Interactive Brokers Group, Inc. (IBKR) – Stock Valuation

by David Kim, Scuttle Blurb

Interactive Brokers Group, Inc. (IBKR) began as an electronic market making platform for professional traders at a time when market making was still mostly being conducted via open outcry.  Its foundation of technology and automation ensured transactions at the lowest cost and fulfillment at the best possible price, core capabilities that it later brought to bear in launching its prime brokerage business.  Today, the prime brokerage business, which accounts for the vast majority of the company’s value, charges commissions and financing costs that other discount brokers don’t even come close to matching – the commission rate to trade 100 shares on IBKR is $1.00 compared to $8-$10 on E-Trade, Fidelity, optionsXpress, Schwab, and TD Ameritrade.  And even...