The following discussion should be read in conjunction with the unaudited
condensed consolidated financial statements and the related notes in Item 1,
included elsewhere in this report. In addition to historical information, the
following discussion also contains forward-looking statements that include risks
and uncertainties. Our actual results may differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth under the heading "Risk Factors" in our Annual Report
on Form 10-K filed with the Securities Exchange Commission ("SEC") on March 1,
2021 and elsewhere in this report.

When we use the terms "we," "us," and "our," we mean IBG, Inc. and its subsidiaries for the periods presented.

Introduction

Interactive Brokers Group, Inc. (the "Company" or "IBG, Inc.") is a holding
company whose primary asset is its ownership of approximately 23.5% of the
membership interests of IBG LLC. The remaining approximately 76.5% of IBG LLC
membership interests are held by IBG Holdings LLC ("Holdings"), a holding
company that is owned by our founder and Chairman, Mr. Thomas Peterffy and his
affiliates, management and other employees of IBG LLC, and certain other
members. The table below shows the amount of IBG LLC membership interests held
by IBG, Inc. and Holdings as of September 30, 2021.

                       IBG, Inc.     Holdings        Total
Ownership %                23.5%        76.5%       100.0%
Membership interests  98,175,951  319,880,492  418,056,443


We are an automated global electronic broker. We custody and service accounts
for hedge and mutual funds, exchange-traded funds ("ETFs"), registered
investment advisers, proprietary trading groups, introducing brokers and
individual investors. We specialize in routing orders and executing and
processing trades in stocks, options, futures, forex, bonds, mutual funds and
ETFs on more than 135 electronic exchanges and market centers in 33 countries
and 25 currencies seamlessly around the world.

As an electronic broker, we execute, clear and settle trades globally for both
institutional and individual customers. Capitalizing on our proprietary
technology, our systems provide our customers with the capability to monitor
multiple markets around the world simultaneously and to execute trades
electronically in these markets at a low cost, in multiple products and
currencies from a single trading account. The ever-growing complexity of
multiple market centers has provided us with opportunities to build and
continuously adapt our order routing software to secure excellent execution
prices.

Since our inception in 1977, we have focused on developing proprietary software
to automate broker-dealer functions. The proliferation of electronic exchanges
and market centers over the last three decades has allowed us to integrate our
software with an increasing number of trading venues into one automatically
functioning, computerized platform that requires minimal human intervention.

Our customer base is diverse with respect to geography and segments. Currently,
approximately 76% of our customers reside outside the U.S. in over 200 countries
and territories, and over 50% of new customers come from outside the United
States ("U.S.") approximately 62% of our customers' equity is in institutional
accounts such as hedge funds, financial advisors, proprietary trading desks and
introducing brokers. Specialized products and services that we have developed
successfully attract these accounts. For example, we offer prime brokerage
services, including financing and securities lending, to hedge funds; our model
portfolio technology and automated share allocation and rebalancing tools are
particularly attractive to financial advisors; and our trading platform, global
access and low pricing attract introducing brokers.

Business Environment



During the quarter ended September 30, 2021 ("current quarter"), world equities
markets were mixed. While the U.S., the United Kingdom, Japan and Australia eked
out small gains, major market indices in Europe, Hong Kong and China were down.
Despite this, there has been continued global interest in financial markets amid
the search for higher yields in zero and negative-interest rate environments,
especially by individuals newly attracted to these markets, which led to active
trading.

The following is a summary of the key economic drivers that affect our business and how they compared to the prior-year quarter:



Global trading volumes. According to industry data, average daily volumes in
U.S. exchange-listed equity-based options increased by 28% and in U.S. futures
by 14%, while U.S. listed cash equities volume decreased by 2% versus a very
active, pandemic-impacted prior-year quarter. Volumes were impacted positively
by investors looking for yield, although professional traders likely found fewer
opportunities to trade on lower market volatility. While market volatility
increased moderately over the course of the current quarter, average volatility
for the full current quarter was down substantially from a highly volatile
prior-year quarter. Against that backdrop

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are growing numbers of investors who continue to participate in the financial
markets out of a desire to earn higher yields on investments, which cannot be
achieved in bank accounts in a zero or negative interest rate environment.

These competing factors led to mixed results in industry and company volumes.
Note that while options, futures and U.S. cash equities volumes are readily
comparable measures, they reflect most but not all of the global volumes that
generate our commission revenue. See "Trading Volumes and Customer Statistics"
below in this Item 2 for additional details regarding our trade volumes,
contract and share volumes, and customer statistics.

