Interactive Brokers Is Winning From Market Volatility. Can It Keep Going?

If there's been a winner from uncertainty in the investing world, it's been Interactive Brokers (NASDAQ: IBKR).

As traders and investors race out to protect their portfolios and speculate on rebounds and dips, Interactive is quietly in the background, making money from all the activity. It had a strong first quarter of 2026, and it looks like it can keep riding that momentum for the rest of the year.

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Solid earnings

There was a lot to like from the company's recent earnings report. To start, customer accounts totaled 4.7 million in the quarter, a 31% increase from the previous year. Commission revenue increased 19% to $613 million, driven by higher trading activity, and the biggest percentage gains in customer trading volume came from stocks, which increased by 25%. That was followed by a 20% increase from futures and a 16% jump from options.

Net interest income totaled $904 million, a 17% increase, which the company attributed to "higher average customer margin loans and customer credit balances." There was also a 35% increase in customer margin loans, resulting in $86 billion in revenue.

Needless to say, it was a fairly strong three months, as traders were consistently moving in and out of stocks, hedging against risk, and taking on speculative positions.

The cyclical nature of the business

Like commodities, investing and trading can also be cyclical, as volatility tends to drive more activity. That cyclicality can also hinge broadly on economic conditions, as there may be more active trading and investing in bull markets or in more stable markets than in bear markets.

In addition, as Interactive Brokers earns interest on client cash balances, interest rates affect the business. The higher the rates, the more interest Interactive can earn; in a lower-rate environment, less interest is earned. That's not a reason to shy away from investing in the company, but it's something to keep in mind.

The momentum continues

At least for the rest of 2026, barring a recession, it appears Interactive Brokers can keep the momentum going. More uncertainty leads to more trading, so Interactive Brokers should continue to do well. One area to watch over the long term is interest rates, as net interest income can take a hit if they are lower, but the market is not expecting cuts for the rest of the year.

For other investment considerations, the company's forward price-to-earnings ratio of 30.8 is higher than it has been over the last several quarters. Investors are expecting more earnings growth out of the company and are willing to pay up for it, but that also leaves less room for error.

Overall, Interactive is currently in a market environment that can keep it doing well. It's also a potential long-term investment to consider, as long as anyone investing is aware of how cyclicality and interest rates can impact the business.

Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Interactive Brokers Group. The Motley Fool recommends the following options: long January 2027 $43.75 calls on Interactive Brokers Group and short January 2027 $46.25 calls on Interactive Brokers Group. The Motley Fool has a disclosure policy.