The Zhitong Finance App learned that Yingtou Securities (IBKR.US) announced the results for the third quarter of 2026 and held a performance conference call.
Yingtou Securities set another pre-tax profit record in the third quarter, with a pre-tax profit margin of 78%, reaching 70% for the eighth consecutive quarter. Commission revenue increased 12% year over year to US$602 million, exceeding US$600 million for the third consecutive quarter; net interest income increased 19% to over US$1.1 billion, mainly due to balance growth — margin loan balances surged 47% year over year and 8% month-on-month, reflecting the increasing “risk-on” (biased risk) of the investment environment during the quarter. Revenue from other expenses and services was $88 million, an increase of 33%, driven by risk exposure fees, market data fees, and strong options trading volume. On the cost side, execution, liquidation, and distribution costs amounted to US$134 million, an increase of 46% over the previous year, mainly due to the restart of SEC regulations — the fee was zero in the third quarter of last year and reached $30 million in the current quarter. Due to its basic nature, it also boosted commission revenue and execution costs, and did not affect profits; after excluding $28 million in non-transactional costs (mainly market data fees), execution and settlement costs accounted for 17% of commission revenue, corresponding to 83% of transaction gross profit. Compensation and benefits of $167 million, accounting for 9% of adjusted net income; 3,286 employees at the end of the quarter. In terms of return on capital, the company raised its annual dividend from $0.35 to $0.60. Chairman Thomas Peterffy (Thomas Peterffy) explained that the dividend guideline was “0.5% to 1% of market value,” which has lagged behind before and is catching up. On the balance sheet side, total assets increased 21% year over year to US$243 billion. With no long-term debt, the company's equity increased 19% to US$23.3 billion; the number of accounts increased by more than 30%, and customer credit balances reached a record high.
The questions and answers focused on five lines. On the dividend side, Piper Sandler asked if this increase meant a new dividend framework or target ratio. Peter Fee reiterated that it would control “0.5% to 1% of market value”; the Bank of Montreal asked whether dividends would be cut if market capitalization retracted and yields passively rose above the range. Peterffy answered, “I can't imagine any situation (which would cut dividends).” In terms of customer acquisition, the company admits that it is investing more in digital channels — joining the X platform's Cashtags program in September and offering a $100 deposit bonus — but the initial results were “mixed”: the value of customers obtained was higher but fewer. In terms of trading activity, stock trading volume fell 24% year over year, options fell slightly, futures increased 13%, and trading activity per account fell to a long-standing low; when asked if it predicted a slowdown in growth, Garrick said the decline was “widespread,” but “there is no concern,” due to the high base of IPO-related activities last quarter and partial IPO delays, and it is expected that the approach of the midterm elections will drive up volatility and customers will trade more. In terms of the new product, RIA's tax-aware long and short strategy was about $300 million at the end of the quarter. The company said other brokerage firms imposed restrictions on such strategies but created opportunities; autonomous AI transactions have been opened to about 3,000 customers who have previously used the “human circuit” AI connector, and the eligibility will be expanded over the next few weeks. The prediction market has been connected to ForecastEx, Kalshi, and CME platforms, and is being integrated with Polymarket. Cboe's individual stock KPI contract will be launched as soon as the end of this month.