Volatility. U.S. market volatility, as measured by the average Chicago Board
Options Exchange Volatility Index ("VIX®"), fell markedly to 18, from 26 in the
prior-year quarter. While last year's unusual COVID-19 pandemic-induced spike in
market volatility to over 30 has moderated, it remains elevated compared to
pre-pandemic levels.

In general, higher volatility improves our performance because it correlates
with customer trading activity across product types. Various market
cross-currents led to mixed results across our major product types: customer
options and stock volumes were up 34% and 100%, respectively, while futures and
foreign exchange volumes declined 6% and 35%, respectively, compared to the
prior-year quarter. Our customer stock volume reflected unusually strong trading
in low-priced stocks, without which the increase in share volume was 20%, well
above the change in industry volume. Despite the current quarter's lower average
volatility than the prior-year quarter, investors sought to achieve higher
yields on their investments in the zero or negative interest rate environments
that exist around the world. These trends, combined with the increasing
interconnectedness of investors to one another and to the markets, led to an
influx of new accounts and strong increases in trading volume.

Interest Rates. The U.S. Federal Reserve's target federal funds rate range in
the current quarter remained at zero to 0.25%, similar to rates in many other
currencies, with the exception of those where rates are negative. U.S. rates
also continue to exhibit a relatively flat yield curve. Both of these factors
present us with fewer investment opportunities for interest-sensitive assets,
and lead to a narrower net interest margin.

Low rates reduce the interest we earn on our segregated cash, the majority of
which is invested in U.S. government securities and related instruments.
Further, our margin balances are tied to benchmark rates, with a minimum charge
of 0.75% in U.S. dollars, so low interest rates limit the interest we receive on
margin lending to our customers. We continue to offer among the lowest rates in
the industry on margin lending, and we believe our low rates are an important
factor that attracts customers to our platform.

As an offset, lower rates also reduce our interest expense. For example, in U.S.
dollars we pay interest to customers only when the federal funds effective rate
is above 0.50%, and in currencies with negative rates we collect interest on a
portion of customer cash balances. As an indirect positive effect, we believe
low and negative benchmark world interest rates have been a factor leading to
the active trading we have experienced, as investors have sought to enter
securities markets to achieve higher yields on their investments.

Net interest income increased compared to the prior-year quarter while the
average federal funds effective rate remained unchanged from the prior-year
quarter at 0.09%. While the interest we pay on customer cash balances and earn
on customer margin loans is based on spreads that are compressed at low
benchmark rates, rising balances have partially compensated for this reduction
in net interest income. Despite flat benchmark rates, a 64% increase in our
average margin loan balances contributed to a 70% rise in margin loan interest
from the prior-year quarter. Further, a strong inflow of new accounts worldwide
drove average customer credit balances up 14% over the prior-year quarter.

Fueled by higher average balances and strong securities lending results, our net interest income grew 41% over the prior-year quarter, and our overall net interest margin increased from 0.94% to 1.13%.



Currency fluctuations. As a global electronic broker trading on exchanges around
the world in multiple currencies, we are exposed to foreign currency risk. We
actively manage this exposure by keeping our net worth in proportion to a
defined basket of 10 currencies we call the "GLOBAL" to diversify our risk and
to align our hedging strategy with the currencies that we use in our business.
Because we report our financial results in U.S. dollars, the change in the value
of the GLOBAL versus the U.S. dollar affects our earnings. During the current
quarter the value of the GLOBAL, as measured in U.S. dollars, decreased 0.41%
compared to its value at June 30, 2021, which had a negative impact on our
comprehensive earnings for the current quarter. A discussion of our approach for
managing foreign currency exposure is contained in Part I, Item 3 of this
Quarterly Report on Form 10-Q entitled "Quantitative and Qualitative Disclosures
about Market Risk.

Overall, active markets and a search for higher yields in negative and zero
interest rate environments, plus investor interest in the financial markets and
the growing interconnectedness of investors with the markets and each other,
have resulted in more people actively engaging in the markets. Customers
continue to seek our superior technology, execution capabilities and our ability
to offer a broad range of products and global market access.

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Financial Overview



We report non-GAAP financial measures, which exclude certain items that may not
be indicative of our core operating results and business outlook and may be
useful in evaluating the operating performance of our business and provide a
better comparison of our results in the current period to those in prior and
future periods. See the "Non-GAAP Financial Measures" section below in this Item
2 for additional details.

