Ed S

Interactive Brokers: Navigating Turbulent Waters

Its an interesting play and a better business than its peers IMO. The operating margins are phenomenal.

From a customer perspective I see the advantages as low commisions, safety (as pointed out by James Davis, automatic closout is great if you do not want to take a haircut from your broker's risk mangement weaknesses) and the breadth of instruments traded.

Couple of points:
1. like its peers, it will always be de-rated in a meltdown / scare (fears of counterparty risk etc).
2. Extreme volatility (VIX > 50) is negative for these guys (read the conference call transcript).
3. Freefloat of 10% is a negative.