The market is really focused on three things. The first is interest rate sensitivity: starting with the federal funds effective interest rate of 3.88% on September 30, for every 25 basis points of change in the benchmark interest rate, the annualized net interest income increases or decreases by about $83 million; the same change in the non-US dollar benchmark interest rate corresponds to about 35 million US dollars (about 30% of customer interest rate sensitive balances are not in US dollars). Chief Financial Officer Paul Brody (Paul Brody) emphasized that the impact of the Fed's interest rate hike in mid-September “will be reflected in the fourth quarter,” and the average term of the portfolio is still less than 30 days; although the average federal funds rate fell 63 basis points (or 15%) year on year, interest on margin loans increased 36% and interest on isolated cash increased 4%. The second is a window for share redistribution: Wolfe Research indicates that a major brokerage firm has set a minimum asset threshold of $100 million for RIA on the platform, which will take effect in the middle of next year. Management confirmed that it is Fidelity. Garrick responded that Yingtou is “one of the obvious choices,” and will seek to take on advisors in need of a “new home” within about nine months. The third is the divergence between growth and activity: the number of accounts increased by more than 30%, DART increased 18% to 4.3 million transactions per day, but the commission for each liquidated order fell to 2.59 US dollars, a year-on-year decrease of 4%, reflecting a decrease in order size; overnight transactions increased from 3.5 million in the same period last year to more than 10 million, becoming a new increase for international customers. Furthermore, the caliber of securities lending is also worth paying attention to: the reported net interest rate is lower than last year's unusually strong level, but if additional interest income and expenses on cash collateral are included, the total net income related to securities lending this quarter was US$426 million, an increase of 36% over the previous year. Management suggests that this adjusted perspective better reflects the real situation.
Presentation session
presenter
Hello, welcome to Yingtou Securities Group's third quarter 2026 results conference call. [Host Reminder]
Now leave the meeting to Investor Relations Director Nancy Stuebe (Nancy Stuebe). Please get started.
Nancy Stuebe - Director of Investor Relations
Thank you. Good afternoon, and thank you all for attending our Q3 2026 results conference call. Today's participants include founder and chairman Thomas Peterffy, President and CEO Milan Galik (Milan Galik), and Chief Financial Officer Paul Brody. I will be presenting Milan's comments on the business. All three will participate in the Q&A session.
As a reminder, today's call may include forward-looking statements that represent the company's views on future events, are uncertain in nature, and are not controlled by the company. Our actual results and financial position may differ from the results shown in these forward-looking statements and may vary materially. Please read the disclaimer in our press release. Please also read the risk factor statement in our financial report to the SEC.
The S&P 500 index rose 2% this quarter, and the previous quarter rose nearly 15%. That is, the convenience ratio increased due to market enthusiasm for big tech companies and artificial intelligence, and the index remained resilient. However, this performance overshadows the fact that the market is narrow — big tech stocks accounted for most of the S&P 500's gains this quarter. The 10 largest US tech stocks currently account for nearly 40% of the index's total market value, and their concentration has increased further since this year. Global technology stocks were still the most actively traded targets on our platform this quarter. The growth and business appeal of these companies have made global investors want to directly invest in them, own them, and exchange their local currency for dollars at a low cost to achieve this.
Investors hold these shares in various accounts — hedge funds, personal accounts, and retirement accounts. Being able to operate with such flexibility regardless of account type is an important reason for the success of our platform. As can be seen from our account growth of over 30%, strong interest in opening and depositing accounts continues; we are also seeing growth from institutions and individuals, and across all regions. Profit before tax set a record, and our pre-tax margin of 78% marks the eighth consecutive quarter with a profit margin of 70%. In light of this, and as a source of confidence in the strength of our business model, growth potential, and capital base, we re-examined our capital allocation method and decided to raise our dividend payment to $0.60 per year.
We launched a number of new products and initiatives this quarter. We've added access to several new exchanges: the Bucharest Stock Exchange (one of the best performing markets in the past decade), the Texas Stock Exchange (where we have seen an average daily volume of around 2.5 million shares), and a new options exchange aimed at improving the liquidity of large — especially institutional — options orders. In Brazil, we launched B3 financial indices, cryptocurrency and commodity futures trading, expanding our access to Latin America. We are starting to launch cryptocurrency pledge services on a small scale, so that customers can generate revenue from holding coins. In Japan, we can now provide customers with a variety of new ways to improve returns, starting with margin borrowing.
We can also offer full-payment securities lending plans, and Gaika+, our own service that allows Japanese clients to earn interest on eligible non-Japanese yen cash balances in brokerage accounts. In terms of predicting the market, we have launched short-term event contracts for cryptocurrencies, metals, and energy, with an expiration time of every hour (every hour) and 15 minutes. These products allow customers to bet on price results within the day and increase customer engagement on our platform.
