My Top Financial Stock to Buy In October

High inflation and rapidly rising interest rates are challenging markets and causing ripple effects across asset prices.

While higher rates end up hurting many stocks, financial sector stocks can also benefit greatly. Banks can earn more interest on loans they make, and brokers can earn more interest on margin loans they offer traders.

Higher rates were a crucial element fueling Interactive Brokers' (NASDAQ: IBKR) excellent third-quarter earnings results. The broker also built up its key customer bases, boosting its commissions. Even better, there are indicators that Interactive Brokers can continue to perform, making it a top stock to buy in October. Let's take a closer look at the reasons why.

More investors are turning to Interactive Brokers

Interactive Brokers provides electronic brokerage services to tech-savvy investors. It offers a platform to trade stocks, options, futures, bonds, exchange-traded funds, and other financial products. It makes money in two ways: Through commissions from customers for executing and clearing their trades, and net interest income on margin loans it extends to customers.