Interactive Brokers is up over 5% today and hitting fresh 52 week highs. Since volume in the market is dying and trading as an industry is on life support, is this a nice short for a longer term trade? The company did however report that daily trading revenues were up 24% for the year, and total customer accounts were up 12%. I hate calling tops or going against the bull market, but shouldn't brokers and other investment related companies see their profits dwindle even more in this HFT world in the coming years?
IBKR could see profits increase if they decide to unwind the TH units. But watch book value if they keep up the dividend through such an event.
The low in IB is 13.. so not much downside for any short. I think IB were going to buy back shares down at those levels, so it provided support dont think it ever got low enough for them to buy any back.
IBKR has $12 of cash, so won't go much south of $12. The brokerage is probably worth $6 or $7, so shorting at $15-$16 might not be a winner.