Our AI connector is still one of the fastest adopted features we've introduced. We added Perplexity as an official partner this quarter and expanded our connectivity capabilities to support any AI tool using the Model Context Protocol (MCP), including programming assistants and desktop assistants preferred by many of our active customers.
We've also enhanced the connector, added account-level profit and loss, reminder management, and optional lists, and expanded trading capabilities to two-legged options strategies. We've also launched autonomous AI trading (autonomous AI trading), which allows eligible customers to connect AI agents of their choice to their IBKR account and authorize them to trade autonomously. It works with any compatible MCP client or AI platform. Customers can create and fund autonomous AI transactions in a single session within an existing account without opening a new account. The promotion is currently underway. Autonomous AI transactions are open to eligible customers in some countries, and more countries will be added in the future. Customers can trade global stocks and options using a variety of order types and trading hours (including intraday, overnight, and overnight plus intraday).
Let's take a look at a few more customer sections. For registered investment advisors (RIAs), we can now offer tax-aware (tax-aware) long and short strategies to their clients. Since our platform was originally designed for active, mature clients, and we have a long-term primary brokerage business, tax-aware accounts that use margin, short selling, and securities borrowing are a perfect fit for us. We're seeing a rise in market interest in our service, especially as other brokers restrict these strategies. We have now joined 3 tax awareness strategy vendors, and more will be added before the end of the year, and there will be more at the beginning of next year, providing RIA with a wide range of options. We were also able to use our deep programming capabilities to tailor this service according to the needs of different customers.
Our reserves of introduced brokers (imported brokers) remained strong this quarter, similar to the previous quarter — the pool of potential clients continued to grow and be significant, while continuing to access several new introduced brokers, and the stock of clients was growing. This quarter, DAOL Investment & Securities, a South Korean listed brokerage firm, launched a global securities trading platform driven by Yingtou's technology and trading infrastructure.
The internal adoption of AI also continues. We're implementing and promoting AI-assisted tools to customer service teams that can retrieve data across multiple internal systems, begin analyzing simple or complex requests, and present results to customer service representatives to help teams serve customers faster and more efficiently.
New account opening, compliance, and monitoring are all incorporating AI and machine learning to help us scale as new customer traffic and the number of global exchanges increase.
Finally, despite a slowdown in overall trading activity compared to the second quarter, our overnight trading volume continued to rise, showing more and more how important it is for international investors who want to trade in active and liquid markets during a clear period. Overnight transactions increased from 3.5 million in the third quarter of last year to over 10 million this year.
We have lots of plans for the next few quarters, and we look forward to sharing more progress in the coming quarters.
Next, give the phone to Paul Brody. Paul?
Paul Brody - Chief Financial Officer, Treasurer, Secretary and Director
Thank you, Nancy, and thank you all for attending today. We started with the revenue project on page 3 of the press release.
We are once again satisfied with our financial performance this quarter, and once again achieved close to record adjusted net income and record profit before taxes. Commission revenue increased 12% to $602 million from the third quarter of last year. This is the third consecutive quarter in which our commission revenue surpassed $600 million. Net interest income increased 19% year over year to over $1.1 billion, mainly driven by higher balances. Strong growth in margin borrowing reflects an increasingly risk-biased investment environment as the quarter progresses.
Our segregated cash portfolio grew with new accounts. However, as customers put more capital into the market this quarter, interest on segregated cash was roughly the same as in the previous quarter. The interest we pay to our clients' cash balances (which partially offsets interest income) also expands as the account grows. Other fees and services generated $88 million, an increase of 33%, mainly driven by the following factors: higher risk exposure fees in a more risk-oriented environment than last year, rising market data fees, and strong options trading volume leading to an increase in mandatory order flow project payments on options exchanges. Other income includes profit and loss from our investments, profit and loss from currency diversification strategies and proprietary trading. Note that many of these non-core projects are excluded from our adjusted earnings. Excluding these excluded projects, other revenue for the quarter was $28 million.