Diluted earnings per share were $0.43 for the current quarter, compared to $0.58
for the prior-year quarter. Adjusted diluted earnings per share were $0.78 for
the current quarter, compared to $0.53 for the prior-year quarter. The
calculation of diluted earnings per share is detailed in Note 4 - "Equity and
Earnings per Share" to the unaudited condensed consolidated financial statements
in Part 1, Item 1 of this Quarterly Report on Form 10-Q.

For the current quarter, net revenues were $464 million and income before income taxes was $234 million, compared to net revenues of $548 million and income before income taxes of $334 million in the prior-year quarter. Adjusted net revenues were $650 million and adjusted income before income taxes was $420 million in the current quarter, compared to adjusted net revenues of $518 million and adjusted income before income taxes of $304 million in the prior-year quarter.



Diluted earnings per share were $2.58 for the nine months ended September 30,
2021 ("current nine-month period"), compared to $1.58 for the nine months ended
September 30, 2020 ("prior-year nine-month period"). Adjusted diluted earnings
per share were $2.55 for the current nine-month period compared to $1.79 for the
prior-year nine-month period.

For the current nine-month period, net revenues were $2,111 million and income
before income taxes was $1,414 million, compared to net revenues of $1,619
million and income before income taxes of $864 million in the prior-year
nine-month period. Adjusted net revenues were $2,096 million and adjusted income
before income taxes was $1,399 million in the current nine-month period,
compared to adjusted net revenues of $1,622 million and adjusted income before
income taxes of $971 million in the prior-year nine-month period.

The financial highlights for the current quarter were:

?Commission revenue increased $32 million, or 11%, from the prior-year quarter on higher customer stock and options trading volumes.

?Net interest income increased $79 million, or 41%, from the prior-year quarter on higher margin loan balances and strong securities lending activity.



?Other income decreased $199 million from the prior-year quarter. This decrease
was mainly comprised of (1) $191 million related to our strategic investment in
Up Fintech Holding Limited ("Tiger Brokers"), which decreased to a $185 million
mark-to-market loss in the current quarter from a $6 million mark-to-market gain
in the prior-year quarter; and (2) $30 million related to our currency
diversification strategy, which lost $3 million in the current quarter compared
to a gain of $27 million in the prior-year quarter; partially offset by (3) the
non-recurrence of a $13 million impairment loss on our investment in OneChicago
Exchange recognized in the prior-year quarter.

?Pretax profit margin was 50% for the current quarter, down from 61% in the prior-year quarter. Adjusted pretax profit margin for the current quarter was 65%, up from 59% in the prior-year quarter.

?Total equity at September 30, 2021 was $10.0 billion.



Because we report our financial results in U.S. dollars, the change in the value
of the GLOBAL versus the U.S. dollar affects our earnings. In connection with
our currency diversification strategy as of September 30, 2021, approximately
26% of our equity was denominated in currencies other than the U.S. dollar. In
the current quarter, our currency diversification strategy decreased our
comprehensive earnings by $43 million (compared to an increase of $72 million in
the prior-year quarter), as the U.S. dollar value of the GLOBAL decreased by
approximately 0.41% compared to its value as of June 30, 2021. The effects of
our currency diversification strategy are reported as (1) a component of other
income (loss of $3 million) in the consolidated statement of comprehensive
income and (2) other comprehensive income ("OCI") (loss of $40 million) in the
consolidated statement of financial condition and the consolidated statement of
comprehensive income. The full effect of the GLOBAL is captured in comprehensive
income.

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Certain Trends and Uncertainties



We believe that our current operations may be favorably or unfavorably impacted
by the following trends that may affect our financial condition and results of
operations:

?The COVID-19 pandemic has precipitated unprecedented market conditions with
equally unprecedented social and community challenges. The impact of the
COVID-19 pandemic going forward will depend on numerous evolving factors that
cannot be accurately predicted, including the duration and spread of the
pandemic, governmental regulations in response to the pandemic, and the
effectiveness of vaccinations and other medical advancements.

•Retail participation in the equity markets has fluctuated in the past due to
investor sentiment, market conditions and a variety of other factors. Retail
transaction volumes may not be sustainable and are not predictable.

?Consolidation among market centers may adversely affect the value of our IB SmartRoutingSM software.

?Price competition among broker-dealers may continue to intensify.

•Benchmark interest rates have fluctuated over the past years due to economic conditions. Changes in interest rates may not be predictable.

?Fiscal and/or monetary policy may change and impact the financial services business and securities markets.



•New legislation or modifications to existing regulations and rules could occur
in the future. Scrutiny of payment for order flow and order routing practices by
regulatory and legislative authorities has increased.

