Interactive Brokers Group Inc.'s (IBKR) Electronic Brokerage segment has announced mixed metrics for June 2012. The segment under evaluation clears and settles trades globally for both individual and institutional clients.

Interactive's total customer accounts improved 14% from the prior-year month and 1% from the prior month to 199,900 in June. Further, total customer Daily Average Revenue Trades (DARTs) surged 4% from June 2011 but declined 7% from May 2012 to 419,000.

During June, Interactive recorded Cleared Customer DARTs of 391,000 compared with 371,000 in June 2011 and 420,000 in May 2012. On an annualized basis, the company reported Cleared Average DART per customer account of 493,000, falling from 536,000 in the comparable month last year and 534,000 in the previous month.

Moreover, Interactive's total options contracts fell 9% both from the prior-year month and the prior month to 20,415 in the month under review. The company's futures contracts totaled 8,409, escalating 9% from 7,746 in the year-ago month but dropping 2% from 8,580 in the previous month.

Interactive also released period-end statistics for customer equity, customer credit balances and customer margin loan balances. For the period ended June 2012, customer equity stood at $28.6 billion, growing 11% year over year and 4% sequentially.
Additionally, Interactive's Electronic Brokerage segment recorded customer credit balances of $18.4 billion in the reported month, increasing 5% year over year and 3% sequentially. However, the company's customer margin loan balances of $8.5 billion at June 2012-end fell 9% from $9.3 billion at June 2011-end, but improved 4% from $8.2 billion at the end of May 2012.

Interactive remains well positioned with a stable balance sheet, robust capital base and high barriers to entry. Moreover, the company's better-than-peer positioning and technological excellence is relatively impressive. However, significant operating expenses remain the major setback.

Despite continuous strong performances by Interactive's Electronic Brokerage and Market Making segments, we remain cautious over the steady generation of adequate returns by the latter, in order to subsidize dividend payment. Also, the company's dependence on IBG LLC and its wide international exposure remain the major causes of concern.

Currently, Interactive retains a Zacks #5 Rank, which translates into a short-term Strong Sell rating. One of its peers, Knight Capital Group Inc. (KCG) retains a Zacks #4 Rank (short-term Sell rating).
 
 
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