Track market-moving stories before they get noisy

The S&P 500 (^GSPC +0.54%) index is trading at a Shiller Cyclically Adjusted Price-to-Earnings (CAPE) ratio of 41, the second-highest valuation in its history behind only the peak of the dot-com internet bubble in the year 2000. The index crashed by 49% when that bubble eventually burst, and while I'm not predicting a similar decline this time around, the risks to the current bull market are clearly mounting.

The Federal Reserve recently hiked interest rates to tame the rising inflation rate, which is generally bad news for stocks. Moreover, the artificial intelligence (AI) stocks that led the S&P 500 higher over the last few years have run into some turbulence, as investors question the sustainability of the data center spending boom.

It's entirely possible for those headwinds to spark a bear-market decline of 20% or more in the S&P 500. However, periods of heightened volatility tend to benefit one particular company: Interactive Brokers (IBKR +2.59%). Here's why its stock could be a great buy right now.

Image source: Getty Images.

One of the world's largest online brokerages
Interactive Brokers operates one of the world's most popular online investing platforms, where its clients buy and sell stocks, options contracts, futures contracts, and even cryptocurrencies. It had a record 5.58 million client accounts at the conclusion of the third quarter (ended Sept. 30), which was up by a whopping 35% from the year-ago period. That growth rate actually accelerated from 34% in the second quarter.

Client equity -- which represents the total value of all financial assets held in Interactive's custody -- also jumped by 27% to $964.7 billion. This number is important because Interactive earns volume-based commissions when clients buy and sell stocks or derivatives, so more equity means the platform has a bigger fee base.

In terms of transactions, Interactive processed 4.27 million daily average revenue trades (DARTS) during the third quarter, up 18%. But volume was a mixed bag; while clients were more active in the futures market compared to the year-ago period, they were less active in the stock and options markets. This is likely because the stock market traded in a relatively narrow range during the July to September period, with minimal volatility.

With that said, one metric suggests investors remained extremely bullish during the quarter. Interactive's outstanding margin loan balances ballooned by 36% to $105.2 billion, so clients still felt comfortable borrowing money to buy stocks and other financial assets. The company earns a significant amount of interest on those loans, so this revenue source might take a hit if a stock market downturn forces clients to deleverage.

Ideal conditions for faster revenue growth
Interactive generated $1.91 billion in revenue during the third quarter, a 15% increase from the year-ago period. There were two main components to that number:

$602 million in commission revenue, which grew by 12%.
$1.15 billion in net interest income, up 19%. This represented the interest Interactive earned on margin loans, client cash balances, and its own corporate cash balance.

If stock market volatility ramps up, I would expect commission revenue growth to accelerate as investors buy dips and hedge their potential downside risk using options and other derivatives. But net interest income might also grow at a faster pace in the near future as interest rates rise.

The Consumer Price Index (CPI) measure of inflation increased at an annualized rate of 3.7% in September, well above the Federal Reserve's 2% target. To make matters worse, it accelerated from 3.4% in August. The Fed already hiked interest rates once at its September meeting, but policymakers might feel compelled to execute further hikes to ensure inflation doesn't get out of control (like it did in 2022).

Therefore, although margin loan balances typically decline during bear markets, Interactive can still earn more net interest income overall if rates continue to rise. That will be especially true if cash balances climb as investors exit stocks and move to the sidelines for a while.

IBKR Interactive Brokers Group$85.06+$2.15 (+2.59%)

NASDAQ · As of 11:52 AM ET 10/21/26

Interactive stock looks attractive on a forward basis
Interactive generated earnings of $2.61 per share over the last four quarters, placing its stock at a price-to-earnings (P/E) ratio of 31.6. Therefore, it's currently more expensive than both the S&P 500 and Nasdaq-100 indexes, which trade at P/E ratios of 23.5 and 30.2, respectively.

But Wall Street's average estimate (provided by Yahoo! Finance) suggests Interactive could grow its earnings to $3.31 per share in 2027, placing its stock at a forward P/E of 24.9. That earnings estimate could even be revised higher if stock market volatility and higher interest rates persist over the next few quarters, so it's possible the stock is cheaper than it currently appears at face value.

As a result, I think Interactive stock might be a great buy right now.

On its third quarter of 2026 earnings call, held on Oct. 15, 2026, Interactive Brokers (IBKR -3.88%) announced record pre-tax profit and an annual dividend increase to $0.60 per share. The automated brokerage platform generated a 78% pre-tax margin while customer accounts grew over 30% worldwide. That operating leverage lets the business convert rising trading activity directly into shareholder cash. Three key takeaways from management highlight how the business continues to compound.

1. Record Profit Margin Powers Higher Dividend PayoutsInteractive Brokers converted revenue growth into expanding earnings, keeping its pre-tax margin, the share of revenue remaining before taxes, above 70% for eight consecutive quarters. Management used that extra cash to raise its annual dividend from $0.35 to $0.60 per share.

Pretax profit was a record, and our 78% pre-tax margin marked the eighth consecutive quarter with margins above 70%.
-- Milan Galik, President and CEO2. Artificial Intelligence Tools Accelerate Platform Automation and TradingManagement expanded its artificial intelligence tools by rolling out autonomous trading features. The updates let clients connect software through the model context protocol, a technical standard for software tools, to run automated trading strategies.

Our AI connector remains one of the fastest-adopted features we have ever introduced.
-- Milan Galik, President and CEO3. Wealth Management Offerings Target Displaced Financial AdvisorsInteractive Brokers is expanding its service for registered investment advisors, professional financial managers who direct client funds, by introducing tax-aware trading strategies. It's positioning its automated margin and lending infrastructure to win independent advisors seeking a new custodian.

Tax-aware accounts that use margin, short selling, and securities lending are a good fit for us.
-- Milan Galik, President and CEOLooking AheadCustomer accounts and total assets continue to expand across global markets, and management isn't hiding its satisfaction with the underlying momentum. The company holds structural advantages through its single global platform, low-cost margin lending infrastructure, and automated clearing capabilities. Management is watching regulatory expansion in local markets alongside client adoption of automated trading tools.

In conclusion, this was another financially strong quarter, reflecting our continued ability to grow our customer base and deliver on our core value proposition to customers, while simultaneously scaling the business.
-- Paul Jonathan Brody, CFOBy scaling software automation across account onboarding and customer service, Interactive Brokers expands its cost advantage as trading volumes grow. The firm's continuous platform upgrades position it to capture market share from traditional wealth custodians.

Our business strategy continues to be effective automating as much of the brokerage business as possible, continuously improving while expanding through new product introductions what we offer while minimizing what we charge.
-- Paul Jonathan Brody, CFOThe Motley Fool has positions in and recommends Interactive Brokers Group. The Motley Fool recommends the following options: long January 2027 $43.75 calls on Interactive Brokers Group and short January 2027 $46.25 calls on Interactive Brokers Group. The Motley Fool has a disclosure policy.

Interactive Brokers just launched Ethereum staking for U.S. clients, letting holders earn rewards Bitcoin simply cannot offer. But with ETH already lagging Bitcoin in performance, the question is whether this new income stream actually changes anything.

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Interactive Brokers (NASDAQ:IBKR | IBKR Price Prediction) has begun offering eligible U.S. clients the ability to stake Ethereum (CRYPTO:ETH) as of October 13, 2026. This marks the broker’s first venture into staking. With Interactive Brokers’ Ethereum staking service, clients can lock up their ETH, which the network uses to verify and record transactions, and earn new ETH in return. Because Bitcoin (CRYPTO:BTC) offers no similar rewards, this feature revives a long-standing debate among investors holding both cryptocurrencies.

As it stands, Bitcoin has recently outperformed Ethereum. On October 15, ETH was priced at $2,451, up 2.1% over the previous 30 days, while Bitcoin was at $82,306, up 8.4%. So, does staking Ethereum through a major broker like Interactive Brokers give ETH an advantage that Bitcoin doesn’t have?

Interactive Brokers Runs ETH Staking Through Zerohash, a Firm It Partly Owns

Clients can easily choose how much ETH to stake through the broker’s Client Portal. Interactive Brokers collaborates with Zerohash, a crypto infrastructure firm in which it owns a stake, to manage this staking process. When clients select their amount, Zerohash assigns the staked ETH to validators—computers that propose and verify new blocks on the blockchain. Zerohash adds all earned rewards to the client’s staked balance until the client decides to withdraw their ETH. Zerohash also holds this ETH in a dedicated account under the client’s name.

However, it’s important to note that assets in a Zerohash account do not have the coverage of the Securities Investor Protection Corporation (SIPC), which protects brokerage customers in the event of broker failure. Additionally, clients may lose funds due to “slashing,” a penalty Ethereum imposes on validators who break rules or go offline, and may face delays in receiving rewards or withdrawing funds.