•We continue to be exposed to the risks and uncertainties of doing business in
international markets, particularly in the heavily regulated brokerage
industry. Such risks and uncertainties include political, economic and financial
instability, and foreign policy changes. For example, tensions between the U.S.
and China have escalated recently, and changes in Chinese governmental oversight
of Hong Kong and in the Chinese and Hong Kong capital markets could result in
adverse effects on our business and loss of assets we hold in the region.

•Our remaining market making activities will continue to be impacted by market
structure changes, market conditions, the level of automation of competitors,
and the relationship between actual and implied volatility in the equities
markets.

See "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K, filed
with the SEC on March 1, 2021, and elsewhere in this report for a discussion of
other risks that may affect our financial condition and results of operations.


?

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Trading Volumes and Customer Statistics



The tables below present historical trading volumes and customer statistics for
our business. Trading volumes are the primary driver in our business.
Information on our net interest income can be found elsewhere in this report.

TRADE VOLUMES:

(in thousands, except %)

         Cleared          Non-Cleared                                               Avg. Trades
        Customer       %     Customer       %  Principal       %     Total       %     per U.S.
Period    Trades  Change       Trades  Change     Trades  Change    Trades  Change  Trading Day
2018    328,099               21,880             18,663           368,642                1,478
2019    302,289     (8%)      26,346      20%    17,136     (8%)  345,771     (6%)       1,380
2020    620,405     105%      56,834     116%    27,039      58%  704,278     104%       2,795

3Q2020  160,015               14,701              7,453           182,169                2,846
3Q2021  193,218      21%      18,106      23%     8,228      10%  219,552      21%       3,431

2Q2021  196,659               16,130              7,975           220,764                3,504
3Q2021  193,218     (2%)      18,106      12%     8,228       3%  219,552     (1%)       3,431


CONTRACT AND SHARE VOLUMES:

(in thousands, except %)

TOTAL

            Options       %  Futures (1)       %        Stocks       %
Period  (contracts)  Change  (contracts)  Change      (shares)  Change
2018       408,406              151,762           210,257,186
2019       390,739     (4%)     128,770    (15%)  176,752,967    (16%)
2020       624,035      60%     167,078      30%  338,513,068      92%

3Q2020     163,972               39,186            87,514,614
3Q2021     214,988      31%      36,940     (6%)  172,828,874      97%

2Q2021     196,715               35,061           172,099,915
3Q2021     214,988       9%      36,940       5%  172,828,874       0%


ALL CUSTOMERS

            Options       %  Futures (1)       %        Stocks       %
Period  (contracts)  Change  (contracts)  Change      (shares)  Change
2018       358,852              148,485           198,909,375
2019       349,287     (3%)     126,363    (15%)  167,826,490    (16%)
2020       584,195      67%     164,555      30%  331,263,604      97%

3Q2020     153,612               38,685            85,893,357
3Q2021     205,797      34%      36,473     (6%)  172,082,316     100%

2Q2021     189,073               34,635           171,417,373
3Q2021     205,797       9%      36,473       5%  172,082,316       0%


_________________________

(1)Futures contract volume includes options on futures.




?

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CLEARED CUSTOMERS

            Options       %  Futures (1)       %        Stocks       %
Period  (contracts)  Change  (contracts)  Change      (shares)  Change
2018       313,795              146,806           194,012,882
2019       302,068     (4%)     125,225    (15%)  163,030,500    (16%)
2020       518,965      72%     163,101      30%  320,376,365      97%

3Q2020     137,660               38,405            83,246,086
3Q2021     186,656      36%      36,245     (6%)  169,002,045     103%

2Q2021     170,902               34,355           168,601,027
3Q2021     186,656       9%      36,245       6%  169,002,045       0%


PRINCIPAL TRANSACTIONS

            Options       %  Futures (1)       %       Stocks       %
Period  (contracts)  Change  (contracts)  Change     (shares)  Change
2018        49,554                3,277           11,347,811
2019        41,452    (16%)       2,407    (27%)   8,926,477    (21%)
2020        39,840     (4%)       2,523       5%   7,249,464    (19%)

3Q2020      10,360                  501            1,621,257
3Q2021       9,191    (11%)         467     (7%)     746,558    (54%)

2Q2021       7,642                  426              682,542
3Q2021       9,191      20%         467      10%     746,558       9%


________________________

(1)Futures contract volume includes options on futures.

