements, one can clearly see why IBKR is expected to perform ahead of year-ago quarter. Bear in mind analyst consensus last quarter was $0.50 and they delivered $0.66. Simply making the assumption that their brokerage biz will disappoint and their trading biz will perform in line with a year ago is a rather erroneous assumption. We're in a credit crunch/bear market, remember? Active traders, the customers of IBKR's brokerage, are most likely to trade actively around this kind of market. And the market making biz should be licking its chops at the options volume and implied volatility levels. I guess InglefoX is just making the short case to talk his book, but I don't find it very compelling.

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