Go to expenses. Execution, liquidation, and distribution costs were $134 million this quarter, an increase of $42 million or 46% over the same period last year, mainly due to the restart of SEC regulatory fees. These expenses were zero in the third quarter of last year and were $30 million in the current quarter. Since most of these fees are unpaid, they simultaneously drive up our commission revenue and execution costs, and have no impact on profits. Third-quarter execution and settlement costs accounted for 17% of commission revenue, corresponding to 83% of transaction gross profit. Our calculation method is to remove $28 million in non-transactional costs (mainly market data fees) from execution, liquidation, and distribution; these costs have no direct corresponding commission revenue component.
Compensation and benefits expenses were $167 million for the quarter, and compensation expenses accounted for 9% of adjusted net income, similar to last year. As of September 30, we had 3,286 employees. General and administrative expenses were US$78 million, up from the same period last year, with continued expansion of advertising as a major factor. Our profit margin before tax is 78% in both reported and adjusted terms. Income tax of $148 million is the sum of $60 million for public companies and $88 million for operating companies. The effective tax rate for public companies this quarter was 16%, which is within its regular range.
Go to the balance sheet on page 5 of the press release. Our business's consistently strong and healthy balance sheet supports us to raise our dividend from $0.35 to $0.60 per year, returning capital to shareholders while maintaining an adequate capital base for current business and future opportunities. Our total assets increased 21% from the previous year to $243 billion, driven by higher margin borrowing and segregated cash and securities balances. New account growth has also helped drive customer credit balances to record levels. We still don't have any long-term debt. Profit growth boosted the company's equity by 19% to $233 billion. We maintain a balance sheet oriented to support the growth of our existing business, help us win new business by showing our strength to potential customers and partners, while also considering overall capital allocation.
Go to Operational Data. Client activity was strongest in futures contracts, up 13% from the previous year, while options and stocks were relatively lackluster. There was a slight decline in options trading volume. Stock trading volume (in terms of number of shares) fell 24% from last year, mainly driven by low-priced stocks — the number of such shares is relatively high in nominal value. Overall, customers are turning to larger, higher-quality targets, and the returns for these targets far exceed the gains of most major market indices. As can be seen on page 7, the total customer DART for the quarter was 4.3 million transactions per day, an increase of 18% over the previous year. The commission for each liquidated order is $2.59, down 4% from last year due to smaller order sizes for various products.
Go to Net Interest Spread. NIM data is shown on page 8. Total GAAP net interest income was slightly above $1.1 billion for the quarter, up 19% from the same period last year; net interest income in our NIM table was $1.2 billion, an increase of 19% as well. For NIM calculation purposes, we have included some revenue that is more appropriate to be considered interest, but this revenue is classified as other expenses and services or other income for GAAP purposes.
Our net interest income reflects strong annual growth in balances and “mixed feelings” about changes in policy interest rates at central banks around the world. Several central banks raised interest rates in September, providing a slight boost to net interest income in the third quarter, and will bring further benefits in the future. Together, these factors have boosted interest income from margin loans and clients' cash segregated, partly offset by an increase in interest expenses on clients' cash balances.
On a year-over-year basis, the average US federal funds rate fell 63 basis points, or 15%. Despite this decline, our margin loan interest increased 36% and segregated cash interest increased 4%, both supported by higher balances. The average duration of our portfolios remains under 30 days. Since the Federal Reserve's rate hike occurred in mid-September, most of its impact will be felt in the fourth quarter. The US dollar yield curve is generally positive in the short to medium term. Our response is to slightly lengthen the term while maintaining a relatively close maturity match between assets and liabilities.
Net interest on report-caliber securities loans was lower than last year's unusually strong results, even though there were several very popular and difficult to borrow targets in both quarters. However, looking at securities lending from a more complete perspective, the picture is different. A portion of what we earn from borrowing securities is classified as interest earned on segregated cash. We estimate that if additional interest earned and paid on cash collateral is included under “borrowing and lending securities,” the total net income associated with securities borrowing this quarter would be $426 million, an increase of 36% over the same period last year. Fully interest-sensitive customer balances were $27.8 billion at the end of the quarter, compared to $25 billion in the same period last year.
