Interactive Brokers to end market-making as earnings slump
Interactive Brokers, one of the pioneers of automated options trading, is to shut down its market-making activities after a long-term slide in the unit's earnings, from profits of $720m in 2007 to $44m last year. The US company had been executing trades through its Timber Hill firms. CEO Thomas Peterffy said Interactive Brokers would concentrate on its e-brokerage business as market-making had become too costly. The company had been reviewing its operations for some time and analysts question how the pared-down company will fare at a time of swingeing price cuts in the financial industry.

Interactive Brokers (NASDAQ:IBKR), one of the biggest Multi-Asset Multi-Asset Composed of varying asset classes, multi-asset is a blanket designation combining different classes such bonds, equities, cash equivalents, fixed income, and alternative investments.When compared to traditional balanced funds, multi-asset solutions differ because they target specific investment outcomes. This includes outcomes such as return above inflation as opposed to gauging performance against standardized benchmarks.Given the composition of multi-asset classes, they need to be dynamically Composed of varying asset classes, multi-asset is a blanket designation combining different classes such bonds, equities, cash equivalents, fixed income, and alternative investments.When compared to traditional balanced funds, multi-asset solutions differ because they target specific investment outcomes. This includes outcomes such as return above inflation as opposed to gauging performance against standardized benchmarks.Given the composition of multi-asset classes, they need to be dynamically Read this Term retail brokers in the US, is on the wires with a surprising bit of news. The company announced moments ago that it will stop its options market making activities globally. The firm has been executing its pricing via its Timber Hill companies.

Interactive Brokers is starting a gradual process of phasing out its activities globally. The effort will spread over a couple of months. According to the firm’s official announcement, the broker will continue certain trading activities in stocks and related instruments.

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Interactive Brokers was one of the first companies to start automated options market making activity, in the '80s.

The CEO of Interactive Brokers, Thomas Peterffy, justified the move in a statement: “Today retail order-flow is purchased by large order internalizers and joining them would represent a conflict we do not wish to have.”

“On the other hand, providing Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term to sophisticated, professional synthesizers of short-term fundamental, technical and big data is not a profitable activity,” Petterfy elaborates.

Optimization Effort in the Electronic Market Era

The management team of Interactive Brokers is currently conducting a review of the broker’s facilities and staffing. Some optimization of the deployment of the company’s resources is expected in the near future.

Interactive Brokers is also planning to increase the share of the US dollar in its currency portfolio that is currently comprising a basket of 15 major currencies. The brokerage will hike the relative weight of the dollar against other currencies to about 70 percent from its current weight of 47 percent.