CUSTOMER STATISTICS:



Year over Year                                    3Q2021    3Q2020   % 

Change


Total Accounts (in thousands)                      1,536       981        

57%


Customer Equity (in billions) (1)                $ 353.8   $ 232.7

52%



Cleared DARTs (in thousands) (2)                   2,017     1,629        

24%


Total Customer DARTs (in thousands) (2)            2,263     1,832        

24%



Cleared Customers
Commission per Cleared Commissionable Order (3)  $  2.46   $  2.69       (9%)
Cleared Avg. DARTs per Account (Annualized)          343       442      (22%)


Consecutive Quarters                              3Q2021    2Q2021   % Change
Total Accounts (in thousands)                      1,536     1,414         

9%


Customer Equity (in billions) (1)                $ 353.8   $ 363.5

(3%)



Cleared DARTs (in thousands) (2)                   2,017     2,082       

(3%)


Total Customer DARTs (in thousands) (2)            2,263     2,304       

(2%)



Cleared Customers
Commission per Cleared Commissionable Order (3)  $  2.46   $  2.38         3%
Cleared Avg. DARTs per Account (Annualized)          343       382      (10%)


________________________

(1)Excludes non-customers.

(2)Daily average revenue trades ("DARTs") are based on customer orders.

(3)Commissionable order - a customer order that generates commissions.


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Results of Operations



The table below presents our consolidated results of operations for the periods
indicated. The period-to-period comparisons below of financial results are not
necessarily indicative of future results.

                                       Three Months Ended September 30,     

Nine Months Ended September 30,


                                             2021              2020               2021              2020

                                                 (in millions, except share 

and per share amounts)

Revenues


Commissions                           $             311    $        279    $           1,030    $        824
Other fees and services                              49              45                  160             123
Other income (loss)                                (170)             29                   68              25
Total non-interest income                           190             353                1,258             972

Interest income                                     325             240                1,022             853
Interest expense                                    (51)            (45)                (169)           (206)
Total net interest income                           274             195                  853             647
Total net revenues                                  464             548                2,111           1,619

Non-interest expenses
Execution, clearing and
distribution fees                                    61              74                  183             227
Employee compensation and benefits                   98              77                  291             239
Occupancy, depreciation and
amortization                                         19              17                   58              51
Communications                                        8               6                   24              19
General and administrative                           44              37                  138             206
Customer bad debt                                      -              3                    3              13
Total non-interest expenses                         230             214                  697             755
Income before income taxes                          234             334                1,414             864
Income tax expense                                   28              32                  116              65
Net income                                          206             302                1,298             799
Less net income attributable to
noncontrolling interests                            164             256                1,057             675
Net income available for common
stockholders                          $              42    $         46    $             241    $        124

Earnings per share
Basic                                 $             0.44   $        0.59   $             2.60   $        1.60
Diluted                               $             0.43   $        0.58   $             2.58   $        1.58

Weighted average common shares
outstanding
Basic                                        96,229,958      78,509,625           92,814,767      77,543,008
Diluted                                      96,989,968      79,120,548           93,671,689      78,243,699

Comprehensive income
Net income available for common
stockholders                          $               42   $          46   $              241   $         124
Other comprehensive income
Cumulative translation adjustment,
before income taxes                                  (9)               8                 (21)               5
Income taxes related to items of
other comprehensive income                             -               -                    -               -
Other comprehensive income (loss),
net of tax                                           (9)               8                 (21)               5
Comprehensive income available for
common stockholders                   $               33   $          54   $              220   $         129

Comprehensive income attributable
to noncontrolling interests
Net income attributable to
noncontrolling interests              $              164   $         256   $            1,057   $         675
Other comprehensive income -
cumulative translation adjustment                   (31)              37                 (74)              24
Comprehensive income attributable
to noncontrolling interests           $              133   $         293   $              983   $         699


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Three Months Ended September 30, 2021 ("current quarter") compared to the Three Months Ended September 30, 2020 ("prior-year quarter")

Net Revenues

Total net revenues, for the current quarter, decreased $84 million, or 15%, compared to the prior-year quarter, to $464 million. The decrease in net revenues was due to lower other income partially offset by higher net interest income, commissions and other fees and services.

Commissions



We earn commissions from our cleared customers for whom we act as an executing
and clearing broker and from our non-cleared customers for whom we act as an
execution-only broker. We have a commission structure that allows customers to
choose between (1) an all-inclusive fixed, or "bundled", rate; (2) a tiered, or
"unbundled", rate that offers lower commissions for high volume customers where
we pass through regulatory and exchange fees; or (3) our IBKR LiteSM offering,
which provides commission-free trades on U.S. exchange-listed stocks and ETFs
and generates no commission revenues for us but, instead, generates payments
from market makers and others to whom we route these orders, which are included
in commissions. Our commissions are geographically diversified.

