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Interactive Brokers Group's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Stocks in this article: IBKR

Before I review the performance of our business segment, I’ll briefly mention the results of our currency hedging strategy. As you know, we maintain our equity in a self-defined basket of 16 currencies that we call the GLOBAL in order to minimize our exposure to currency fluctuations.

As a globally diversified company doing business in 27 countries, we have fundings to be a prudent approach to reducing our currency risk. The value of the GLOBAL as expressed in U.S. dollar ticked up slightly during the quarter by nearly 1%. This had a positive impact on our comprehensive earnings to the [$34 million]. Paul will describe in detail, how this flowed through to our financials.

Market volumes on exchange-traded options have remained flat in the U.S. and decreased 1% globally from the fourth quarter. This compares to our firms total option volume, which decreased 11% during the same period. As a result, our market share during the first quarter decreased from 10.6% to 9.5% globally and from 14.8% to 13.3% in the U.S.

In the market making segment, our option volume decreased 13% during the first quarter driving our market share in that segment from 7.1% to 6.2% globally and from 8.7% to 7.7% in the U.S. The diminution in market share is also due to exchange volumes concentrating in certain underlings, such as apple and spider EPS. We are generally unable to maintain significant share in very high-volume products.

As a reminder, market share is not directly correlated to our profit. We provided as an illustration as to how our performance in the exchange traded options markets move over time.

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