IB Communiqué - March 31, 2006

Over the past two months, we have implemented several major enhancements to our technology and service offerings to ensure our customers have continued access to the industry’s premier direct access trading platform. Upgrades during this period included the following:

Options Volatility Trading

We recently added the ability to trade options based on volatility using the new volatility order type. To activate volatility trading, you must create a new type of layout called a "Volatility Page" which is available from the Page menu. When you create this page and add market data lines, you will see market quotes for options in terms of volatility instead of option premium prices. You may then enter and execute orders in the same manner as with option premium prices, except you will be entering prices in terms of volatility. In addition, the API is also available for volatility trading.

The volatility is calculated using a 100-step binary tree for American style options, and a Black-Scholes model for European style options. Interest rates are calculated using the settlement prices from the day’s Eurodollar futures contracts, and dividends are based on historical payouts.

There are a number of special configurations which include: the ability to submit delta neutral volatility orders, the ability to have your submitted price continuously and automatically updated as the underlying market price is changing, display of the volatility in daily or annual terms, the setting of a high and low underlying price range to cancel your order, and a reference price setting that allows for execution based on the average of the bid/ask volatility or bids and asks. Continuously updated prices will not incur cancellation fees.

For more details, see our release notes.

New & Enhanced Order Types

A number of years ago, Interactive Brokers led the industry with our guaranteed Volume Weighted Average Price orders, which ensured the daily market price for orders. This order type is particularly useful for larger orders that are at risk of moving the markets, thereby creating an inferior price execution. Our VWAP order has been enhanced to allow the entering of VWAP orders at any time during a trading day and to have the VWAP price computed from the time of cut-off (one minute after entry) to the end of the trading day. As an alternative, we will also allow the input of a starting cut-off time for the VWAP.* VWAP orders are computed by Bloomberg, displayed after market close, and are guaranteed to be executed. For details and restrictions on VWAP orders, see our VWAP Orders page.

We enabled Iceberg and Hidden orders for options, which provide the ability to hide some or all of your order size from the option exchanges. For more information, see our Iceberg or Hidden order pages.

In addition, we have added a trailing stop limit order which submits a limit order when the stop is hit, along with the ability to make a one-time adjustment to stop, stop limit, trailing stop, and trailing stop limit orders.

For information on these and other order types, see our Order Types page.

Combination Order Price Improvement

Interactive Brokers is the leader in best price execution for combination orders. We independently route your stock, option, and futures combination order legs or combination of legs (native spread orders) to the best priced venue. Now our smart routing software will provide for price improvement on combinations in pennies. In addition, we continue to guarantee against the risk of partially executed legs. See our Combination Routing order logic for more information.

SpreadTrader for Futures*

In addition to our ComboTrader which allows customers to assemble multiple instrument type legs, we have added SpreadTrader, which allows you to easily enter futures calendar spread trades. All prices are assembled in a matrix configuration and displayed in terms of spreads. To open SpreadTrader, choose Tools/SpreadTrader from the TWS menu. See our beta release notes for more information.

TWS Enhancements

The following enhancements were made to the Trader Workstation:

For details, and additional upgrades, see our latest release notes for build 857 and 858.

Inquiry/Trouble Ticket for Faster Resolution of Issues

We are pleased to announce the launch of our new Inquiry/Trouble Ticket system to assist you in receiving more timely responses to your issues.

Features of this system include:

To access the Inquiry/Trouble Ticket, log into Account Management through the service selector menu on the top right of our website. Choose the Inquiry/Trouble Ticket icon on the left once inside Account Management. You may also reach the inquiry ticket from the TWS by selecting Help/Account Management.*For more details, click here.

New Products

During the last two months, CME floor traded products, CBOT floor traded products and Swedish stocks were added. During the next two weeks we will be adding Japanese stocks. In addition, ECBOT added options on gold futures, and a new large Dow Jones futures contract with a multiplier of $25. For details and updates on all products, visit our Exchanges page.

Canadian Stock Price CAD $.01 Per Share

In our continuing effort to lead the industry in deep discount commissions, Canadian stock commissions have been lowered to CAD $.01 per share flat.

Daily Options Commentary

As most professional traders know, options market prices have built-in information which is not only useful to traders in the options marketplace, but also to traders in the stock and futures markets. Each hour starting at 12:00 until 16:00 ET, we post the top twenty symbols for implied volatilities, volatility gainers, volumes leaders, volumes gainers, volatility losers, implied/historical volatility, put/call ratios, and call/put ratios, along with written commentary from our trading desks. As an IB customer, you also have the benefit of seeing these indicators and others in real-time, using our TWS Market Scanner window. Visit our options commentary page for more information on how to read the options commentary indicators.

Real Time Reuters Streaming News

Interactive Brokers offers Reuters BridgeChannel - B Package as an add-on service for Interactive Brokers account holders. For $100 per month, you will receive Reuters BridgeChannel Basic Equities B Package, which includes Reuters streaming US Company News and US Markets News, as well as Reuters US market data, analytics, and charts. For those who require instantaneous streaming news on the US markets, this package is the standard for the industry.

You can sign up for BridgeChannel under Account Management/Trading Access. US market data will be added to your Reuters BridgeChannel ID for all your current market data subscriptions at no additional cost. You may sign up at least one day prior to the start of any month, and your subscription will take effect in the next month. You may cancel at any time and your cancellation will take effect as of the next month. For more details, see our Reuters BridgeChannel page.

Account Management

A reminder that Account Management is the place to view statements, fund your account, get Customer Service help, and change your account information. To access Account Management, go to the top right of the www.interactivebrokers.com banner and select a service from the service selector menu. Once inside Account Management you may select a service from the expanding menu system, or use the Customer Service icons on the left.

Canadian EFT for USD

In addition to Canadian dollar transfers, Electronic Funds Transfers (EFT) in Canada are now available for US dollar transfers. See our funding page for more information.

Combination Orders Now Available in the IB PaperTrader

The IB PaperTrader, our simulated trading environment, now includes the ability to enter and execute combination orders

*In TWS Beta 858.