This is Zack Fuss. Today, we are breaking down Interactive Brokers, widely recognized as IBKR. Founded in 1978, Interactive Brokers evolved from a market maker on the American Stock Exchange to a global, cutting-edge electronic brokerage firm. Its founder, Thomas Peterffy, remains far and away its largest shareholder and has earned his place as one of the wealthiest people in the world.

To break down IBKR, I'm joined by Freddie Lait and Jacopo Di Nardo of Latitude Investment Management. We explore the journey of IBKR from its early days as Timber Hill to its current status as a publicly traded company with a market cap of nearly $80 billion. We also discuss their differentiated tech stack, their global reach, and their famously low fees. Please enjoy this breakdown of Interactive Brokers.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:03:41) Overview of Interactive Brokers

(00:04:53) Revenue Streams and Business Model

(00:06:15) Competitive Landscape and Differentiation

(00:08:38) Founder Thomas Peterffy's Story

(00:11:31) Payment for Order Flow and Market Access

(00:13:41) Automation and Risk Management

(00:16:50) Customer Experience and Balance Sheet Strategy

(00:26:33) Growth Opportunities and International Expansion

(00:34:34) Valuation and Financial Metrics

(00:37:28) Risks and Stress Tests

(00:42:13) Lessons From IBKR