Commissions, for the current quarter, increased $32 million, or 11%, compared to
the prior-year quarter, to $311 million, driven by higher customer trading
volumes, particularly in stocks and options. Total customer options contracts
and stock share volumes increased 34% and 100%, respectively, while futures
contracts volume decreased 6% compared to the prior-year quarter. Removing the
effect of trading in low-priced stocks, the stock share volume rose 20%. Total
DARTs for cleared and execution-only customers, for the current quarter,
increased 24% to 2.3 million, compared to 1.8 million for the prior-year
quarter. DARTs for cleared customers, i.e., customers for whom we execute
trades, as well as clear and carry positions, for the current quarter, increased
24% to 2.0 million, compared to 1.6 million for the prior-year quarter. Average
commission per commissionable order for cleared customers, for the current
quarter, decreased 9% to $2.46, compared to $2.69 for the prior-year quarter,
reflecting smaller average order sizes in options and foreign exchange, as well
as higher exchange rebates passed through to our customers.

Other Fees and Services



We earn fee income on services provided to our customers, which includes market
data fees, risk exposure fees, minimum activity fees, payments for order flow
from exchange-mandated programs, and other fees and services charged to
customers.

Other fees and services, for the current quarter, increased $4 million, or 9%,
compared to the prior-year quarter, to $49 million, driven by a 167% increase in
risk exposure fee income to $8 million; an 83% increase in payments for order
flow income from options exchange-mandated programs to $11 million; and a 19%
increase in market data fee income to $19 million; partially offset by an 86%
decrease in account activity fees to $1 million, as we eliminated account
activity fees for most account types effective July 1, 2021; and a 71% decrease
in IPO-related fee income to $2 million.

Other Income



Other income consists of foreign exchange gains (losses) from our currency
diversification strategy, gains (losses) from principal transactions, gains
(losses) from our equity method investments, and other revenue not directly
attributable to our core business offerings. A discussion of our approach to
managing foreign currency exposure is contained in Part I, Item 3 of this
Quarterly Report on Form 10-Q entitled "Quantitative and Qualitative Disclosures
about Market Risk."

Other income, for the current quarter, decreased $199 million to a $170 million
loss in the current quarter compared to a $29 million gain in the prior-year
quarter. This decrease was mainly comprised of $191 million related to our
strategic investment in Tiger Brokers, which decreased to a $185 million
mark-to-market loss in the current quarter from a $6 million mark-to-market gain
in the prior-year quarter; and $30 million related to our currency
diversification strategy, which lost $3 million in the current quarter compared
to a gain of $27 million in the prior-year quarter; partially offset by the
non-recurrence of a $13 million impairment loss on our investment in OneChicago
Exchange recognized in the prior-year quarter.

Interest Income and Interest Expense



We earn interest on margin lending to customers secured by marketable securities
these customers hold with us; from our investments in U.S. and foreign
government securities; from borrowing and lending securities; on deposits (in
positive interest rate currencies) with banks; and on certain customers' cash
balances in negative rate currencies We pay interest on customer cash balances
(in

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sufficiently positive interest rate currencies); for borrowing and lending securities; on deposits (in negative interest rate currencies) with banks; and on our borrowings.



Net interest income (interest income less interest expense), for the current
quarter, increased $79 million, or 41%, compared to the prior-year quarter, to
$274 million. The increase in net interest income was driven by higher average
margin loan balances and strong securities lending activity.

Net interest income on customer balances, for the current quarter, increased $40
million, compared to the prior-year quarter, driven by a $18.1 billion increase
in average margin loan balances; partially offset by a $6.4 billion decrease in
average segregated cash and securities balances. Outside the U.S., notably in
Europe, despite the proportionately higher growth in foreign currency cash
balances, negative benchmark interest rates in some currencies have affected our
ability to achieve acceptable yields on our segregated cash in this region. See
the "Business Environment" section above in this Item 2 for a further discussion
about the change in interest rates in the current quarter.

We earn income on securities loaned and borrowed to support customer long and
short stock holdings in margin accounts. In addition, our Stock Yield
Enhancement Program provides an opportunity for customers with fully-paid stock
to allow us to lend it out. We pay customers a rebate on the cash collateral
generally equal to 50% of the income we earn from lending the shares. We place
cash and/or U.S. Treasury securities, as collateral securing the loans in the
customer's account, in segregated accounts or at an affiliate acting as
collateral agent for the benefit of our customer.

