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) -- Shares of

Interactive Brokers Group

(IBKR) - Get Interactive Brokers Group Inc. Report

surged more than 4%, after the online trading firm and market maker said it would return $1 billion of excess cash to shareholders through a one-time special dividend.

Interactive Brokers said after the market closed on Monday that it would issue a dividend of $1.79 per share to holders of its common stock for a total pretax amount of $1 billion. The dividend is payable on December 23 to shareholders of record as of December 9. The company expects to pay the dividend from cash on hand, it said.

Interactive Brokers is the second trading firm to issue a special dividend this week. On Monday,



surged as much as 10% after the options specialty broker said it would

return $259 million to shareholders through a dividend


E*Trade, TradeStation Rise on Takeover Speculation

Chief executive Thomas Peterffy had indicated previously that the company was considering the special dividend to shareholders.

However, Sandler O'Neill & Partners analyst Rich Repetto writes in a note that following the firm's announcement shares of Interactive Brokers traded as high as $18.30 in after the market closed (the stock closed at $17.56 on Monday), which was "an overreaction."

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"While the overall size of the dividend was similar to what Mr. Peterffy had indicated, the tax bite was greater than we had expected," Repetto writes. "So while the dividend is $1.79 per share, the reduction in book value will be closer to $2.50 per share."

Trading metrics at online firms including

TD Ameritrade

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E*Trade Financial

(ETFC) - Get E*TRADE Financial Corporation Report


Charles Schwab

(SCHW) - Get Charles Schwab Corporation (The) Report

as well as Interactive Brokers and OptionsXpress rose last month vs. sequential comparisons, but were significantly lower than year-ago comparisons due to the reduced volatility as the markets recover this year.

Interactive Brokers shares were most recently trading up 4.4% to $18.30 on volume of roughly 460,000, higher than the stock's three month daily trading average of 313,000 shares.

-- Written by Laurie Kulikowski in New York.

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Laurie Kulikowski


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