IB Quits options game!

https://finance.yahoo.com/news/inte...n-215200044.html?soc_src=social-sh&soc_trk=tw
Interactive Brokers Group Announces Decision to Cease Options Market Making Activities
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... “We must focus on continuing to build our brokerage platform to empower our customers with first rate execution and account management capabilities at very low cost. This remains our mission, to which we must devote our full attention. In retrospect, 40 years of market making gave us the financial resources and the unique expertise to develop our superior brokerage platform for cost and execution sensitive, professional investors and traders, and to give them the edge to successfully compete in the marketplace.” ...
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This would be nice for me as an IB customer, if they indeed spend more focus on their brokerage platform and further improve TWS/Gateway/API.
 
I dont think they have seen the Market Maker as a growth business for many years. While brokerage was always projected to grow nicely for many years.

I remember Peterfly saying in a conference call a few years after the IPO, that the Market Maker made money on 60% of days, and made $Xmillion on profitable days and lost $Ymillion on losing days. With X being around 2Y iirc. I wish i could recall what X and Y were exactly.

Anyway, why be in that business when you can make money almost risk free from the growing brokerage business everyday.
Just have to make sure clients are not over leveraged and leave you with bad debts.
 
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Are those numbers from the accounts or reverse engineered.

The daily win% and win/loss ratio in 2016 might be way different from 8 years ago.
 
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southall said:
Are those numbers from the accounts or reverse engineered.

The daily win% and win/loss ratio in 2016 might not be way different from 8 years ago.
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Yeah... I worked with your 60%... which sounds very low to me to be honest. Should be 80/20 at least, since MM's should be pretty well balanced on a global book level. Probably one of the reasons they pulled the plug ;)
 
JSOP said:
WHY can't they just have ONE or a few central exchanges like the stocks or futures? It's very confusing and highly inefficient with all those exchanges each having their own rules and order-taking mechanisms that really does not benefit anyone.
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I forwarded this to Bezos.
 
SoesWasBetter said:
BOOM!

IB says uncle to making options markets
Just hit the wire
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Big deal...is this supposed to scare me or the people...

Is IB options...like the Lehman Brothers of 2008...the first domino of many to fall... o_O:confused:
Options will never disappear...it's Too Big to Fail.
 
HobbyTrading said:
https://finance.yahoo.com/news/inte...n-215200044.html?soc_src=social-sh&soc_trk=tw

This would be nice for me as an IB customer, if they indeed spend more focus on their brokerage platform and further improve TWS/Gateway/API.
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Anybody who's ever used TWS would agree that their TWS needs a LOT of work in all of the platforms on all products. If IB can REALLY indeed do that, I agree it would be nice for IB's customers. But I imagine once they are done with the overhaul, they are going to charge us BIG time platform fee to use the nice, feature-rich, bug-free all user-friendly platform and still keep the free platform around for those who are too cheap to pay.

I tell you IB is like those F2P games, they keep everything free but you get the bare, naked skeleton of software that just allows you to do two things, buy and sell and that's it. Anything extra, you will have to pay.
 
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southall said:
Anyway, why be in that business when you can make money almost risk free from the growing brokerage business everyday.
Just have to make sure clients are not over leveraged and leave you with bad debts.
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Yes our commission will be $100 per contract. The lost MM revenue is gonna be made up from somewhere somehow given the focus is on brokerage now.
 
JSOP said:
Anybody who's ever used TWS would agree that their TWS needs a LOT of work in all of the platforms on all products. If IB can REALLY indeed do that, I agree it would be nice for IB's customers. But I imagine once they are done with the overhaul, they are going to charge us BIG time platform fee to use the nice, feature-rich, bug-free all user-friendly platform and still keep the free platform around for those who are too cheap to pay.

I tell you IB is like those F2P games, they keep everything free but you get the bare, naked skeleton of software that just allows you to do two things, buy and sell and that's it. Anything extra, you will have to pay.
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That's actually what I want. I don't want to pay for a lot of crap that I never use. I agree, I'm not a fan of TWS. Way too complicated and heavy. I think I've only placed maybe 2 or 3 trades using it. But I do like WebTrader (aside from a couple issues I have documented elsewhere on here). Generally, webtrader is fast and does everything that I need. So, no, I don't want to pay for a platform of which I won't use 96% of it.

Yes our commission will be $100 per contract. The lost MM revenue is gonna be made up from somewhere somehow given the focus is on brokerage now.
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I don't think they can do that. They would start losing too many customers.
 
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