In the current quarter, average securities borrowed balances decreased 20%, to
$3.6 billion while average securities loaned balances increased 82%, to
$10.5 billion, compared to the prior-year quarter. Lower average securities
borrowed balances reflected our success in supporting our customers' short
selling from in-house inventory, while higher average securities loaned balances
resulted in greater revenues from lending more of our customer's growing stock
holdings. Net interest earned from securities lending is affected by the level
of demand for securities positions held by our customers that investors were
looking to sell short. During the current quarter, net interest earned from
securities lending transactions increased $37 million, or 43%, compared to the
prior-year quarter, as we were able to satisfy investor demand for more of the
hard-to-borrow securities they sought to sell short. It should be noted that
securities lending transactions entered into to support customer activity may
produce interest income (expense) that is offset by interest expense (income)
related to customer balances.

The Company measures return on interest-earning assets using net interest margin
("NIM"). NIM is computed by dividing the annualized net interest income by the
average interest-earning assets for the period. Interest-earning assets consist
of cash and securities segregated for regulatory purposes (including U.S.
government securities and securities purchased under agreements to resell),
customer margin loans, securities borrowed, other interest-earning assets
(solely firm assets), and customer cash balances swept into FDIC insured banks
as part of our Insured Bank Deposit Sweep Program. Interest-bearing liabilities
consist of customer credit balances, securities loaned and other
interest-bearing liabilities.

Yields are generally a reflection of benchmark interest rates in each currency
in which the Company and its customers hold cash balances. Because a substantial
portion of customer cash and margin loans are denominated in currencies other
than the U.S. dollar, changes in U.S. benchmark interest rates do not impact the
total amount of segregated cash and securities, customer margin loans and
customer credit balances. Furthermore, because interest, when benchmark rates
are at higher levels, is paid only on eligible cash credit balances (i.e.,
balances over $10 thousand or equivalent, in securities accounts with over
$100 thousand in equity, and in smaller accounts at reduced rates), changes in
benchmark interest rates are not passed through to the total amount of customer
credit balances. Finally, the Company's policies with respect to currencies with
negative interest rates impact the yields on segregated cash and customer credit
balances as effective interest rates in those currencies fluctuate.

Generally, as benchmark interest rates rise, a larger portion of the interest
earned on securities lending transactions is reported as net interest income on
"Segregated cash and securities, net" instead of "Securities borrowed and
loaned, net" because interest earned on cash collateral held in specially
designated bank accounts for the benefit of customers, in accordance with the
U.S. customer protection rules, increases.


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The table below presents net interest income information corresponding to
interest-earning assets and interest-bearing liabilities for the periods
indicated.

                                            Three Months Ended September 30,
                                            2021                           2020

                                                     (in millions)

Average interest-earning assets
Segregated cash and securities        $         37,239                   $ 43,589
Customer margin loans                           46,636                     28,490
Securities borrowed                              3,567                      4,477
Other interest-earning assets                    7,426                      5,075
FDIC sweeps 1                                    2,707                      2,982
                                      $         97,575                   $ 84,613

Average interest-bearing liabilities
Customer credit balances              $         78,625                   $ 

68,867


Securities loaned                               10,489                      

5,756


Other interest-bearing liabilities                    -                       251
                                      $         89,114                   $ 74,874

Net Interest income
Segregated cash and securities, net   $             (4)                  $  

14


Customer margin loans 2                             141                     

83


Securities borrowed and loaned, net                 123                     

86


Customer credit balances, net 2                      8                      

8


Other net interest income 1,3                        9                         10
Net interest income 3                 $            277                   $    201

Net interest margin ("NIM")                       1.13%                      0.94%

Annualized Yields
Segregated cash and securities                   -0.04%                      0.13%
Customer margin loans                             1.20%                      1.16%
Customer credit balances                         -0.04%                     -0.05%

______________________________



(1)Represents the average amount of customer cash swept into FDIC-insured banks
as part of our Insured Bank Deposit Sweep Program. This item is not recorded in
the Company's condensed consolidated statements of financial condition.
Income derived from program deposits is reported in other net interest income in
the table above.
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(2)Interest income and interest expense on customer margin loans and customer
credit balances, respectively, are calculated on daily cash balances within each
customer's account on a net basis, which may result in an offset of balances
across multiple account segments (e.g., between securities and commodities
segments).

(3)Includes income from financial instruments that has the same characteristics
as interest, but is reported in other fees and services and other income in the
Company's condensed consolidated statements of comprehensive income. For the
three months ended September 30, 2021 and 2020, $2 million and $6 million were
reported in other fees and services, respectively, and $0 was reported in other
income.