Next is our estimate of the impact of changes in interest rates. Given that there is some uncertainty about the direction of US interest rates and the divergence of actions of central banks around the world, we are examining the potential impact of two-way changes in interest rates. We estimate that for every 25 basis points of increase or decrease in the benchmark federal funds rate, annualized net interest income will increase or decrease by approximately $83 million. Note that our starting point for this estimate was September 30, when the federal funds effective interest rate was 3.88%, and the balance was data for that day. Any increase in our balance sheets and interest-bearing assets will amplify these effects.
Approximately 30% of our clients' interest rate sensitive balances are not in USD. Therefore, estimates of changes in US interest rates exclude these currencies. We estimate that for every 25 basis points of increase or decrease in all relevant non-dollar benchmark interest rates, annualized net interest income will increase or decrease by $35 million.
In summary, this was another strong financial quarter, reflecting our ability to continue to expand our customer base, deliver on our core value proposition to our customers, and expand the scale of our business. Our business strategy continues to be effective: automate the brokerage business as much as possible, continuously expand our services through new products while continuously improving, and keep our fees to a minimum.
Questions are now open.
Q & A session
presenter
[Host Tip] Our first question came from Piper Sandler's Patrick Moley.
Patrick Moley - Piper Sandler, Research Division
I have a question about dividends, and the increase to $0.15 this time is quite significant. Can you talk about how the board of directors considered this size, and whether it meant some kind of new dividend framework — such as a target ratio, or what level of excess capital you think would be appropriate?
Thomas Peterffy - Founder and Chairman
The general guideline we follow is to pay dividends equivalent to 5 to 1 thousandth of the market capitalization, and we were a bit behind before, so we are now trying to catch up. We will continue to follow this guiding principle, which is to pay a dividend of 5 to 1% of market capitalization.
Patrick Moley - Piper Sandler, Research Division
OK, great. Then another question, Paul, you mentioned advertising as a major driver of G&A's rise. I know it's only been about a month since September, but you've joined X's Cashtags program and are offering a $100 deposit bonus there. Can you give us a first look at what this channel has produced? Also, should the increase in advertising spending and cooperation with X be understood as a sign that you are relying more on digital customer acquisition strategies?
Thomas Peterffy - Founder and Chairman
Yes, we do. This is a correct assumption, and this is the direction we want to invest more in, but it will take some time to straighten it out.
Patrick Moley - Piper Sandler, Research Division
Very good. Can you give us any initial observations — how are the results so far, or what the customer accounts are looking like?
Thomas Peterffy - Founder and Chairman
Arguably mixed feelings. Although our recent customers are more valuable customers, we have been getting fewer.
presenter
Our next question comes from James Yaro from Goldman Sachs.
J ames Yaro - Goldman Sachs Group, Research Division
I'd like to ask, in your key geographical regions, where do you think Yingtou has the greatest opportunities to increase account market share? Accordingly, where do you think IBKR is still underpenetrated?
Milan Galik - President, CEO and Director
Well, I'm not going to single out a single geographic area. We believe we have plenty of room to grow in both mature and emerging markets. One of our strengths is that we operate a single, highly automated global platform that can easily adapt to local regulations and needs without having to set up a separate business in each country. That's a huge plus. Of course, opportunities aren't all the same everywhere. In some markets, we see more interest from individual investors, while in others they come from institutions or intermediaries. But that's the strength of our model: we can serve different types of customers in different markets, and we can expand without significantly increasing costs.
James Yaro - Goldman Sachs Group, Research Division
Very good. I'd like you to talk about the current size of tax-aware long and short products for RIAs, probably in terms of assets. And then more broadly, what are your ambitions for this product from now on?
