Paul Price

Interactive Brokers: Getting Richer by Getting 'Broker'

This write-up on IBKR was in this week's Barrons Dec. 29, 2008 issue:

OPENING DOORS TO ASIAN MARKETS. Interactive Brokers (interactivebrokers.com) is making a big push into the Asian markets. The firm acquired Moriai Securities, a Japanese broker-dealer, earlier this month. That will make it possible for Japanese institutions to access IB's technology. By early 2009, domestic Japanese customers will be able to trade.

The firm also received Commodity Futures Trading Commission approval a few weeks ago, allowing its U.S. customers to trade the KOSPI 200 Futures on the Korean Stock Exchange. Andrew Wilkinson, IB's director of media relations, notes that the KOSPI is one of Asia's most liquid markets, with an average of 24.5 million contracts traded daily in the first half of 2008. Volume dropped in October and November to about 8.5 million contracts a day, though that's still a lot of activity. Trading KOSPI options is limited to qualified institutional clients at this stage.

Wilkinson says interested clients need a broker with access to the Korean Exchange, either as an individual member or via an affiliate. IB has taken the latter path. Wilkinson also believes IB is one of the few, if not the only, broker offering this service to U.S. customers. We searched our database and couldn't find another one offering this particular contract.

IB has announced the launch of Australian CFDs (contracts for difference) on the Australian Stock Exchange and opened an office in Mumbai, India, where it expects to make its first customer trade in the local market by year-end. It's also begun making markets in Taiwanese equities and is trying to establish a Chinese office. Thomas Peterffy, IB's CEO and chairman, says, "We want to hire more software people -- computer programmers -- and expand our sales force."