Interactive Brokers and Zerohash share a fee capped at 30% of the rewards earned. Notably, Interactive Brokers led Zerohash’s $104 million funding round in 2025, which valued the company at $1 billion. As CEO Milan Galik explained, staking lets clients earn rewards on the cryptocurrencies they own, similar to its Stock Yield Enhancement Program, which lends clients’ shares to short sellers.

Despite this promising launch, Interactive Brokers provided no details on the reward rate, minimum staking amount, or withdrawal timeline. In the third quarter, Interactive Brokers had 5.58 million client accounts and $964.7 billion in client equity. Staking income will be added to its fee income, which is relatively small compared with interest earnings.

Clients Could Expect Around 1.56% Annually After Fees

Since the broker has not announced a specific reward rate, we can use Lido, a staking service that publishes rates daily, as a benchmark. Lido averaged 2.23% per year after fees during the week leading up to October 15. After applying Interactive Brokers’ full 30% fee, clients could keep about 1.56% of their staked amount, which equates to about 0.16 ETH annually on a 10 ETH stake, valued at about $380 at a price of $2,451.

This fee cap is only applicable if staking yields positive returns. If the stake earns nothing, there are no fees. However, rates can fluctuate with network conditions and validator performance, and all rewards are paid in ETH. With ETH down 1.9% in the week leading up to October 15, any annual gains appear minimal compared with losses.

Interactive Brokers Is Late to Staking Behind Robinhood and eToro

Furthermore, Interactive Brokers enters the staking arena later than competitors like Robinhood (NASDAQ:HOOD), eToro (NASDAQ:ETOR), and Trade Republic, all of which already offer staking services. Reports suggest that Morgan Stanley (NYSE:MS) is also seeking a national trust bank charter to provide similar services. Additionally, anyone with a crypto wallet can stake through Lido as well. Therefore, Interactive Brokers offers convenience, since clients can manage everything with one login and no external wallet, though they may miss out on more favorable terms than Lido stakers.

Bitcoin Offers No Native Yield, but It Still Outperforms ETH

Bitcoin operates on a proof-of-work model, meaning that miners expend energy to secure the network, and holders cannot earn rewards by locking up their coins. Any yield from Bitcoin comes from lending or similar products, adding a layer of counterparty risk if a borrower or platform fails.

Despite lacking native yield, Bitcoin has outperformed Ethereum. As of now, ETH is trading 50.4% below its August 2025 peak, while Bitcoin is only 34.7% below its October 2025 high. Since the end of 2025, ETH has fallen 18.2%, compared with Bitcoin’s 6.7% drop.

Ethereum has provided native staking for several years, so this yield gap has always existed, and it hasn’t stopped ETH from lagging behind Bitcoin. While Interactive Brokers’ launch offers a new platform for clients to earn the same rewards, it has set no specific target for staked ETH, and staking is available only for ETH.

Does Interactive Brokers Ethereum Staking Give ETH an Advantage Over Bitcoin? In summary, Interactive Brokers’ launch of Ethereum staking provides a new way for ETH holders to earn rewards at a major brokerage, but it isn’t enough to give ETH a clear advantage over Bitcoin right now. Although staking could reduce the amount of ETH available for trading, the broker hasn’t released any figures to support that claim. Furthermore, a meager 1.56% return pales in comparison to a 1.9% weekly decline. Ultimately, Interactive Brokers benefits the most, adding a new income stream through fees from this service.

Contact [email protected] for any questions or corrections.

Key Takeaways IBKR launched Ethereum staking for eligible clients, expanding its crypto services.Competitive crypto trading fees and broader offerings could attract clients and boost revenue.AI and global expansion support growth, but rising costs and regulatory complexity pose challenges.
Interactive Brokers Group, Inc. (IBKR - Free Report) is expanding its digital-asset capabilities by launching cryptocurrency staking, further strengthening its multi-asset trading platform. The initiative builds on the company’s investments in automation, artificial intelligence (AI) and global market access, potentially supporting client acquisition, deeper platform engagement and revenue growth. The company is expanding its AI capabilities through integrations with Claude, ChatGPT and Grok, alongside tools such as Ask IBKR, to enhance market research, portfolio analysis and trading.

Interactive Brokers has launched cryptocurrency staking for eligible clients through Zerohash. Eligible Interactive Brokers LLC clients can initially stake Ethereum through the Staking Dashboard in the Client Portal and monitor their staking activity. When earned, rewards will be credited as additional staked cryptocurrency and can compound as long as the position remains staked.

The launch builds on IBKR’s broader digital-asset initiatives, including cryptocurrency trading, stablecoin funding and transfers to external wallets. The company has also expanded its cryptocurrency offerings through additional tokens and partnerships with digital-asset infrastructure providers.

These initiatives will likely attract investors seeking access to traditional and digital assets through a single platform. Interactive Brokers charges cryptocurrency trading commissions ranging from 0.12% to 0.18% of trade value, subject to a $1.75 minimum per order, with no added spreads, markups or custody fees. Competitive pricing and an expanding range of services are expected to strengthen client engagement and support transaction-related revenues. However, staking’s financial contribution will depend on client adoption and the volume of eligible assets.

Meanwhile, IBKR continues to broaden global market access through Romanian and Korean equities, Brazilian futures and new funding options for Latin American clients through SafetyPay. The addition of cryptocurrency staking further diversifies its offerings and gives eligible clients another way to participate in digital-asset markets. Yet, rising non-interest expenses, regulatory complexity and sensitivity to interest rates remain challenges. While IBKR’s expanding product suite presents growth opportunities, its ability to manage costs and convert higher client engagement into sustained earnings growth will remain critical.

IBKR’s Price Performance & Zacks RankOver the past year, shares of Interactive Brokers have rallied 26.1% compared with the industry’s 10.5% growth.

One-Year Performance

Image Source: Zacks Investment Research

Currently, Interactive Brokers carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Similar Strategy of Other Financial FirmsWells Fargo (WFC - Free Report) is introducing tokenized deposits for corporate clients to enable real-time on-chain payments and settlements. The initiative could improve treasury management through programmable payments and support 24/7 transactions. Likewise, The Bank of New York Mellon (BNY - Free Report) has partnered with Galaxy Digital (GLXY - Free Report) to integrate staking into its Digital Asset Custody platform, subject to regulatory approval. Galaxy Digital will also serve as a design partner to enhance BNY’s blockchain infrastructure, strengthening its institutional digital-asset capabilities.

Although these initiatives may have limited near-term financial impact, they could help WFC, BNY and GLXY strengthen client relationships, expand digital-asset services and create additional fee-generating opportunities. Continued investment in blockchain-based financial solutions could support long-term growth as institutional demand for digital assets increases.

In its upcoming report, Interactive Brokers Group, Inc. (IBKR - Free Report) is predicted by Wall Street analysts to post quarterly earnings of $0.66 per share, reflecting an increase of 15.8% compared to the same period last year. Revenues are forecasted to be $1.83 billion, representing a year-over-year increase of 13.4%.

Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted upward by 2.9% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.

Prior to a company's earnings release, it is of utmost importance to factor in any revisions made to the earnings projections. These revisions serve as a critical gauge for predicting potential investor behaviors with respect to the stock. Empirical studies consistently reveal a strong link between trends in earnings estimate revisions and the short-term price performance of a stock.

While investors typically rely on consensus earnings and revenue estimates to gauge how the business may have fared during the quarter, examining analysts' projections for some of the company's key metrics often helps gain a deeper insight.

In light of this perspective, let's dive into the average estimates of certain Interactive Brokers metrics that are commonly tracked and forecasted by Wall Street analysts.

According to the collective judgment of analysts, 'Average interest-earning assets' should come in at $239.86 billion. The estimate compares to the year-ago value of $183.75 billion.

Analysts expect 'Customer Statistics - Total Customer DARTs' to come in at 4.27 million. Compared to the current estimate, the company reported 3.62 million in the same quarter of the previous year.

It is projected by analysts that the 'Other fees and services' will reach $88.24 million. The estimate compares to the year-ago value of $66.00 million.

The consensus estimate for 'Total non-interest income' stands at $707.14 million. Compared to the current estimate, the company reported $688.00 million in the same quarter of the previous year.

The combined assessment of analysts suggests that 'Commissions' will likely reach $588.90 million. Compared to the current estimate, the company reported $537.00 million in the same quarter of the previous year.

Analysts predict that the 'Other income' will reach $30.00 million. Compared to the present estimate, the company reported $85.00 million in the same quarter last year.

The consensus among analysts is that 'Total net interest income' will reach $1.12 billion. Compared to the current estimate, the company reported $967.00 million in the same quarter of the previous year.

