Interactive Brokers

Interactive Brokers LLC (IB) is an American multinational brokerage firm. It operates the largest electronic trading platform in the U.S. by number of daily average revenue trades. The company brokers stocks, options, futures, EFPs, futures options, forex, bonds, and funds.

The company is headquartered in Greenwich, Connecticut, and has offices in four cities. It is the largest subsidiary of the brokerage group Interactive Brokers Group, Inc., which was founded by Chairman Thomas Peterffy, an early innovator in computer-assisted trading. IB is regulated by the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, the New York Stock Exchange, the Commodity Futures Trading Commission, National Futures Association, Chicago Mercantile Exchange and other self-regulatory organizations. The company is a provider of fully disclosed, omnibus, and non-disclosed broker accounts and provides correspondent clearing services to 200 introducing brokers worldwide. The company serves 607,000 client brokerage accounts, with US$128.4 billion in customer equity. Interactive Brokers Group owns 40 percent of the futures exchange OneChicago, and is an equity partner and founder of the Boston Options Exchange.

The original organization was first created as a market maker in 1977 under the name T.P. & Co., and was renamed Timber Hill Inc. in 1982. It became the first to use fair value pricing sheets on an exchange trading floor in 1979, and the first to use handheld computers for trading, in 1983. In 1987, Peterffy also created the first fully automated algorithmic trading system, to automatically create and submit orders to a market. Between 1993 and 1994, the corporate group Interactive Brokers Group was created, and the subsidiary Interactive Brokers LLC was created to control its electronic brokerage, and to keep it separate from Timber Hill, which conducts market making. In 2014, Interactive Brokers became the first online broker to offer direct access to IEX, a private forum for trading securities. Currently about 16.6 percent of the company is publicly held, while the remainder is held by employees and their affiliates; Thomas Peterffy is the largest shareholder.

Interactive Brokers is the largest electronic brokerage firm in the US by number of daily average revenue trades, and is the leading forex broker. Interactive Brokers also targets commodity trading advisors, making it the fifth-largest prime broker servicing them. IB is regulated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the New York Stock Exchange, the Financial Conduct Authority and other regulators and self-regulatory organizations. It provides correspondent clearing services to 200 introducing brokers worldwide. The company serves 720 thousand client brokerage accounts, with $170.1 billion in customer equity. Interactive Brokers Group has $75 million in tangible assets, including $24 million in computer equipment. Currently about 17.3 percent of the company is publicly held, while the remainder is held by employees; Thomas Peterffy is the largest shareholder.

Peterffy has described the company as similar to Charles Schwab Corporation or TD Ameritrade, however, specializing in providing brokerage services to larger customers and charging low transaction costs. He also described the company's focus on building technology over having high sales, with technology often used to automate systems in order to service customers at a low cost. The company can afford to focus on automation and acquiring customers over focusing on financial results, as 82.7% of the company is held by employees. It has offered direct market access to Australian contracts for difference since 2008. Mobile transactions account for about 10% of the company's retail orders. Investors can open accounts online and there is no minimum required, though maintenance fees are sometimes charged. New customers are directed towards Traders' Academy, the company's education resource, which includes series of videos on IB's products and trading tools.

Interactive Brokers Group has 11 directors, including Thomas Peterffy, chairman of the board of directors, who as the controlling shareholder is able to elect board members. As of 2016, the company has 1,649 employees, and 1,365 of them hold company stock. Interactive Brokers employs computer programmers and IT workers; programmers outnumber other employees five to one. As of 2015, approximately nine percent of employees work in legal or regulatory compliance departments.

Among the company's directors are Lawrence E. Harris, a professor at the University of Southern California's Marshall School of Business, and who was chief economist of the Securities and Exchange Commission. Among its former directors are Hans Stoll, founder and director of the Financial Markets Research Center at Vanderbilt University, and an author and former president of the American Finance Association, and Ivers Riley, former chairman of the International Securities Exchange, CEO of the Hong Kong Futures Exchange, and chief developer of SPDR funds.

Interactive Brokers maintains a 163,510-square-foot (15,191 m2) headquarters in downtown Greenwich, Connecticut.  Traders and programmers work in units with several monitors and more overhead, while several network engineers staff an area round the clock, six days a week. The company also has offices in Budapest, Chicago, Dublin, Hong Kong, London, Luxembourg, Montreal, Mumbai, San Francisco, Singapore, Sydney, Tokyo, Toronto, West Palm Beach, and Zug.  More than half of the company's customers reside outside the United States, in approximately 200 countries.