Milan Galik - President, CEO and Director
Well, in terms of assets, it was around $3 billion by the end of the quarter. It wasn't long before we actually started attracting this customer segment. We have high expectations. We work with 3 to 4 different suppliers, including AQR—a very well-known name in this field. We're still looking to add more. We have seen RIAs being signed up, although this process is slower than we would like.
We think we're positioning ourselves particularly well on this product. These strategies require guaranteed financing, short selling, and securities borrowing, all of which we have been doing very well over the years. We have low financing costs, a large pool of lendable securities, and automated capabilities to handle these strategies efficiently and at scale. On top of that, other brokers are imposing restrictions, which creates additional opportunities for us. So we're very focused on this business and think it has plenty of room for us to grow.
presenter
[Host Tip] Our next question comes from Jefferies's Daniel Fannon.
Daniel Fannon - Jefferies, Research Division
You are seeing a slowdown in customer trading activity. I'd like to ask at a higher level, are you seeing any customers or geographic regions where you expect a continued slowdown, or are there any underlying signs that might make you worried about future growth?
Milan Galik - President, CEO and Director
Nothing really worrying. As you know, trading activity isn't always consistent. We may have benefited from some IPO-related activity in the last quarter. A few IPOs were supposed to go live this quarter, but they were delayed. We expect volatility to rise as the midterm elections approach. When volatility increases, our traders and clients tend to trade more. So no worries.
Daniel Fannon - Jefferies, Research Division
Great, this helps a lot. Also, you mentioned the launch of several products in Japan. I think it's about security deposits, and you also mentioned another item. Curious about how well these changes have been accepted and how their potential contributions should be viewed.
Milan Galik - President, CEO and Director
Our current goal is to migrate the Japanese resident accounts we have accumulated under our US subsidiary to the Japanese subsidiary. This is what we are focusing on and what we are discussing with regulators. But at the same time, we put a lot of effort into providing security deposit business in Japan in a compliant manner. We just recently completed the deployment of a so-called passkey (passkey), which is another type of two-factor authentication that is said to be resistant to phishing attacks. Currently, we are focusing on making customer account opening faster and making KYC verification as fully digital as possible.
So Japan still has some work to do. But we are confident that at that time we will have everything we need to fully compete. The resistance we will face is that doing business in Japan is difficult. This is what we learned after putting a lot of effort into this country over the past few years. Japanese culture is very different and very homogenous. It is hoped that younger investors will prefer foreign brokerage firms like us. So we remain optimistic.
presenter
Our next question comes from Barclays Ben Budish.
Benjamin Budish - Barclays Bank, Research Division
I would like to continue with the previous question about tax perception strategies. Maybe you could talk more about the current state of your RIA business. I'd like you to remind us what types of RIAs are currently on the platform? What types of transparency have you not been exposed to before attracting potential? Do you think there's an opportunity to consolidate a portion of the market share — RIA that might be using multiple hosts? And more broadly, do you think this is a strategy for the RIA channel, or a strategy that is as appealing to your high-net-worth and active trading clients?
Milan Galik - President, CEO and Director
Tax awareness products are mainly carried out by financial advisors. These products are suitable for larger accounts. Larger accounts, on the other hand, are the types of accounts held by financial advisors. As I said, we have high expectations for this sector for the various reasons I have mentioned. In addition to focusing on tax awareness packages, we're also doing some work to make RIA's access easier and smoother — not just those RIA interested in these products. So there are some programming projects currently underway. We are also looking at significantly enhancing integration with multiple hosting platforms, and we hope that financial advisors who are already hosting with some of our competitors will be more willing to bring some of their business to our platform.
Benjamin Budish - Barclays Bank, Research Division
Got it, that helps a lot. Maybe ask a separate question about new trading product opportunities. I don't think there was much discussion on products such as binary options or single stock futures during this conference call. And I know that Cboe recently received approval for a single stock KPI. So it would be helpful to know what you think of these newer products and what kind of expectations they have for acceptance.