View all Key Company Metrics for Interactive Brokers here>>>

Shares of Interactive Brokers have experienced a change of -3.8% in the past month compared to the +2.4% move of the Zacks S&P 500 composite. With a Zacks Rank #2 (Buy), IBKR is expected to outperform the overall market in the near future. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

Key Takeaways Interactive Brokers' client accounts rose 35% year over year to 5.6 million in September 2026.IBKR's margin loans climbed 36% year over year to $105.2 billion, supporting interest income.IBKR's automated platform and competitive execution costs provide a foundation for scalable growth. Interactive Brokers Group, Inc. (IBKR - Free Report) reported solid brokerage metrics for September 2026, with client accounts, equity and margin balances posting strong year-over-year growth. Although Daily Average Revenue Trades (DARTs) declined sequentially, trading activity remained above the prior-year level, highlighting continued client engagement.

IBKR’s Client and Margin Growth Strengthen Revenue OutlookInteractive Brokers ended September with 5.6 million client accounts, up 35% year over year. Client accounts also increased 2% from August. Ending client equity increased 27% year over year to $964.7 billion. Client credit balances rose 20% year over year to $186.2 billion, including $6.4 billion in insured bank deposit sweeps.

Ending client margin loan balances grew 36% year over year to $105.2 billion. The increase in margin loans was the strongest growth among the major balance-sheet-related brokerage metrics, providing a favorable backdrop for interest income, while rising client assets and accounts create a larger base for future trading activity.

September DARTs rose 6% year over year to 4.1 million despite a 4% decline from August 2026. The company recorded 159 annualized average cleared DARTs per client account, while the average commission per cleared commissionable order was $2.57.

IBKR’s execution statistics also highlight its competitive positioning. The average U.S. Reg.-NMS stock trade was approximately $23,713 in September, while the total cost of executing and clearing such trades for IBKR PRO clients was about 1.2 basis points of trade value, compared with 2.5 basis points for the rolling 12 months. Competitive execution costs will likely help support client retention and trading activity.

IBKR’s Automated Platform Supports Scalable GrowthInteractive Brokers’ highly automated operating model enables it to expand across products and geographies without a proportionate increase in operating costs. Its platform provides access to stocks, options, futures, currencies, bonds, funds and digital assets across more than 170 market centers in 40 countries and 29 currencies.

Continued investments in cryptocurrencies, prediction markets, artificial intelligence and international market access are expanding IBKR’s product reach and could further increase client engagement. The scalability of its technology-led model is reflected in compensation expense, which represented just 9.8% of net revenues in the first half of 2026. As client accounts, assets and margin balances expand, IBKR should be able to leverage its existing technology infrastructure to support revenue growth and operating efficiency.

Similarly, Interactive Brokers’ peers, Robinhood Markets (HOOD - Free Report) and The Charles Schwab Corporation (SCHW - Free Report) , are leveraging technology and scalable platforms to drive client and asset growth.

Robinhood is expanding across equities, options, cryptocurrencies, retirement accounts, and prediction markets, while investments in Robinhood Gold, crypto, and prediction markets are expected to boost activity and revenue opportunities. HOOD’s technology infrastructure will likely support growth while maintaining efficiency.

Meanwhile, Schwab spans brokerage, banking, wealth management and advisory services, generating revenues from trading, net interest income and asset management. Digital, wealth, and advisor investments are expected to support client acquisition and asset gathering at SCHW, while scale should improve efficiency.

Our Take on Interactive BrokersInteractive Brokers’ September metrics data remain encouraging, led by strong growth in client accounts, equity and margin balances. The company’s automated platform and competitive execution costs provide a strong foundation for scalable growth. However, earnings remain sensitive to interest rates, while ongoing investments in technology and expansion could keep expenses elevated. Overall, the latest operating trends support a favorable long-term outlook for IBKR, although its premium valuation and interest-rate sensitivity remain key considerations.

Over the past year, shares of Interactive Brokers have rallied 28.4% compared with the industry’s 8.8% growth.

One-Year Price Performance 

Image Source: Zacks Investment Research

IBKR currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here..

The Federal Reserve raised its target range for the federal funds rate by a quarter point on Wednesday, Sept. 16, to 3.75% to 4%. The vote was unanimous, and the new range went into effect Thursday.

It is the central bank's first rate increase since July 2023. As late as December, the Fed was still cutting.

Interactive Brokers (IBKR +1.17%) can attach a dollar figure to what that means. The automated global broker earns interest on its customers' idle cash and margin loans. And its latest quarterly filing lays out what a move like this is worth: A 0.25% rise in U.S. dollar interest rates adds about $81 million a year to net interest income, if maturing investments roll over at the new, higher rates.

Compared with what the business has been doing on its own, though, that's a more modest push than you might think.

Image source: The Motley Fool.

Interest on other people's cashNet interest income is Interactive Brokers' biggest revenue line. It totaled $1.06 billion in the second quarter, more than half of the company's $1.9 billion in total net revenues.

And an unusually high share of that money turns into profit. Net income amounted to $1.3 billion in the second quarter (about 70% of total net revenues), up 33% year over year.

The company invests the cash its customers keep uninvested and pays interest back on qualifying balances. It also charges interest on margin loans, priced at a benchmark rate plus a spread. When benchmark rates move, both sides move with them, and the $81 million is the company's estimate of the net impact.

The filing also says a corresponding quarter-point rise in non-U.S. dollar benchmark rates would add an additional $38 million a year. Of course, the Fed's decision covers just dollar rates, so for the moment, only the $81 million applies.

That $81 million amounts to about 2% of annualized net interest income, and about 1% of total net revenues. In other words, one hike hardly alters the revenue picture by itself.

Net interest income grew as rates fellThe bigger driver in this business, I would say, is balance growth. Showing how much customers' money matters, net interest income was up 23% year over year in the second quarter (a $197 million gain) even though the average federal funds effective rate fell to 3.63% from 4.33% a year before.

Falling rates narrowed the company's net interest margin to 1.93% from 2.07% over the same period. Net interest income grew all the same, because customers kept bringing money. Average customer credit balances climbed by $41.7 billion year over year, average margin loans grew by $35.7 billion, and average segregated cash and securities increased by $19 billion.

The falling rates did leave a mark, though. Year-over-year growth in net interest income slowed for two quarters in a row as benchmarks fell -- from 21% in the third quarter of 2025 to 20% in the fourth, then 17% in this year's first quarter. The second quarter's 23% broke that trend, with balance growth more than making up for the rate decreases.

How much does the hike matter?Balance growth, even net of falling rates, helped to produce a $197 million increase in quarterly net interest income over the last year. Maintained for four quarters, that pace works out to nearly $790 million a year -- almost ten times what the company expects one quarter-point hike to add. Put another way, the money customers keep bringing to Interactive Brokers has been worth much more to it than anything the Fed just did.

But the hike does change which way the rate lever points. For the last two years, decreasing benchmark rates were a drag this business needed to outgrow, and it did. Now rates are moving the other way. If they stay here or keep increasing, the rate side of the equation could finally work with the balance growth rather than against it.

Investors have not been waiting for the Fed, either. The growth stock is up about 37% in 2026, far ahead of the S&P 500 (^GSPC -0.11%), and at about $87 as of this writing, it trades at about 27 times next year's expected earnings.

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That valuation is arguably a bet on the balance growth continuing -- not on the Fed.

No one is paying a price-to-earnings multiple like that for a quarter point.

In the end, the $81 million is the first push the Fed has given this business in more than three years, and it lands on the company's largest revenue line. But I think the number worth tracking is the one that grew 23% while rates were falling.

The quarter point is nice to have. The balances have been doing most of the work.

Interactive Brokers (Nasdaq: IBKR), today announced three new programs at Interactive Brokers Securities Japan Inc. (IBSJ) designed to help investors manage trading costs and earn income on eligible cash and shares.

The centerpiece is a more cost-efficient approach to margin financing. When clients contribute cash toward a position, Interactive Brokers charges interest only on the amount financed, not the full position value. This approach is widely used in margin financing in markets around the world, and Interactive Brokers is now bringing it to investors in Japan.

The other two programs follow the same principle: putting more of an investor's account to work. Gaika+ allows eligible non-JPY cash balances to generate income in yen, while the Stock Yield Enhancement Program allows eligible clients to earn income by lending fully paid shares, with the lending rate fully disclosed. Together, these programs bring Interactive Brokers' global focus on cost efficiency and transparency to investors in Japan.

For example, consider a ¥10 million position funded with ¥5 million in client cash and held for 12 months at IBSJ's interest rate of 2.466%. Charging interest on the full ¥10 million position would cost ¥246,600 annually. Because IBSJ charges interest only on the ¥5 million financed, the actual cost is ¥123,300 — a savings of ¥123,300, or 50%.1

“Our goal has always been to help Japanese clients get more from every yen they invest,” said Ramir Roque Cimafranca, Head of Interactive Brokers Securities Japan Inc. “These three programs put more of a client's portfolio to work, — margin, cash, and shares — so every part earns its keep.”

