Interactive Brokers Has Quietly Become One of the Best-Run Brokerages on Wall Street
Key Points
Interactive Brokers has been growing rapidly -- and in multiple ways.
Its stock isn't cheap, but for the right investor, it might be worth considering.
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If you're not familiar with Interactive Brokers (NASDAQ: IBKR), you might want to be. It has been delivering outsize gains to its investors -- thanks to its impressive results.
Here's a look at the company and the many things it's doing right -- along with some thoughts on whether you should consider it for your long-term portfolio.
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Meet Interactive Brokers
Let's start with what is arguably the most tantalizing thing about the company -- its stock performance. Wow, right?
|
Time Period |
Interactive Brokers |
|---|---|
|
Year to date |
30.42% |
|
Past 1 year |
59.95% |
|
Past 3 years (annualized) |
64.84% |
|
Past 5 years (annualized) |
38.37% |
|
Past 10 years (annualized) |
24.64% |
|
Past 15 years (annualized) |
22.31% |
Source: Data from Morningstar.com as of May 20, 2026.
You may not be familiar with Interactive Brokers, but it's in its 49th year as a broker/dealer, with the following mission: "Create technology to provide liquidity on better terms. Compete on price, speed, size, diversity of global products and advanced trading tools."
It employs more than 3,000 people in offices around the world, executing (with its affiliates) around 4.4 million trades daily. The company boasted a million client accounts in 2020, two million in 2022, and four million in 2025. It's growing quickly!
A look at Interactive Brokers' business
Here are some impressive numbers for April -- supplied by the company, which reports important metrics monthly:
- Daily average revenue trades numbered 4.2 million, up 11% year over year
- Client equity of $871 billion, up 48% year over year
- Client margin loan balances of $91 billion, up 57% year over year
- Client accounts numbered nearly 4.9 million, up 31% from the year before
Interactive Brokers promotes itself by noting that:
- It charges low trading commissions, starting at $0.
- Its margin interest rates are up to 55% lower than its competitors' rates.
- Customers can earn up to 3.14% on uninvested cash.
These all point to a lot of great benefits for customers -- and also for Interactive Brokers. Consider just its margin business -- where it lets customers borrow money to invest with, while charging them interest. It's doing so on $91 billion most recently -- and that number is rising fast. In its recent first quarter, it noted that "Net interest income increased 17% to $904 million primarily on higher average customer margin loans and customer credit balances."
Should you invest in Interactive Brokers?
So -- given all the wonderfulness of Interactive Brokers, should you invest in it? Well, maybe not, or at least proceed cautiously, because that swift run-up in the stock price has left shares looking overvalued. For instance, the recent price-to-sales ratio of 3.5 is well above the five-year average of 2.0, and the recent forward-looking price-to-earnings (P/E) ratio of 35 is well above the five-year average of 20. Remember, too, that Interactive Brokers does have competition, and it faces risks such as falling interest rates or increased regulation.
Still, while those valuation numbers are on the high side, they're not astronomically so for a company growing as briskly as Interactive Brokers. So if you're risk-tolerant, perhaps learn more about the company and then start with a smallish position in it, adding to it over time. Or just jump in, as long as you intend to hang on for many years.
Should you buy stock in Interactive Brokers Group right now?
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Selena Maranjian 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.
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