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Interactive Brokers Group, Inc. (IB) is a U.S. based online discount
brokerage firm headquartered in Greenwich CT in the United States and with
offices in Budapest, Chicago, Hong Kong, London, Montreal, Mumbai, Shanghai,
Saint Petersburg, Sydney, Tallinn, Tokyo, and Zug. The IB Group consists of
subsidiaries operating on most major stock, option, futures, forex, bond, ETF
and CFD exchanges worldwide.
IB is regulated by the U.S. Securities and Exchange Commission and the regulatory policies of all other exchanges on which it trades. IB posts its Electronic Brokerage monthly performance metrics on its website.
In 2009 Barron's Magazine stated that Interactive Brokers maintains a position as "the least expensive trading venue for investors."1 IB has held the ranking as the lowest cost broker for five straight years.
The company traces its origins back to 1977 when Thomas Peterffy bought a seat on the American Stock Exchange as an individual market maker.
The following year, he formed T.P. & Co. to expand trading activities to several members under badge number 549. The firm is the first to use computer-generated fair value sheets printed daily.
Timber Hill was formed in 1982, and in 1983 created the first handheld computers used for trading. Their ability to track positions and continually re-price options on one stock quickly contrasted with counterparts at the exchange who continued to use fair value pricing sheets that were updated only once or twice a day.
In 1984 Timber Hill began coding a computerized stock index futures and options trading system, and in February 1985 Timber Hill's system and network is brought online ushering in an era of computerized trading. The system allowed Timber Hill to centrally price and manage risk on a portfolio of equity derivatives traded in multiple locations around the country.
By 1987 Timber Hill had become self-clearing in equities and joined the National Securities Clearing Corp. and the Depository Trust Company. They also became members of The Options Clearing Corporation, the New York Futures Exchange, the Pacific Stock Exchange and the options division of the NYSE. The firm traded on the PSE, the CME, the CBOT and the CBOE.
In 1990 Timber Hill Deutschland GmbH was incorporated in Germany, and shortly thereafter began trading equity derivatives at the Deutsche Terminborse (DTB), now Eurex. This was Timber Hill's first application of its trading system on a fully automated exchange.
In 1993 Interactive Brokers Inc. (also known as IB) was incorporated as a US broker-dealer, making Timber Hill's vast intercontinental electronic network and trade execution services available to customers, and in 1995 IB created a customer trader workstation which provided professional customers access to exchanges around the world, and IB executed its first trades for public customers.
By 2000 IB introduced a "smart routing" linkage for multiple-listed equity options, and began to clear online trades for customers trading stocks and equity derivatives through the IB system.
In 2001 the corporate name of The Timber Hill Group LLC was changed to Interactive Brokers Group LLC.
IB was ranked the #1 software-based broker and #1 for lowest trade cost by Barron's in 2005, and IBG was ranked the 16th largest US securities firm by Institutional Investor.
On May 3, 2007 the company issued 40,000,000 shares or approximately 10% of the capital of Interactive Brokers Group LLC in a public offering, at a price of US$30.01 per share under the Nasdaq ticker symbol IBKR.2 Interactive Brokers Group, Inc. became a holding company of IBG LLC.
In 2011 Interactive Brokers became the largest online broker as measured by Daily Average Revenue Trades. Download