IBSJ, an affiliate of Interactive Brokers Group, lets clients trade stocks, options, futures and CFDs across global markets from one platform built to keep costs low.

Interactive Brokers Securities Japan Inc. is a subsidiary of Interactive Brokers Group, an established global brokerage group. Interactive Brokers Group is Nasdaq-listed, is a member of the S&P 500, serves more than 5.4 million client accounts and reports more than USD 960 billion in client equity worldwide. IBSJ clients have access to products and technology developed within Interactive Brokers Group's global brokerage business.

The three programs:
(1) Margin Trading: Pay interest only on what is borrowed.
Clients can trade stocks on margin, including shorting Japanese and US stocks, at a significantly lower margin cost, because interest is charged only on the amount financed.

(2) Gaika : Put uninvested cash to work.
Clients earn daily income in yen on eligible non-JPY balances through automatic overnight currency swaps, with no added FX or market risk and no effect on cash available for trading. It applies only when the non-JPY currency interest rate is higher than the yen interest rate. Eligible balances can come from deposits or trading.

(3) Stock Yield Enhancement Program: Earn income on fully paid shares.
Clients can lend their fully paid shares to IBSJ, which in turn lends them to short sellers. Unlike many domestic programs that cap payouts, IBSJ pays clients 50% of the market-based borrow rate and discloses both the market rate and the client’s share. For example, if the market borrow rate is 4%, the client receives half of that rate, or 2% annually. On ¥1,000,000 of lent shares, that 2% payout would equal approximately ¥20,000 in annual income.

The best-informed investors choose Interactive Brokers.

For additional information, please visit: Interactive Brokers Securities Japan

1 Illustrative comparison based on a ¥10 million position funded with ¥5 million in client cash and held for 12 months. The 2.50% comparison rate is a reference rate based on Interactive Brokers’ internal research using published information as of September 11, 2026. The Interactive Brokers rate shown is the 2.466% Tier 1 rate applicable to the financed amount in this example as of September 11, 2026. Actual interest varies based on the applicable rate, amount financed, balance tier, position value, and holding period. Rates are subject to change.

About Interactive Brokers Group, Inc.:
Interactive Brokers Group, Inc. (NASDAQ: IBKR) is a member of the S&P 500. Its affiliates provide automated trade execution and custody of securities, commodities, foreign exchange, and prediction markets around the clock on over 170 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, Stockbrokers.com, and many others.

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View source version on businesswire.com: https://www.businesswire.com/news/home/20260915888234/en/

Interactive Brokers (IBKR -0.35%) ended June with $182.4 billion of uninvested client cash, up 27% year over year. Not only did the pile grow, but it was bigger still two months after the quarter closed, reaching $185.6 billion at the end of August. And until clients put that money to work, the automated global broker collects interest on it.

They may soon get a big occasion to put some of it to work. Anthropic's initial public offering (IPO) prospectus could arrive as soon as this week. In late August, The Information reported that the artificial intelligence (AI) company planned to release it just after Labor Day, with a market debut following as soon as the end of this month.

Investors project the Claude maker's valuation could land at about $2 trillion, CNBC has reported. They also expect the offering itself could top the largest on record -- the $85.7 billion SpaceX (SPCX -1.20%) raised in its June debut.

Anthropic's timing is a plan, not a scheduled event. There's no public prospectus, no price, and no share count yet.

But I think the setup is worth examining, because the broker just lived through a version of it. What does a huge listing do to this business?

Image source: The Motley Fool.

A cash pile that paysInteractive Brokers earns money on client cash in a straightforward way. It segregates customer cash as regulators require and invests the majority of that segregated cash in short-term U.S. government securities and related instruments. Clients earn interest on qualifying U.S. dollar balances, and the company keeps a spread for itself: half a percentage point below the benchmark federal funds rate.

At today's scale, net interest income is the company's biggest revenue line. It rose 23% year over year to $1.06 billion in the second quarter, helped by growing customer credit balances and a 67% jump in customer margin loans. That was more than half of the quarter's $1.9 billion of total net revenues. Notably, the growth came from bigger balances. The company's net interest margin narrowed to 1.93% from 2.07% a year earlier as interest rates declined, yet net interest income climbed anyway.

In other words, the cash isn't idle from the broker's perspective. Every uninvested dollar earns the company a little interest, and clients added about $39 billion of those dollars over the past year.

SpaceX's debut didn't drain the pileIf a giant IPO were going to pull client cash out of the business for good, the second quarter was the test. SpaceX went public on June 12, and Interactive Brokers participated directly. "In Europe, we directly offered the SpaceX IPO to eligible U.K. and European retail clients, providing access across multiple countries," said Nancy Stuebe, the company's director of investor relations, on the July earnings call.

The trading side delivered. Commission revenue hit a record $673 million in the second quarter, up 30% year over year and accelerating from 19% growth in the first quarter.

But the cash pile grew anyway. Client equity climbed to $962.8 billion in August, up 35% year over year, and customers traded more too -- daily average revenue trades rose 23%.

And a big reason the cash keeps pace is that new customers keep arriving. Client accounts reached 5.46 million in August, up 35% from a year earlier.

Will Anthropic be a repeat?Two things would have to happen first. The offering has to arrive at all. Anthropic's June filing was a confidential draft registration statement, and the company has said the proposed offering will depend on market conditions.

Interactive Brokers would also need access to the shares. The company hasn't said anything about distributing Anthropic's offering, and its SpaceX access was limited to eligible retail clients in the U.K. and Europe. I wouldn't assume a repeat until the company announces one.

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Still, the second quarter suggests shareholders don't need one. Heavier customer trading can lift commissions, while account growth keeps refilling the interest-earning cash pile.

Ultimately, I view an Anthropic debut as a potential bonus for this business rather than a swing factor. Even at a record $673 million, commissions remain the smaller of the company's two big revenue lines.

The stock, meanwhile, sits near $92 as of this writing, about 6% short of its 52-week high. And it trades at about 29 times what analysts expect it to earn next year -- arguably a rich price for a brokerage, although one attached to 28% net revenue growth and a pretax profit margin that expanded to 77% last quarter.

I wouldn't buy shares because of an IPO on the horizon. The account growth that keeps refilling that cash pile matters a lot more.

There is a good chance you've never thought of Interactive Brokers (IBKR -0.73%) as a high-growth stock.

That may be exactly why its performance is so interesting. During the past five years, Interactive Brokers' stock has gained nearly 500%, rising from about $15 to $93 (as of Aug. 24).

Interactive Brokers isn't an artificial intelligence (AI) stock. It doesn't make graphics processing units (GPUs). It doesn't build large language models. It doesn't run data centers. It operates an online brokerage.

So how did a financial service company that rarely dominates headlines produce a return that would make many technology investors jealous?

Image source: Getty Images.

The business has been quietly growing over the years Interactive Brokers may not appear to be a growth stock, but that doesn't stop the company from growing. Let's start with customer growth.

At the end of 2025, Interactive Brokers had about 4.4 million customer accounts. By the second quarter of 2026, that number had reached 5.19 million -- a 34% increase from a year earlier. Customer equity reached $930.3 billion, up 40%, while daily average revenue trades increased 36% to 4.82 million.

But the company hasn't just been increasing its customer base recently. By the end of 2021, it had only 1.7 million customer accounts and $374 billion in customer equity. So across almost every important metric, the company has been improving over the years.

Those numbers demonstrate that Interactive Brokers isn't simply a brokerage collecting commissions from the same customers year after year. It is adding customers rapidly, attracting more assets, and increasing activity across the platform.

And because its infrastructure is highly automated, the economics of that growth can be unusually attractive. For perspective, revenue grew by 126% between 2021 and 2025, while net income more than tripled during the same period.

That's the beauty of operating leverage: When revenue grows faster than expenses, more of each additional dollar can reach the bottom line. That's the first reason the stock has compounded so quickly.

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The market began to see a different kind of broker The second reason is more subtle.

For years, investors could reasonably put Interactive Brokers in the same broad category as other online brokers. But the company's economics increasingly made that comparison less useful.

Interactive Brokers provides access to more than 170 markets across 40 countries and 29 currencies. Customers can trade stocks, options, futures, currencies, bonds, funds, and other products on a single platform.

That breadth matters because it creates a powerful combination: More customers means more assets, which invites more activity, which generates more revenue, which drives more operating leverage.

The company also doesn't need every customer to be a high-frequency trader. A customer who brings substantial assets to the platform can generate value through multiple channels, including trading, margin lending, cash balances, and other services.

