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    Interactive Brokers Group Inc (IBKR)

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    Business Description

    Interactive Brokers Group, Inc. (IBKR) is an automated global electronic broker that specializes in executing and clearing trades across a wide range of financial instruments. The company operates on more than 150 electronic exchanges and market centers in 34 countries and 27 currencies worldwide. IBKR provides services to a diverse customer base, including hedge and mutual funds, registered investment advisors, proprietary trading groups, introducing brokers, and individual investors, offering a comprehensive trading platform that supports multiple products and currencies from a single account .

    1. Interest Income - Earns interest on customer margin loans and other interest-earning assets, contributing significantly to the company's revenue .
    2. Commissions - Generates revenue from executing and clearing trades in stocks, options, futures, foreign exchange instruments, bonds, mutual funds, ETFs, and precious metals .
    3. Other Fees and Services - Includes fees for various services provided to customers, enhancing the company's service offerings .
    4. Other Income (Loss) - Involves income or loss from activities not classified under the main segments, impacting overall financial performance .

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    Thomas PeterffyChairman of the Board of DirectorsNovember 2006Thomas Peterffy is the founder and Chairman of the Board of Directors at Interactive Brokers Group, Inc. He has been a pioneer in applying computer technology to automate trading and brokerage functions since emigrating from Hungary to the United States in 1965. He was among the first to apply a computerized model to value equity option prices .
    Earl H. NemserVice Chairman and DirectorNovember 2006Earl H. Nemser has been the Vice Chairman of Interactive Brokers Group, Inc. since November 2006. He has served as Vice Chairman of IBG LLC and its predecessors since 1988 and acts as an Independent Advisor to the law firm Dechert LLP. He holds a BA in economics from NYU and a JD from Boston University School of Law .
    Milan GalikChief Executive Officer, President, and DirectorOctober 2019Milan Galik joined Interactive Brokers Group, Inc. in 1990 as a software developer. He has served as CEO since October 2019 and as President since October 2014. He has been a director since November 2006 and previously served as Senior Vice President of Software Development .
    Paul J. BrodyChief Financial Officer, Treasurer, Secretary, DirectorNovember 2006Paul J. Brody has been serving as the CFO, Treasurer, and Secretary of Interactive Brokers Group, Inc. since November 2006. He joined the company in 1987 and has held the position of CFO of IBG LLC since December 2003. He holds a BA in economics from Cornell University .
    Thomas A. FrankExecutive Vice President and Chief Information OfficerJuly 1999Thomas A. Frank joined Interactive Brokers in 1985 and has served as Executive Vice President and CIO since July 1999. He holds a Ph.D. in physics from MIT, received in 1985 .
    Lawrence E. HarrisDirector (Independent)July 2007Lawrence E. Harris has been an independent director at Interactive Brokers Group, Inc. since July 2007. He is a professor of Finance and Business Economics at USC and has served as Chief Economist of the U.S. SEC. He is recognized as an expert in securities market microstructure .
    Philip UhdeDirector (Independent)April 2019Philip Uhde has been a director at Interactive Brokers Group, Inc. since April 2019. He managed Echinus Partners, an investment partnership, from 2012 through 2020 and has led investments in several financial services companies .
    William PeterffyDirectorApril 2020William Peterffy has been a Director at Interactive Brokers Group, Inc. since April 2020. He is the Chair of the Investment Committee of the Peterffy Foundation and leads ESG efforts at IBG LLC. He is the son of Thomas Peterffy .
    Nicole YuenDirector (Independent)July 2020Nicole Yuen has been an Independent Director at Interactive Brokers Group, Inc. since July 2020. She has over 20 years of experience in investment banking and served as Managing Director at Credit Suisse, leading its brokerage business in mainland China .
    Jill BrightDirector (Independent)April 2022Jill Bright has over three decades of experience in human resources management. She is an operating executive at Crestview Partners and has held positions at LionTree LLC and Condé Nast. She has been an Independent Director at Interactive Brokers Group, Inc. since April 2022 .

    Questions to Ask Management

    1. Given your estimate that a 25 basis point decrease in the Fed funds rate would reduce annual net interest income by $64 million , how do you plan to offset potential declines in net interest income in a lower rate environment?

    2. With the opening of your new office in Dubai aimed at attracting sophisticated accounts , what specific strategies are you employing to grow your presence in the Middle East, and how do you expect this expansion to impact your overall business performance?

    3. Considering that competitors are planning to introduce index options at lower price points, potentially increasing pricing pressure in the industry , how do you anticipate this affecting your market share and pricing strategy in the U.S. options trading market?

    4. Given that your securities lending net interest income has been affected by factors such as fewer hard-to-borrow names and decreased market volatility , what measures are you taking to enhance securities lending income in the current market conditions?

    5. Regarding your ForecastEx platform, with initial volumes driven by political contracts and around 800 clients trading so far , when do you expect this platform to reach a scale that materially impacts your financial results, and what risks does it pose to your balance sheet ?