Milan Galik - President, CEO and Director
Cboe that announcement, I remember yesterday or a few days ago, was obviously very exciting. I think the forecast market would welcome these additional KPIs on a single stock. We don't know when this product will be available yet. I think Cboe might try to go live before the end of this month. We are moving forward with this project. Our goal is to offer it to our customers as a very interesting product. We're really looking forward to it.
presenter
Our next question comes from Steven Chubak of Wolfe Research.
Steven Chubak - Wolfe Research, LLC
First, I'd like to ask about recent developments in the rival of one of the major brokers in the RIA space. They recently introduced a $100 million minimum asset threshold for RIA on their platform, which will take effect sometime in the middle of next year. However, many people think this might spur more small RIAs. This is clearly in line with your company's strengths. I'm curious if you've heard this from other RIAs in the industry? Is this driving up interest in intent reserves (pipelines)? And, given that some of the larger competitors may be downsizing smaller companies, what position do you think you are in to consolidate shares?
Milan Galik - President, CEO and Director
As you said, this should happen sometime in the middle of next year. I remember that competitor was Fidelity, and anything under $100 million would have to find a different destination. I totally agree with you. We are one of the obvious choices, if not the only obvious one. This is part of the reason why some of the jobs I mentioned earlier are so important and so beneficial. We have 9 months, maybe a little more, from now until this happened. So we'll work very hard to show financial advisors who need to find a new home a friendly destination.
Steven Chubak - Wolfe Research, LLC
That's great info. My question is, since you mentioned a major brokerage relationship introduced on the platform, can you talk about this reserve situation and how it compares to the IB reserves you saw 6 or 12 months ago, so that we can at least test the trend there.
Milan Galik - President, CEO and Director
What I'm saying is that it looks more or less the same as previous quarters. There are many integrations in the pipeline that are ongoing or in progress. Some of them are already live. This business continues to attract companies that want to expand services and grow their business. Here, one of our key strengths is that we provide a complete solution — from account opening and front-end trading platforms, to execution, corporate actions, liquidation, escrow, and in my opinion, unrivaled global multi-asset services. This is a critical advantage.
Another big advantage is that our investment in direct brokerage business will also benefit our introduced broker (iBroker) clients. As we expand into new markets, new asset classes, or add new capabilities, these capabilities are almost immediately available to our iBroker customers. As a result, we continue to be extremely well positioned to benefit from any company that wants to become an iBroker.
presenter
Our next question comes from Wells Fargo's Dan Welden.
Daniel F. Welden - Wells Fargo Securities, Research Division
You mentioned the launch of autonomous AI trading. I was wondering what percentage of your customer base would qualify? Related to this, do you think AI tools will help people to be more confident in trading new instruments and lead to a substantial jump in the number of transactions per account over the long term?
Milan Galik - President, CEO and Director
We took a very limited approach to launching autonomous trading. We only invited customers who have previously used our human-in-the-loop (human-in-the-loop) AI connector. We plan to expand eligibility to more customers over the next few weeks. As for the expected level of activity, here's a rough figure: we've invited around 3,000 customers in the past few days. Obviously, this number will increase substantially. As for the expected amount of activity, we anticipate — as customers become more comfortable with AI as a whole, we expect them to become more comfortable with AI making trading decisions on their behalf. Good investors will be more productive because they will be able to consume and process significantly more information. They will be able to track more companies and will also be able to execute trading strategies more easily. These are the reasons we expect AI adoption to lead to higher transaction volumes.
Daniel F. Welden - Wells Fargo Securities, Research Division
Then ask: you have now connected more places to predict the market. How do you feel about the promotion and acceptance of this channel?
Milan Galik - President, CEO and Director
We've joined Kalshi and CME, plus ForecastEx, and now cover 3 different platforms. We're moving forward with the integration with Polymarket. These integrations are delivering the results we expect. We've boosted our overall turnover. Our customers benefit from a wider product range, deeper liquidity, and better execution prices.
presenter
Our next question comes from BMO's Brennan Hawken.