That makes the customer relationship more valuable than a simple commission transaction. And investors, unsurprisingly, rewarded the company with a higher valuation. Five years ago, the stock traded at roughly an 18 to 20 price-to-earnings (P/E) ratio. Today, it trades at a P/E of 37.

But can the next five years look anything like the last five? This is where the investment story becomes much harder. A 500% gain creates a dangerous temptation: extrapolation.

Investors may look at the past five years and assume another 500% is possible simply because the business is still growing rapidly.

But here's the thing. The stock price has already moved dramatically, and the valuation is much higher than it was five years ago. That means the next leg of the investment case will increasingly depend on earnings growth, rather than on investors simply discovering the company and assigning it a higher valuation.

Fortunately, the runway isn't necessarily finished. If Interactive Brokers can continue to expand its customer base, client assets, and trading activity while preserving its exceptional cost structure, earnings can continue to compound. That's what investors should watch.

What does it mean for investors? Interactive Brokers' 500% five-year return isn't about riding an AI story. It is an example of quiet compounding.

The company kept adding customers. Those customers brought more assets. More assets generated more activity and revenue. And the company's automated infrastructure enabled a large portion of that growth to translate into profit.

But the biggest mistake investors can make now is assuming that the stock's past performance guarantees its future. It doesn't. The easy part may already be behind us. From here, the business has to earn its way into a higher valuation.

Still, if the company continues to compound its earnings at anything close to its historical pace, the stock price can continue to rise.

Key Takeaways Schwab's client assets hit $13.1T, while active brokerage accounts rose 6% to 39.8M.Interactive Brokers' client equity jumped 40% to $930.3B, reflecting stronger growth momentum.Schwab trades at 15.27X forward earnings versus Interactive Brokers' 32.67X premium valuation. Charles Schwab (SCHW - Free Report) and Interactive Brokers Group (IBKR - Free Report) are two prominent players in the brokerage space, but their business models and growth profiles differ considerably. Schwab combines brokerage, wealth management, banking and advisory services at enormous scale, while Interactive Brokers relies heavily on its technology-driven trading platform, global reach and appeal among active and sophisticated investors.

Both companies are benefiting from healthy investor engagement, rising client assets and increased trading activity. However, the key question for investors is whether Interactive Brokers’ faster growth trajectory offers a better opportunity or Schwab’s massive client franchise and improving earnings profile make it the more attractive investment.

SCHW & IBKR Benefit From Strong Client GrowthSchwab continues to leverage its enormous scale to attract client assets. In the second quarter of 2026, the company gathered $118.7 billion in total net new assets. Total client assets reached a record $13.1 trillion as of June 30, 2026, up 22% year over year. Active brokerage accounts increased 6% to 39.8 million, while daily average trades rose 57% to 11.9 million.

This strong asset-gathering ability remains one of Schwab’s biggest competitive advantages. Its broad range of brokerage, banking, retirement, advisory and wealth-management products provides significant cross-selling opportunities and supports recurring fee revenues.

Interactive Brokers, however, has been expanding at a faster pace. At the end of the second quarter of 2026, client equity reached $930.3 billion, up 40% year over year. The company had roughly 5.19 million client accounts and recorded 4.82 million daily average revenue trades. Its platform provides access to more than 170 market centers across 40 countries, offering a significant advantage among sophisticated and internationally focused investors.

Thus, while Schwab dominates in absolute client assets and account scale, Interactive Brokers has the edge in growth momentum.

Competitive Edge: Interactive Brokers or SchwabInteractive Brokers’ proprietary technology infrastructure remains central to its investment case. Its highly automated platform allows it to provide trading across stocks, options, futures, currencies, bonds and other products at relatively low costs.

Its international reach also provides a long runway for account growth. Unlike Schwab, whose franchise is predominantly U.S.-focused, Interactive Brokers generates a meaningful portion of its business overseas and continues to expand across new markets and products.

The company has also broadened its offerings to include cryptocurrency access and prediction markets, which could help deepen client engagement. Nonetheless, international expansion brings additional regulatory, political and foreign-exchange risks. New products could also raise compliance and operational costs.

Schwab's competitive advantage is different. Rather than targeting primarily active traders, the company has developed an extensive financial-services ecosystem catering to retail investors, registered investment advisers and wealth-management clients. This broader platform makes Schwab less dependent on transaction-based revenues and supports long-term asset retention.

SCHW or IBKR: Which Has a Better Earnings Potential?The Zacks Consensus Estimate for SCHW’s revenues implies an 18.3% and 12.1% year-over-year rise for 2026 and 2027, respectively. The company’s earnings are expected to grow 32.7% in 2026 and 21.2% in 2027. Earnings estimates for both years have moved higher over the past month.

Image Source: Zacks Investment Research

The consensus mark for IBKR’s revenues suggests a year-over-year jump of 18% for 2026 and 13.3% for 2027. Also, the consensus estimate for earnings suggests a 22.8% and 18% increase for 2026 and 2027, respectively. Over the past 30 days, earnings estimates have been revised higher.

Image Source: Zacks Investment Research

SCHW vs. IBKR: Valuation Analysis and RisksValuation is particularly important when comparing the two stocks. Schwab is currently trading at a 12-month forward price-to-earnings (P/E) of 15.27X. Interactive Brokers stock, on the other hand, is currently trading at a 12-month forward P/E of 32.67X.

Image Source: Zacks Investment Research

Interactive Brokers’ impressive growth profile has historically commanded a premium. Investors are effectively paying for sustained account growth, trading activity, technology advantages and global expansion. Hence, any slowdown in client additions or trading volumes could pressure the stock's valuation.

Schwab's risks include interest-rate sensitivity, client cash allocation trends, intense competition and exposure to market levels through asset-based fees. Nonetheless, its massive client asset base, diversified revenue streams and improving funding position provide significant earnings visibility.

IBKR also faces regulatory and geopolitical risks because of its international exposure. Also, expansion into newer products increases compliance complexity.

Schwab or Interactive Brokers: Which Brokerage Stock to Buy?So far this year, shares of Schwab and Interactive Brokers have gained 12.3% and 52.7%, respectively. 

Image Source: Zacks Investment Research

Interactive Brokers stands out for its superior account growth, scalable technology platform, rising client equity and extensive global footprint. These strengths should support continued revenue and earnings expansion.

Meanwhile, Schwab appears to offer a more balanced investment proposition. Its more than $13 trillion client asset base, strong organic asset gathering, diversified wealth-management ecosystem and improving balance sheet economics provide several avenues for earnings growth.

Therefore, while Interactive Brokers appears to be the stronger pure-growth story, Schwab looks better positioned from a risk-reward perspective, particularly if balance sheet normalization continues to support operating leverage. For investors seeking a combination of scale, earnings visibility and long-term growth potential, Schwab emerges as the better brokerage stock at present.

Currently, SCHW and IBKR carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bull markets affect not only stock prices but also some underlying businesses in the economy. For instance, trading brokerages -- like Interactive Brokers (IBKR -0.73%) -- earn more revenue if more people around the globe trade their equities.

The bull market that began in late 2022 helped Interactive Brokers' stock generate a total return of over 525% in the last five years. That performance is actually crushing the performance of most technology and artificial intelligence (AI) stocks over the same time period.

But what happens when trading eventually slows? Let's discuss the dynamics of the financial brokerage sector and what it could mean for Interactive Brokers investors today.

Image source: Getty Images.

Revenue is built on trading volumes Interactive Brokers (IBKR) is a global financial asset trading platform. It makes money whenever a customer trades a stock, options, cryptocurrencies, or other financial assets. The more customers it has and the more trades each customer makes, the more money it will make.

The AI-driven bull market has been quite kind to IBKR's growth. Its total customers grew 34% year over year last quarter to 5.19 million, resulting in 30% growth in commission revenue. It also generates net interest income on cash balances and margin loans, which were up 23% year over year.

Profitability is also stellar, with a pretax profit margin of 77% last quarter. IBKR's stock price is up 506% in the last five years due to this stellar profit margin and the fact that it has been able to grow its customer accounts by 5x from around 1 million in 2020. This was helped by its improved product offering for international trading, as well as by the bull market during the pandemic and in the last few years around AI.

Cyclicality is the price of doing business A market-share-gaining stock brokerage like IBKR is likely to deliver fantastic financial performance in a bull market. Bear markets are not so kind. Sure, trading is still going on, but when stock prices fall, it generally means some individual traders exit the market, and trading volume falls. This turns a previous tailwind into a headwind for as long as stocks remain in the doldrums.

This is the business cycle for IBKR, and a bear market will eventually arrive. In 2022, when stocks were in a bear market amid interest rate hikes and recession fears, IBKR's customer account balance was nearly flat, underscoring how macroeconomic forces can affect its business. Still, the fact that it was able to stabilize its business during a bear market is a testament to its market share gains.

