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Business Leader of the Week: Meet Thomas Peterffy, legendary Wall Street billionaire

IFM_Thomas Peterffy
Consistently pushing to replace manual processes with automated ones, Thomas Peterffy wrote code in his head during the trading day and then applied his ideas to computerised trading models

Interactive Brokers (IB) is a renowned brokerage firm known for its cutting-edge trading platforms, extensive global reach, and affordable rates. Since its founding in 1978, Interactive Brokers has expanded to rank among the biggest online brokers globally, serving a wide range of customers such as hedge funds, institutional investors, and individual traders.

Its proprietary trading platform, Trader Workstation (TWS), is one of its most notable features. It provides traders with a wealth of advanced tools and features to execute trades across a variety of asset classes, such as stocks, options, futures, forex, and bonds. TWS is a top option for active traders who need powerful trading capabilities, because it offers complex order types, real-time market data, customisable layouts, and sophisticated charting tools.

In addition to its flagship platform, Interactive Brokers provides a variety of trading tools and platforms, including IBKR Mobile for mobile trading and IBKR WebTrader for web-based trading. These are designed to accommodate varying trading styles and preferences. Interactive Brokers’ global reach is another important factor in its appeal, with access to over 135 markets in 33 countries and 23 currencies. This enables traders to easily diversify their portfolios across international markets.

Additionally, Interactive Brokers is well known for its competitive pricing structure, which offers tight spreads and low commissions, especially for high-volume and active investors. Because of its cutting-edge trading technology and economical approach, Interactive Brokers has become the go-to option for traders looking for efficiency and value in their trading endeavours.

In addition to trading services, Interactive Brokers offers a variety of study aids and educational materials to assist traders in making wise investment choices. These resources include webinars, analyst reports, market commentary, and instructional videos on a range of trading and investing-related subjects. Moreover, Interactive Brokers places a high priority on security and regulatory compliance, putting strong safeguards in place to protect client funds and guarantee that industry rules are followed.

All things considered, Interactive Brokers distinguishes itself as a top brokerage company by providing all-inclusive trading solutions, access to international markets, competitive pricing, and a dedication to providing traders with the instruments and assets required to thrive in the fast-paced financial markets of today.

The brain behind this successful venture is Thomas Peterffy, a Hungarian-born American billionaire businessman and the founder of the company.

    Who is Thomas Peterffy?

  • Thomas Peterffy was born in Budapest, Hungary, on 30th September, 1944
  • His father shifted to the United States after the failure of the Hungarian Revolution in 1956. Peterffy left his engineering studies in Hungary and came to the country to join his father in New York in 1965.
  • As he moved to New York City, Thomas Peterffy began his career as an architectural draftsman working on highway projects for an engineering firm and also volunteered to programme a newly purchased computer
  • Later, he left his career designing financial modelling software and purchased a seat on the American Stock Exchange and played a role in developing the first electronic trading platform for securities
  • Consistently pushing to replace manual processes with automated ones, Thomas Peterffy wrote code in his head during the trading day and then applied his ideas to computerised trading models
  • He introduced handheld computers onto the trading floor in the early 1980s, and later his business related to his AMEX seat eventually developed into Interactive Brokers
  • Amid his business related to his AMEX seat eventually shaping itself into Interactive Brokers, Thomas Peterffy stepped down as its CEO in 2019
  • Interactive Brokers moved its European headquarters in London and outsourced its operations to two new continental centres in 2021
  • Post 2021, Interactive Brokers’ Western European clients were reportedly served by an Ireland subsidiary, whereas the Central European operations were based in Budapest
  • Thomas Peterffy chose Budapest as he was reportedly convinced that the Hungarian language and the “unique Hungarian logic” would result in above-average profitability, apart from the urge to pay off the debt he owed to his native Hungary
  • The Budapest-based subsidiary, Interactive Brokers Central Europe Zrt., was established in Hungary and became a member of the Budapest Stock Exchange (BSE) upon its incorporation
  • According to Forbes’s 2023 list of The World’s Billionaires, his net worth at USD 25.3 billion, making him the 57th richest man in the world
  • In 1999, Thomas Peterffy played a significant role in persuading the Securities and Exchange Commission (SEC) that United States options markets could be linked electronically, which would ensure that investors receive the best possible options prices
  • During the 2012 United States presidential campaign, he created political ads supporting the Republican Party and also bought millions of dollars of air time across the media networks
  • Thomas Peterffy donated over USD 60,000 to the Republican National Committee in 2011 and USD 100,000 to a pro-Donald Trump political group during the 2016 United States presidential election
  • He owns 75% of Interactive Brokers, with his net worth being estimated at USD 5.3 billion as of 2023

Interactive Brokers Composite Rating Rise

Meanwhile, Interactive Brokers’ IBD SmartSelect Composite Rating increased from 94 to 98. The updated rating indicates that the stock is performing better than 98% of all stocks in terms of the most crucial stock-picking criteria. Experts suggest, that when searching for the best stocks to buy and watch, it’s a good idea to keep a check on the grade of 95 or above since winning stocks frequently have those in the early stages of a new price run.

Interactive Brokers broke out from a 95.59 entry in a handle-free cup, and is currently outside of the buy range. With a 96 EPS Rating, the stock outperforms 96% of all stocks in terms of recent quarterly and annual earnings growth. With an accumulation/distribution rating of “A”, it indicates that institutional investors, including mutual funds and pension funds, have been buying a lot of it over the past 13 weeks.

The company reported a growth in earnings per share of 17% in Q4 of 2023. The growth in sales was only 17%, as opposed to 45% in the previous quarter. Interactive Brokers holds the number one rank among its peers in the Finance-Investment Banking/Brokers industry group. Two of the group’s top-rated stocks are Perella Weinberg Ptrs and Robinhood Markets.

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