OXPS Forum Topics
- All Comments on OXPS
- General Discussion on OXPS
- Brokerage Stocks: Trouble on the Horizon? [view article]
- Three Cheap 'Transactional' Brokerage Firms [view article]
- OptionsExpress Reports Solid Earnings, Now Taking Market Share [view article]
- OptionsXpress Holdings: Overall Market Declines Could Spell Trouble [view article]
- Jim Cramer's Mad Money Lightning Round Picks, 6/13/07 [view article]
- Interactive Q&A: Ned Bennett, Co-Founder and EVC of optionsXpress [view article]
- optionsXpress: Onwards and Upwards [view article]
- Stocks Covered by Seeking Alpha on Internet Stocks [view article]
loading ...Recent OXPS Articles
- Earnings Preview: OptionsExpress Holdings
- Brokerage Stocks: Trouble on the Horizon?
- Three Cheap 'Transactional' Brokerage Firms
- OptionsExpress Reports Solid Earnings, Now Taking Market Share
- E*Trade Surges on Buyout Rumors
- OptionsXpress Holdings: Overall Market Declines Could Spell Trouble
- Great Quarter for OptionsXpress
- Online Brokers Will Be Acquired By Banks and Brokerages Says optionsXpress Founder
- Interactive Q&A: Ned Bennett, Co-Founder and EVC of optionsXpress
- Deep Discount Broker Profits May Be Hurt By Market Volatility
- Full List of Articles »
Brokerage Stocks: Trouble on the Horizon? [view article]
Did I say something "this company has pretty good visibility", and therefore the likelihood of them missing badly was poor? Being short OXPS at this price has terrible risk/reward, especially if your short thesis is: "I think they're going to miss". ReplyTiedeman
Brokerage Stocks: Trouble on the Horizon? [view article]
All brokerage stocks will sink this summer. They are doing so now. ReplyBrokerage Stocks: Trouble on the Horizon? [view article]
I do not know much about schwab and the other broker you mention, but you I am extremely familiar with the insides of IBKR. Your 'analysis' is the typical back of the envelope supposition that gets amateur investors very deep trouble in the stock market. The current environment is actually quite favorable to IBKR as their profitability is substantial driven by volatility, and often hurt by a high level of front running which occurs when there is a high level of M&A activity (which has fallen off a cliff during the past 12 months). The do not take net long or net short positions and close each day with a fully matched position comprised of listed securities. They do not, btw, make a lot of money on cash balances like other brokers who offer only puny interest rates on cash. They are uniquely poised to add market share at this point and have the luxury of cherry picking better quality customers rather than the lowest common denominator of the hedge fund world. As for customer service, if you are looking for Chas. Scwab-like customer service (i.e. someone to tell you how to fill out your deposit slip) you would not be satisfied with IBKR, but if you are a small sophisticated institutional investor, you will enjoy an equally sophisticated counterpart.I agree with the other commentator who suggested Seeking Alpha should raise the bar... this kind of 30,000 foot 'analysis' is really not helpful and belongs on the yahoo bulletin boards. Reply
Brokerage Stocks: Trouble on the Horizon? [view article]
What a terriable article. Why does seekingalpha let stuff like this on their site? ReplyBrokerage Stocks: Trouble on the Horizon? [view article]
You forgot to mention that Interactive Brokers has the worst customer service in the industry which drives away all of the good clients. They surely are the weakest of the group. They are also subject to devastating trading losses due to insufficient internal controls. ReplyBrokerage Stocks: Trouble on the Horizon? [view article]
I think most of this discussion is failing to understand IBKR's business. As previously mentioned by one post, they are a MARKET MAKER first and foremost. 75% of their business is market making, most of which is in exchange-listed options. So, their performance is tied most closely to volume of options trading and levels of volatility. Using the OCC daily volume numbers and the VIX as proxies for those two elements, one can clearly see why IBKR is expected to perform ahead of year-ago quarter. Bear in mind analyst consensus last quarter was $0.50 and they delivered $0.66. Simply making the assumption that their brokerage biz will disappoint and their trading biz will perform in line with a year ago is a rather erroneous assumption. We're in a credit crunch/bear market, remember? Active traders, the customers of IBKR's brokerage, are most likely to trade actively around this kind of market. And the market making biz should be licking its chops at the options volume and implied volatility levels. I guess InglefoX is just making the short case to talk his book, but I don't find it very compelling.Reply
investing
Brokerage Stocks: Trouble on the Horizon? [view article]
First of all, capital "flees" the market as people sell equities (evidenced in a falling market) and move into cash.OXPS more than IBKR or SCHW relies on options trading and yes it is true that people can buy put options in falling markets; however, if you look to the CBOE VIX you'll see that people have been forced to pay some extremely high premiums over the past quarter in order to obtain options. These high premiums eat into the available option capital and thus cut the number of commissions that can be earned by the options brokers.
One of the most important things to remember when talking about the DARTs is that the current released DARTs only represent part of the quarter. Don't get a false sense of security in the DARTs because they cannot tell the entire picture.