Data by YCharts. PE = price-to-earnings.

Should you buy IBKR stock? When evaluating brokerage stocks, one also needs to factor in interest rates and how they can affect cash being kept in brokerage accounts. How rates average out through both types of markets will help determine a brokerage's true long-term earnings.

For instance, more assets on the platform at IBKR have meant a growth in net interest income. And yet, this net interest income is currently growing more slowly than the overall customer count. This is because interest rates are down globally in the last year, meaning IBKR doesn't earn as much in interest income on idle cash balances. In a bear market, interest rates are likely to fall, which could affect the business's earnings growth.

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Another factor to consider is stock valuation. IBKR stock currently trades at a price-to-earnings ratio (P/E) of 38.5, and this is valuing it on trailing earnings in a multi-year bull market. If a bear market occurs and lasts for years, IBKR's customers, net interest income, and likely overall earnings may fall temporarily. This could make it a dangerous investment to buy at a P/E ratio close to 40.

That's why it's important to make any decision on IBKR stock with a long-term investment view. IBKR should continue gaining market share over the long term, which is why the stock trades at such a premium earnings multiple today. I don't think it is smart to buy into the stock at this premium P/E ratio, but investors should keep it on the watch list to see if it ever gets cheap again. That's when a long-term investment might make sense.

The financial world changed when the Federal Reserve began raising interest rates in 2022 to combat inflation. Some firms -- like the now-shuttered Silicon Valley Bank -- were ill-prepared for this interest rate rise. Others, like Interactive Brokers (IBKR -4.00%), had balance sheets ready to capitalize on rising rates.

Last quarter, IBKR's customer equity rose 40% to $930 billion, making it one of the fastest-growing brokerages in the world by asset value. Here's how it can capitalize on today's interest rates to generate earnings for shareholders.

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Exploding net interest income As a brokerage, IBKR earns interest income in a few ways. First, it can invest idle cash balances in short-term Treasury bonds, sharing some of the proceeds with customers before pocketing the rest. Second, it earns interest income by making margin loans to customers, backed by customers' equity, as well as short-sale loans.

Even though IBKR offers strong profit sharing on idle cash and low-margin loans compared to the competition, it is still printing gobs of interest income at today's interest rates. Its net interest income rose from $1.148 billion in 2021 to $3.56 billion in 2025, driven by growing customer account balances and rising interest rates, which allowed it to earn more per customer.

Last quarter, net interest income was $1.06 billion, up 23% year over year. It is actually the largest revenue segment for IBKR.

Image source: Getty Images.

Balancing long-term growth IBKR's stock price went up by 500% in the last five years, much of which is due to the explosion in net interest income feeding through to the bottom line. For any shareholder today, there is a risk that this tailwind over the last few years will turn into a headwind if interest rates fall.

At the same time, IBKR has a fantastic growth opportunity to attract more customers to its platform, which can offset any interest-income headwinds. Total customers grew 34% year over year last quarter to 5.19 million, with daily active revenue trades (DARTs) up 36%. Commission revenue grew 30% year over year to $673 million, which is highly correlated with customer and DART growth.

With its superior global trading platform, IBKR should steadily attract new customers in the years ahead. However, the company is currently trading at an elevated valuation, with a price-to-earnings ratio (P/E) of 37 in a time when interest income may be higher than normal. For this reason, investors should avoid buying IBKR stock for the time being.

Brett Schafer has positions in Interactive Brokers Group. The Motley Fool has positions in and recommends Interactive Brokers Group. The Motley Fool recommends the following options: long January 2027 $43.75 calls on Interactive Brokers Group and short January 2027 $46.25 calls on Interactive Brokers Group. The Motley Fool has a disclosure policy.

Key Takeaways Interactive Brokers' July DARTs rose 27% year over year to 4.43 million amid elevated market volatility.IBKR added 131,800 net new accounts in July, up 43% year over year, lifting total accounts to 5.32 million.IBKR shares rose 36% in three months, while 2026 and 2027 earnings estimates were revised higher. Last week, Interactive Brokers (IBKR - Free Report) reported robust operating metrics for July 2026, highlighted by strong growth in client trading activity and account additions.

Total client Daily Average Revenue Trades (DARTs) reached 4.43 million in July, up 27% from the prior-year period. The increase reflects heightened trading activity amid elevated volatility across equities, options and global futures markets. Shifting expectations around the Federal Reserve’s monetary policy, greater index dispersion and macro-driven portfolio repositioning also encouraged retail and professional investors to trade more actively, providing a meaningful boost to IBKR’s transaction volumes.

Beyond a favorable trading backdrop, Interactive Brokers continues to benefit from company-specific strengths. Its low-cost structure, competitive margin rates, ongoing product enhancements, streamlined account-opening process and highly efficient operating model are supporting strong client acquisition. In July, net new accounts surged 43% year over year to 131,800 and total accounts touched 5.32 million, further expanding the company’s client base.

IBKR is also broadening its addressable market by adding new products and capabilities designed to deepen client engagement and increase wallet share. At the same time, the company continues to expand its international platform, positioning itself to capitalize on growing cross-border investing activity and wealth creation across global markets.

These factors have supported sustained revenue growth. Interactive Brokers’ total net revenues recorded a CAGR of 22.8% over 2020-2025, aided by higher interest income, commission revenues and continued business expansion. With trading activity remaining healthy, client accounts increasing and engagement levels staying strong, IBKR appears well-positioned to sustain revenue momentum in the coming quarters.

IBKR Peers’ Business Diversification EffortsIBKR’s key competitors, Charles Schwab (SCHW - Free Report) and Robinhood Markets, Inc. (HOOD - Free Report) , have also been rolling out products and services to bolster market share.

Schwab is diversifying beyond brokerage through wealth management, banking, asset management, lending and alternative investments. This is broadening Schwab’s revenue base and deepening client relationships. These offerings attract more assets and encourage clients to consolidate finances on its platform, supporting higher engagement and creating additional opportunities for trading activity.

Robinhood is diversifying beyond traditional stock trading through crypto, retirement, credit cards, advisory services, prediction markets and international expansion. This broader ecosystem attracts new customers and assets while increasing platform engagement, creating cross-selling opportunities at Robinhood. This is supporting higher trading activity across equities, options, futures and digital assets.

IBKR’s Price Performance, Valuation & Estimate AnalysisShares of Interactive Brokers have rallied 17% in the past six months compared with the industry’s growth of 12.6%.

Image Source: Zacks Investment Research

From a valuation standpoint, IBKR trades at a forward 12-month price-to-earnings (P/E) ratio of 29.43, well above the industry average of 14.02. 

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Interactive Brokers’ 2026 and 2027 earnings indicates year-over-year growth of 22.8% and 18%, respectively. Over the past 30 days, earnings estimates have been revised upward to $2.69 for 2026 and $3.17 for 2027.

Image Source: Zacks Investment Research

Currently, Interactive Brokers sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Posted by Defense World Staff on Jul 26th, 2026

Bank of Nova Scotia increased its stake in Interactive Brokers Group, Inc. (NASDAQ:IBKR – Free Report) by 89.5% in the first quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The fund owned 275,306 shares of the financial services provider’s stock after acquiring an additional 130,043 shares during the period. Bank of Nova Scotia’s holdings in Interactive Brokers Group were worth $18,465,000 as of its most recent SEC filing.

Several other institutional investors also recently bought and sold shares of the stock. Norges Bank purchased a new stake in shares of Interactive Brokers Group during the fourth quarter valued at approximately $453,146,000. Orbis Allan Gray Ltd increased its stake in shares of Interactive Brokers Group by 178.8% in the second quarter. Orbis Allan Gray Ltd now owns 9,740,072 shares of the financial services provider’s stock worth $539,697,000 after buying an additional 6,246,715 shares during the period. Bank of America Corp DE increased its stake in shares of Interactive Brokers Group by 225.4% in the second quarter. Bank of America Corp DE now owns 7,594,906 shares of the financial services provider’s stock worth $420,834,000 after buying an additional 5,260,923 shares during the period. State Street Corp raised its holdings in Interactive Brokers Group by 23.2% during the 3rd quarter. State Street Corp now owns 18,648,758 shares of the financial services provider’s stock valued at $1,283,221,000 after buying an additional 3,517,729 shares during the last quarter. Finally, Invesco Ltd. boosted its position in Interactive Brokers Group by 44.1% during the 4th quarter. Invesco Ltd. now owns 8,288,379 shares of the financial services provider’s stock valued at $533,026,000 after buying an additional 2,534,772 shares during the period. 23.80% of the stock is currently owned by hedge funds and other institutional investors.