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Non-Interest Expenses



Non-interest expenses, for the current quarter, increased $16 million, or 7%,
compared to the prior-year quarter, to $230 million, mainly due to a $21 million
increase in employee compensation and benefits and a $7 million increase in
general and administrative expenses; partially offset by a $13 million decrease
in execution, clearing and distribution fees. As a percentage of total net
revenues, non-interest expenses were 50% for the current quarter and 39% for the
prior-year quarter.

Execution, Clearing and Distribution Fees



Execution, clearing and distribution fees include the costs of executing and
clearing trades, net of liquidity rebates received from various exchanges and
market centers, as well as regulatory fees and market data fees. Execution fees
are paid primarily to electronic exchanges and market centers on which we trade.
Clearing fees are paid to clearing houses and clearing agents. Market data fees
are paid to third parties to receive streaming price quotes and related
information.

Execution, clearing and distribution fees, for the current quarter, decreased
$13 million, or 18%, compared to the prior-year quarter, to $61 million,
primarily driven by a $10 million decrease in exchange fees due to greater
capture of liquidity rebates from certain exchanges and a $5 million decrease in
regulatory fees on reduced rates. As a percentage of total net revenues,
execution, clearing and distribution fees were 13% for the current quarter and
14% for the prior-year quarter.

Employee Compensation and Benefits



Employee compensation and benefits include salaries, bonuses and other incentive
compensation plans, group insurance, contributions to benefit programs and other
related employee costs.

Employee compensation and benefits expenses, for the current quarter, increased
$21 million, or 27%, compared to the prior-year quarter, to $98 million,
associated with a 31% increase in the average number of employees to 2,450 for
the current quarter, compared to 1,869 for the prior-year quarter. We continued
to add staff in customer service, compliance and software development. As we
continue to grow, our focus on automation has allowed us to maintain a
relatively small staff. As a percentage of total net revenues, employee
compensation and benefits expenses were 21% for the current quarter and 14% for
the prior-year quarter. Employee compensation and benefits expenses as a
percentage of adjusted net revenues were 15% for the current and the prior-year
quarter.

Occupancy, Depreciation and Amortization

Occupancy expenses consist primarily of rental payments on office and data center leases and related occupancy costs, such as utilities. Depreciation and amortization expenses result from the depreciation of fixed assets, such as computing and communications hardware, as well as amortization of leasehold improvements and capitalized in-house software development.



Occupancy, depreciation and amortization expenses, for the current quarter,
increased $2 million, or 12%, compared to the prior-year quarter, to
$19 million, mainly due to higher costs related to the expansion of our physical
space for both offices and data centers. As a percentage of total net revenues,
occupancy, depreciation and amortization expenses were 4% for the current
quarter and 3% for the prior-year quarter.

Communications

Communications expenses consist primarily of the cost of voice and data telecommunications lines supporting our business, including connectivity to exchanges and market centers around the world.



Communications expenses, for the current quarter, increased $2 million, or 33%,
compared to the prior-year quarter, to $8 million. As a percentage of total net
revenues, communications expenses were 2% for the current quarter and 1% for the
prior-year quarter.

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General and Administrative

General and administrative expenses consist primarily of advertising; professional services expenses, such as legal and audit work; legal and regulatory matters; and other operating expenses.



General and administrative expenses, for the current quarter, increased
$7 million, or 19%, compared to the prior-year quarter, to $44 million,
primarily due to a $3 million increase in professional and legal fees related to
litigation and a $3 million increase in bank fees related to prior periods. As a
percentage of total net revenues, general and administrative expenses were 9%
for the current quarter and 7% for the prior-year quarter.

Customer Bad Debt

Customer bad debt expense consists primarily of losses incurred by customers in excess of their assets with us, net of amounts recovered by us.

Customer bad debt expense, for the current quarter, decreased $3 million, compared to the prior-year quarter, to less than $1 million.

Income Tax Expense



We pay U.S. federal, state and local income taxes on our taxable income, which
is proportional to the percentage we own of IBG LLC. Also, our operating
subsidiaries are subject to income tax in the respective jurisdictions in which
they operate.

Income tax expense, for the current quarter, decreased $4 million, or 13%,
compared to the prior-year quarter, to $28 million, primarily due to lower U.S.
income tax expense driven by lower income before taxes, partially offset by IBG,
Inc.'s higher average ownership percentage of IBG LLC which rose from 18.8% to
23.0%.

The table below presents information about our income tax expense for the periods indicated.

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