Of course you can debate all you like, but the real answer will only come when the company reports and so I think it's best to let the actual earnings solve the debate. If you wish to discuss this further then I encourage you to visit my blog. Reply
Brokerage Stocks: Trouble on the Horizon? [view article]
The only forward looking numbers I cited were earnings - on a trailing basis P/sales and P/ebitda are at all time lows. Furthermore, this company has pretty good earnings visibility, at least into the next quarter. This is because they provide us with monthly updates on DARTs, new accounts, margin balances, etc. This means estimates for the current quarter already have 2 months of information built into them. I've got my own model for estimating earnings, it has performed quite well, and it's currently pointing towards the high side of analyst estimates for this quarter.Could you please elaborate on the "current conditions" under which OXPS can't make more money? I've already pointed to the high correlation of OXPS revenues to CBOE volumes to show how it's quite easy to see revenues and net income increasing year over year. Your short thesis does go beyond "I've got a feeling", doesn't it?
Here's one thing to think about: How, exactly, does capital flee the market? Hint: It doesn't take the bus. Reply
investing
Brokerage Stocks: Trouble on the Horizon? [view article]
I will say that IBKR is certainly the strongest of the bunch and I used the term "some" to describe the prop trading because I was lumping the three together. It is indeed true that IBKR relies probably more heavily on prop trading than retail investing. In my article I'm taking the assumption that their prop trading numbers will be equal to their numbers from last year (which may not even be possible) and that their retail numbers are what will be responsible for a miss in earnings.For Doug Estadt, I see the fact that IBKR is undergoing a "slick new ad camgaign" as a sign of a weakened retail business. They are trying to attract more customers by outadvertising the competition.
And there is no doubt in my mind that while IBKR is the strongest of these three there is also no doubt in my mind that OXPS is the weakest. Mr. NjordWind, you have cited forward looking numbers that are based upon analyst estimates and just because a stock is at its lows does not mean that it cannot sink any further. Under the current conditions it just doesn't seem possible for OXPS to have made more money this year than last and I expect a big miss. I hope for your sake that you're right, but I see all of the evidence pointing to the downside. Reply
Brokerage Stocks: Trouble on the Horizon? [view article]
Whoops: Disclose needed - long OXPS. ReplyBrokerage Stocks: Trouble on the Horizon? [view article]
Sorry, but must disagree with you on being negative IBKR, Interactive Brokers are growing rapidly and their slick new ad campaigns on CNBC and Bloomberg emphasizing they are approx 15 x better executing trades than most brokers is surely helping them gain new accounts. And they seem to be geared toward more sophisticated clients who will be shorting and trading in int'l markets which doesn't mean their revenues will be declining.Reply
Brokerage Stocks: Trouble on the Horizon? [view article]
Can't say I agree with your short thesis. I don't know a lot about IBKR and even less about SCHW, but I've spent a fair amount of time on OXPS. I've noticed their revenues (and, because of their very stable margins, net income) correlate very highly with quarterly CBOE volumes. The model could use a little work because I don't break out PFOF and interest income, which will be declining to flat in the current environment. However, 2Q08 CBOE volumes were up 27% versus the prior year period, meaning commissions and other brokerage income should remain strong. We've also seen DARTs, net new accounts and margin balances hang in very well during April and May, although admittedly June was a very bad month, and may have scared some people away. Furthermore, the retail investor has hung in thus far, and of course options can be used in either market direction. Bottom line is I've got several indicators pointing towards upside to the 2Q numbers. Do you have something you can point to besides "The stock and market have gone down and thus I don't think they'll hit numbers"? Not trying to be antagonistic, I'm just looking for a little more detail.On another note, if you've been short these stocks for awhile,well done, good trade thus far. If you've just initiated the positions recently, however, I think you're in the wrong place. In addition to everything I mentioned above, OXPS is currently trading at all-time lows in P/Forward earnings, P/S, P/EBITDA, pretty much every valuation measure, and they numbers aren't even that high: 12X forward earnings and 7.7X EBITDA. Margins have remained steady. The stock has already fallen 37% this year (after a 49% rise in 2007); still, I think you missed your chance. Reply
Brokerage Stocks: Trouble on the Horizon? [view article]
You need to do some more work on IBKR, they make more than 'some' money from prop trading. THEY ARE MARKET MAKERS WORLDWIDE.Lumping them in with the others is poor workmanship.
They may or may not beat, but it has little to do with retail clients. Reply
Three Cheap 'Transactional' Brokerage Firms [view article]
Interactive Brokers [IBKR] blew right through all estimates in its March quarter with EPS of $0.66 v. $0.31 in 2007.The shares are now north of $30. Reply
Three Cheap 'Transactional' Brokerage Firms [view article]
TradeStation earnings up on busier tradingSouth Florida Business JournalPrint Article Email Article Reprints RSS Feeds ShareThis
Related News
TradeStation earnings up on trades [South Florida]
Early earnings results still positive, despite housing downturn [South Florida]
TradeStation Q3 earnings up 24% [South Florida]
TradeStation Group said its earnings rose 1 percent in the first quarter, as market volatility pushed customers to trade.
The Plantation-based electronic trading platform said it earned $8.3 million, or 19 cents a share, on revenue of $40.7 million. In the prior-year quarter, the company said it earned $8.2 million, or 18 cents a share, on revenue of $35.3 million.
TradeStation (NASDAQ: TRAD) said its brokerage fees and trading commissions jumped 37 percent, driven by heavier trading volume.
The company said its clients made an average of 109,219 trades a day in the first quarter, up 56 percent. Client accounts grew 17 percent, to 38,657.
Shares closed up 7 cents to $9.27. The 52-week high was $14.87 on Dec. 24. The 52-week low was $8.11 on March 31.
Reply