Insider Buying and Selling In other Interactive Brokers Group news, Director Lawrence E. Harris sold 26,000 shares of the firm’s stock in a transaction on Tuesday, April 28th. The stock was sold at an average price of $76.93, for a total transaction of $2,000,180.00. Following the completion of the transaction, the director owned 173,482 shares of the company’s stock, valued at approximately $13,345,970.26. This trade represents a 13.03% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through this link. Corporate insiders own 2.80% of the company’s stock.

Interactive Brokers Group Price Performance IBKR stock opened at $91.74 on Friday. Interactive Brokers Group, Inc. has a 1 year low of $58.95 and a 1 year high of $97.84. The company has a market cap of $155.62 billion, a P/E ratio of 36.70, a PEG ratio of 2.02 and a beta of 1.33. The firm has a 50-day moving average of $90.09 and a 200 day moving average of $79.44.

Interactive Brokers Group (NASDAQ:IBKR – Get Free Report) last announced its earnings results on Tuesday, July 21st. The financial services provider reported $0.69 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.64 by $0.05. The firm had revenue of $1.88 billion during the quarter, compared to analyst estimates of $1.80 billion. Interactive Brokers Group had a return on equity of 5.37% and a net margin of 9.94%.The business’s revenue was up 28.1% compared to the same quarter last year. During the same quarter in the prior year, the company earned $0.51 EPS. On average, equities research analysts expect that Interactive Brokers Group, Inc. will post 2.64 earnings per share for the current fiscal year.

Interactive Brokers Group Announces Dividend The company also recently disclosed a quarterly dividend, which will be paid on Monday, September 14th. Shareholders of record on Tuesday, September 1st will be issued a $0.0875 dividend. The ex-dividend date is Tuesday, September 1st. This represents a $0.35 dividend on an annualized basis and a yield of 0.4%. Interactive Brokers Group’s dividend payout ratio is 14.00%.

Wall Street Analyst Weigh In IBKR has been the topic of a number of analyst reports. Zacks Research upgraded shares of Interactive Brokers Group from a “hold” rating to a “strong-buy” rating in a research report on Wednesday, July 15th. BMO Capital Markets reiterated an “outperform” rating and set a $110.00 target price (up from $105.00) on shares of Interactive Brokers Group in a report on Wednesday. Keefe, Bruyette & Woods began coverage on Interactive Brokers Group in a research note on Wednesday, April 8th. They issued a “market perform” rating and a $75.00 target price on the stock. The Goldman Sachs Group set a $98.00 price target on Interactive Brokers Group in a research report on Friday, May 1st. Finally, Bank of America increased their price objective on Interactive Brokers Group from $83.00 to $106.00 and gave the stock a “buy” rating in a report on Tuesday, July 14th. Two analysts have rated the stock with a Strong Buy rating, seven have given a Buy rating and three have assigned a Hold rating to the company’s stock. According to data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and an average target price of $96.89.

Check Out Our Latest Research Report on IBKR

About Interactive Brokers Group (Free Report)

Interactive Brokers Group, Inc (NASDAQ: IBKR) is a global electronic brokerage holding company that provides trading, clearing and custody services to retail traders, institutional investors, proprietary trading groups and financial advisors. The firm offers direct access to a wide range of asset classes, including equities, options, futures, foreign exchange, bonds and exchange-traded funds across many international markets. Interactive Brokers emphasizes electronic order execution, automated trading and low transaction costs as core differentiators for its clients.

Its product suite centers on advanced trading platforms and infrastructure.

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The PDT Rule Is On Its Way Out: 5 Stocks That Stand to Benefit the MostInteractive Brokers Group NASDAQ: IBKR reported another record-setting quarter in the second quarter of 2026, with executives citing stronger trading activity, account growth, higher client balances and continued product expansion across global markets.

Nancy Stuebe, Director of Investor Relations at Interactive Brokers, said the company set records in commissions, net interest income and total net revenue, as well as total accounts, account additions, client equity and total client daily average revenue trades, or DARTs. She said the company’s pre-tax profit margin was 77%, marking the seventh consecutive quarter above 70%.

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MarketBeat Week in Review – 03/16 - 03/20Stuebe said the S&P 500 rose nearly 15% during the quarter, supported by strong technology earnings, while semiconductor names became a notable driver of client trading activity on the platform. “Our clients tend to embrace volatility and changing market dynamics as they provide opportunities in the market,” she said.

Revenue, Margins and Balance Sheet Paul Brody, Chief Financial Officer of Interactive Brokers, said the company produced record net revenues and pre-tax income in the quarter. Commissions rose 30% from the prior-year quarter to a new record, supported by higher trading volumes across stocks, options and futures.

Can Interactive Brokers Repeat Another Big Year?Net interest income increased 23% year over year to more than $1 billion, driven primarily by higher balances. Brody said margin borrowing increased as investors took on more risk, while the company’s segregated cash portfolio grew with new account additions. Those gains were partially offset by higher interest paid on customer cash balances.

Other fees and services totaled $87 million, up 40%, which Brody attributed mainly to strong options volumes and higher risk exposure fees. Excluding certain non-core items, other income was $66 million for the quarter.

Expenses also rose. Execution, clearing and distribution costs were $142 million, up 22% from the year-ago quarter. Brody said the increase was primarily due to the reinitiation of SEC regulatory fees, which totaled $34 million in the quarter. He said those fees are largely passed through and increase both commission revenue and execution costs, leaving profits unaffected.

Compensation and benefits expense was $182 million, equal to 10% of adjusted net revenues, down from 11% a year earlier. General and administrative expenses were $68 million, with expanded advertising contributing to the increase. Interactive Brokers had 3,265 employees as of June 30.

Total assets rose 36% year over year to $247 billion, driven by higher margin lending and segregated cash and securities balances. Brody said the company continues to have no long-term debt. Firm equity increased 20% to $22.3 billion.

Client Growth and Trading Activity Interactive Brokers reported client equity of $930 billion, up 40% year over year. Client uninvested cash balances rose 27% to a record $182 billion, while new accounts grew 34%. Stuebe said strong interest continues from both institutional and individual investors globally in opening and funding accounts.

Brody said total customer DARTs were 4.8 million trades per day, up 36% from the prior year. Options contract volumes rose 17%, futures contract volumes increased 2% and stock share volumes were up 14%.

Brody said the average U.S. Fed funds rate was down 70 basis points from a year earlier, but margin loan interest rose 39% and segregated cash interest increased 7%, supported by balance growth. He estimated that a 25-basis-point increase in the Fed funds rate would raise annual net interest income by $81 million, while a 25-basis-point reduction would lower it by the same amount. For non-U.S. benchmark rates, a 25-basis-point move would affect annual net interest income by about $38 million.

Product Expansion Includes Korea, Crypto and AI Stuebe said Interactive Brokers became the first e-broker to offer trading in Korea, providing access to the Korea Exchange and Nextrade, Korea’s 12-hour and overnight alternative trading system. She said Korean memory chip companies were highly sought after by clients.

In Europe, the company directly offered the SpaceX IPO to eligible U.K. and European retail clients, according to Stuebe. It also began offering cryptocurrencies throughout Europe, after previously offering crypto in the U.K. since 2024.

The company also released IBKR Connector in partnership with Anthropic, OpenAI and xAI. Stuebe said the integration allows clients to connect AI chatbots directly to their Interactive Brokers accounts to analyze portfolios, research opportunities and prepare orders for stocks, options and futures. She said the company is also expanding internal AI use in client service, compliance, surveillance and account onboarding.

In the question-and-answer portion of the call, Milan Galik, President and CEO of Interactive Brokers, said clients can use AI chatbots to access account data and prepare trading instructions, but those instructions currently require client approval before becoming executable orders. Galik said the company expects to offer fully autonomous agentic trading in the future, but only with guardrails and some form of client testing.

Prediction Markets, Introducing Brokers and Global Trends Interactive Brokers also launched IBKR Prediction Markets, a platform for trading event contracts across ForecastEx, CME and Kalshi. Stuebe said orders are routed to the venue offering the best net price, with a focus on economic, political and climate contracts. Galik said the company is not offering sports or entertainment contracts and is focused on events that may affect client portfolios.

Asked about ForecastEx, Thomas Peterffy, Founder and Chairman of Interactive Brokers, said the company will continue to focus on weather-related contracts and is adding potential hurricane landfall contracts, which he said could relate to insurance risk.

Stuebe said the introducing broker pipeline remains strong. Galik said the company had a double-digit number of integrations go live for the fourth or fifth consecutive quarter and has more integrations in progress than in the previous quarter. He said recent prospects include firms looking to expand into listed stocks, brokers seeking broader asset-class or regional coverage, and financial institutions moving to Interactive Brokers to reduce costs or access its product offering.

