Patrick Moley: Yes, sure. So just was hoping we could maybe dive back into the 0DTE piece. Can you talk a little bit more about the breakout that you’re seeing there, the flow between institutional and retail and the sustainability there and maybe what it means for growth going forward.
Thomas Peterffy: Well, between institutional and retail, I never quite understood how to categorize something into institutional versus retail. So when the account is opened in the name of an entity rather than a person, we call that institutional. Now as you know, introducing brokers are entities. So even though there are individuals at the other end of the process, so I cannot tell you the breakout between what’s institutional, and what’s retail. But there are certainly many, many trading shops that I assume basically are institutional who trade a lot of options.
Milan Galik: Maybe I can give you a little bit of color. Perhaps it’s going to be helpful. The way we participate, and our customers participate in these zero-day options— expiring options – is that we often send the customer orders into price improvement auctions. Now that requires that we first find liquidity for the customer’s order from one of the market makers, one of the institutions that we are connected to. So a lot of the trading we do in these zero-day options, we have an institution on one side and a customer on the other side. It’s not obviously 100% of the volume, but it’s quite a bit of it. So in short, it’s mixed participation.
Operator: Our next question today will be coming from Brennan Hawken of UBS.
Brennan Hawken: I’d actually like to follow up on that 0DTE and try and get some color from a different perspective. You mentioned that it was a material part of the option volume. Could you give some more specific color around what proportion 0DTE represents today versus maybe a year ago? And when you think about…
Thomas Peterffy: We do not measure that.
Brennan Hawken: Okay. Well, then that’s straightforward. Maybe shifting to your perspective, Thomas. When you think about this product and its maturity, what inning do you think we are in its emergence and in its growth?
Thomas Peterffy: I think it takes— I would guess. Again, I’m just guessing. I mean I don’t have anything more than anybody else does. I’m guessing that the relative proportion of zero-date and very short date options is going to probably remain the same, but overall option volume will keep increasing. And I think that it’s probably going to increase by 5% to 10% a year going forward indefinitely.
Brennan Hawken: That’s overall option volume?
Thomas Peterffy: Yes.
Milan Galik: And there is one interesting thing, if I could add. There is one interesting thing happening in Europe. The European exchanges were obviously observing this phenomenon in the United States with envy, and they are going to be listing zero-day options or 5-day options that are listed every day. So every day you will have an expiring option in cash-settled index options, and that’s what they really are. So we will see some of the same phenomenon over time outside of the United States.
Thomas Peterffy: That is true, but European option volume— option volume on European exchanges is very, very tiny percentage of the total.
Milan Galik: Indeed.
Brennan Hawken: We’ll see what envy can get us on that front. I’d like to— and I totally appreciate that this is really sort of challenging to nail down. But when you were answering the prior question about the introducing broker, Thomas, sort of a couple of other questions jump to mind. You mentioned that the— your sense of the size of one of the introducing brokers has changed. It’s not as large as you thought. Was that—I was kind of curious about what might cause that. Was that because maybe they aren’t growing as fast as you had thought when you initially started to talk to them or that maybe the opportunity set to move a portion of their business over to Interactive is going to be just smaller than you had initially guessed?
Thomas Peterffy: To be quite frank, I was so enthusiastic when they first showed up on the scene, I estimated that they would have several million accounts. And now it turns out that they probably have hundreds of thousands of accounts.
Milan Galik: Well, maybe a little bit different color. So what remains the same is the institution that we’re talking about is one of the top multinational banks in the world by assets. So that remains the same. What we have learned recently is that instead of them bringing over a large chunk of the accounts that would be migrated from one broker to another, that’s not what we’re going to see. We’re going to see very little of that. What the hope is, is that a lot of the banking clients of these global institutions are going to become self-directed investors on the platform this bank is integrating with us. So that’s what really is changing. They are having hopes of turning their banking clients into brokerage clients.
Operator: Our next question will be coming from Daniel Fannon of Jefferies.
Daniel Fannon: Another question just on the account growth. I think, Thomas, you mentioned other introducing brokers that have signed up. Could you maybe talk to the discussions and/or the backlog of what might be smaller or the pipeline of how you were thinking about the broader introducing broker opportunity?
Thomas Peterffy: So there are several banks and brokerage firms around the world that have a relatively small customer base— it doesn’t pay for them to develop the technology that’s necessary to compete in this world today. So they are relatively easy to get onto our platform. And with our very automated platform, we hope that they will grow very quickly and other firms— other similar firms, seeing their situation, will either come along also or will drop out of the business. That’s what I see.