Brennan Hawken - Bank of Montreal Capital Markets, Equity Research Division
I would like to continue with the previous question about dividends. If you think in terms of market capitalization yield, then assuming we see a market capitalization retreat and yield being pushed above the range, would you consider cutting dividends? Or will you carry it on until the market value recovers? What would you guys think of these parameters?
Thomas Peterffy - Founder and Chairman
I don't think we'll ever cut our dividend, at least not under any circumstances I can imagine sitting here right now.
Brennan Hawken - Bank of Montreal Capital Markets, Equity Research Division
Very good, Thomas, that's very clear. Then there is a more conventional question. The yield on margin balances increased quite a bit compared to the previous quarter. You mentioned “mixed feelings” about changes in policy interest rates. Can you talk about how much of this increase in yield comes from changes in benchmark interest rates and how much from structural changes? And how sustainable do you think this increase in yield is?
Paul Brody - Chief Financial Officer, Treasurer, Secretary and Director
Well, this is always a combination of these factors, especially which currencies are flowing in and what those central banks are doing. We did see more contributions from non-US dollars this quarter than before, but it will all come in. The main driver was the increase in the balance itself — 47% year-on-year and 8% month-on-month.
presenter
[Moderator's Tip] Our next question comes from Deutsche Bank's Brian Bedell.
Brian Bedell - Deutsche Bank, Research Division
Maybe ask another question about tax perception strategies. From an economic benefit perspective, should it simply be understood as — as you expand margin loans and use securities loans, the credit that supports these is the same economic benefit you are currently receiving from these projects? Or would these RIA-oriented strategies have a different set of economic benefits in these areas?
Milan Galik - President, CEO and Director
The economic benefits would be similar to the rates we offer today for large balances and large accounts.
Brian Bedell - Deutsche Bank, Research Division
OK, great. Then back to the question of predicting market and company KPIs. As you reach more markets, it's clear that Cboe will be one of them. Are there plans to change the user interface to accommodate these different — say — company KPIs? Or would you keep using the same interface as it is now?
Milan Galik - President, CEO and Director
This is an interesting question. Let me go a little deeper. The prediction market interface we provide to our customers today covers products provided by ForecastEx, Kalshi, and CME. These are exchanges regulated by the CFTC. The KPI contracts that Cboe will be offering are classified as binary options. The end result is the same as far as payouts are concerned, but they are actually structured as both bullish and bearish options that can be bought or sold. Also, bullishness and bearishness are not tied to each other. The combination of the bullish price and the bearish price could be greater than $1, which is impossible in a CFTC-regulated market. So we'll bind them together. We'll present them on an interface familiar to our prediction market traders, but they'll also appear on the regular options interface, just like the binary options that Cboe currently has on the index.
presenter
Our next question comes from KBW's Chris Allen.
Christopher Allen - Keefe, Bruyette, & Woods, Inc., Research Division
I want to go back to the lackluster trading activity of the quarter. Trading activity per account fell to its lowest level in quite some time. I wonder if you can provide some clarification on the different customer segments — is the decline in all customer segments generally, or is the decline in some customer segments more pronounced than others?
Milan Galik - President, CEO and Director
It's universal.
Christopher Allen - Keefe, Bruyette, & Woods, Inc., Research Division
Understood. Then maybe ask about Japan's announcement of a margin and full payment securities lending program. Does any other country have similar opportunities to expand your local services — as far as major markets are concerned?
Milan Galik - President, CEO and Director
Yes, but we'd rather not discuss it so we don't show the blueprint to some competitors who might be listening to us. We will announce when we have finished and have products that can be delivered.
presenter
Thank you. Ladies and gentlemen, there are no more questions in the queue. Now return the phone to Nancy for a final word.
Nancy Stuebe - Director of Investor Relations
Thank you all for attending today. As a reminder, a replay of this call will be provided on our website, and we will post a clean transcript version on our website tomorrow. Thanks again, we'll talk later next season.
presenter
This concludes today's call. You can now disconnect. Thank you all for participating.