Asked about account growth by region, Galik said the company is “growing everywhere globally” across regions and account types. He said the launch of Korean trading was well timed and generated strong activity from the start.

Capital, Marketing and Risk In response to a question from Goldman Sachs analyst James Yaro, Galik said Interactive Brokers had about $10.3 billion in excess capital after buffers, up approximately $1.1 billion from the prior quarter. He said the company continues to review potential acquisitions, but “nothing so far stood out as worthy” of pursuing.

Peterffy said increased marketing spending has produced a corresponding increase in results, but not a higher yield than before. He declined to promise a sustained account growth rate, noting that the company has previously exceeded 30% growth after earlier expectations centered on 20%.

Asked about rapid growth in margin balances, Peterffy said Interactive Brokers continuously monitors client margin risk and is comfortable with current levels.

Galik also addressed Chinese regulatory actions affecting Tiger Brokers and Futu. He said Interactive Brokers has long complied with mainland Chinese regulations, does not advertise in mainland China and requires accounts to demonstrate residence outside mainland China. Following regulatory actions involving Tiger and Futu, he said Interactive Brokers saw an uptick in broker transfers and assets moving from those platforms.

On cryptocurrency perpetual futures, Galik said roughly one-third of Interactive Brokers’ crypto trading is now coming from those products, which allow clients to short cryptocurrencies and trade with leverage. He said the company will provide access to additional perpetual products where it sees meaningful volume and public interest.

About Interactive Brokers Group (NASDAQ:IBKR)Interactive Brokers Group, Inc NASDAQ: IBKR is a global electronic brokerage holding company that provides trading, clearing and custody services to retail traders, institutional investors, proprietary trading groups and financial advisors. The firm offers direct access to a wide range of asset classes, including equities, options, futures, foreign exchange, bonds and exchange-traded funds across many international markets. Interactive Brokers emphasizes electronic order execution, automated trading and low transaction costs as core differentiators for its clients.

Its product suite centers on advanced trading platforms and infrastructure.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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Key Takeaways IBKR is expected to post higher Q2 earnings and revenues when it reports results on July 21.Interactive Brokers saw June DARTs jump 53% y/y, with client accounts up 34% and client equity up 40%.IBKR's commission revenues and NII are projected to rise on strong trading and lending demand. Interactive Brokers Group, Inc. (IBKR - Free Report) is set to report second-quarter 2026 results on July 21, after market close. Its earnings and revenues are expected to have improved year over year.

In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate. Results were primarily hurt by a rise in expenses. However, an increase in revenues, growth in customer accounts and a rise in daily average revenue trades (DARTs) acted as tailwinds.

IBKR has a decent earnings surprise history. The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed in one, the average surprise being 11.7%.

IBKR’s Earnings & Sales Projections for Q2The Zacks Consensus Estimate for Interactive Brokers’ earnings has been revised 3.4% higher to 61 cents per share in the past seven days. The estimate indicates a 19.6% rise from the year-ago quarter’s reported number.

The consensus estimate for sales is pegged at $1.66 billion, suggesting a year-over-year increase of 12.2%.

Interactive Brokers’ Other Key Q2 EstimatesClient trading activity remained robust in the second quarter as investors actively repositioned portfolios amid shifting expectations surrounding artificial intelligence, persistent inflation, geopolitical uncertainties and a more hawkish Federal Reserve. Heightened volatility encouraged trading across equities, options, fixed income, foreign exchange and commodities.

IBKR’s monthly brokerage metrics point to continued momentum, with DARTs rising sharply year over year throughout the quarter, while client accounts and customer equity also expanded at a healthy pace. June alone recorded 5.27 million DARTs, up 53% year over year, alongside a 34% increase in client accounts and 40% growth in client equity.

Thus, strong trading volumes across stocks, options and futures, combined with continued customer acquisition, are expected to have driven higher commission income for IBKR. The Zacks Consensus Estimate for commission revenues stands at $605 million, implying 17.2% year-over-year growth.

The company’s net interest income (NII) is also expected to have been a major growth driver in the quarter. Customer margin loan balances continued to expand during the quarter, reflecting healthy demand for leverage amid strong equity markets, while customer credit balances remained elevated as IBKR attracted new assets. The Federal Reserve kept benchmark interest rates unchanged in the quarter but maintained a hawkish stance by signaling another potential rate increase later this year, allowing interest yields on margin loans and client cash balances to remain favorable. A solid lending scenario, along with stabilizing funding and deposit costs, is expected to have positively impacted IBKR’s NII in the quarter. The consensus estimate for NII is $956 million, indicating an 11.2% increase from the prior-year quarter.

Revenue from other fees and services is also expected to have improved, supported by a larger client base, higher market data subscription fees, increased exchange-related payments and greater demand for ancillary brokerage services as trading activity remained elevated. The consensus estimate for this line item is $74 million, suggesting a 19.4% year-over-year increase.

On the expense side, operating costs are expected to have increased as IBKR continues investing in technology infrastructure, platform enhancements, artificial intelligence capabilities, product innovation, cybersecurity, customer support and regulatory compliance.

What Our Model Unveils for IBKRAccording to our quantitative model, the chances of Interactive Brokers beating earnings estimates this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: Interactive Brokers has an Earnings ESP of +3.28%.

Zacks Rank: The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Finance Stocks Worth a LookHere are a couple of other finance stocks that you may want to consider, as these too have the right combination of elements to post an earnings beat in their upcoming releases:

Zions Bancorporation (ZION - Free Report) is scheduled to announce second-quarter 2026 results on July 20. The company carries a Zacks Rank #2 (Buy) at present and has an Earnings ESP of +0.53%.

Quarterly earnings estimates for Zions have been unchanged at $1.57 per share over the past week.

The Earnings ESP for Prosperity Bancshares (PB - Free Report) is +1.76%, and it carries a Zacks Rank #3 at present. The company is slated to report second-quarter 2026 results on July 29.

Over the past seven days, the Zacks Consensus Estimate for PB’s quarterly earnings has been unchanged at $1.54 per share.

Last week, Federal Reserve Chairman Kevin Warsh held his first Federal Open Market Committee (FOMC) meeting, making statements strongly suggesting a "higher for longer" interest rate policy, including possible rate hikes down the road.

For stock market investors, this could be concerning. Stocks, particularly speculative growth stocks, often trade inversely with interest rates. As rates go up, valuations could come down. Yet while Warsh's policy plans could create new headwinds for the broad market, these changes could be a potential boon for one major financial institution: Interactive Brokers (IBKR 2.06%).

Why? The discount broker, a pioneer in electronic trading, generates a majority of its overall revenue from interest. Hence, like with financial stocks and bank stocks, "higher for longer" bodes well for Interactive Brokers.

Image source: Getty Images.

Interactive Brokers and its not-so-secret revenue stream Like most brokerages, net interest income (NII) is a key revenue stream for Interactive Brokers. There are two ways brokerages generate NII. First, they collect interest on customer "float," or uninvested cash. They also earn interest income on margin loans made to customers.

For a major institution like Interactive Brokers, interest income can add up quickly. Each month, the company releases brokerage metrics and other financial information. According to the latest report, as of May 31, 2026, the company had client credit balances, or customer cash balances, totaling $180.1 billion, a 34% increase over the past year.

Client margin loan balances totaled $100.9 billion, a 65% increase over the past year. During the first quarter of 2026, NII totaled $904 million, making up around 54% of the company's total net revenue. With the company reporting pretax profits of around $1.3 billion, or 77% pretax margins, the lion's share of this NII flows straight to the bottom line.

Interactive Brokers also continues to benefit from customer growth. Last month, for instance, the company had nearly 5 million client accounts, a 32% increase compared to May 2025, and a 3% increase compared to the prior month.

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Interactive Brokers is a compounding machine Considering customer and NII growth, it's easy to see how this company has been a compounding machine in recent years. Since 2022, the company's revenue has surged from $4.2 billion to $10.6 billion, while earnings per share went from $0.94 to $2.34. The company's quarterly cash dividend has grown significantly during this time, from 2.5 cents to 8.8 cents per quarter, a more than 250% increase.

Currently, sell-side analysts forecast revenue growth of around 14.5% and 12.5%, respectively, with earnings expected to climb from $2.19 per share in 2025 to $2.51 per share in 2026 and to $2.88 per share by 2027, representing average annual growth of 14.7%.

Such earnings growth could translate into further strong dividend growth, especially as Interactive Brokers' payout ratio remains low, at around 13.7%. Shares may be pricey at nearly 40 times forward earnings, but if high growth persists, they may experience, at worst, moderate multiple compression.

Continued double-digit earnings growth could counter a drop in forward valuation to the low- to mid-30s. This, coupled with the 0.37% dividend, could yield steady, solid total returns. With this, consider Interactive Brokers one of the best growth stocks to buy and hold.