Interactive Brokers is a safe online broker known for its Trader’s Workstation platform, zero commission trades, great variety of trading tools and leading pricing for professionals. We recommend it to casual investors and advanced traders.
|Broker Name||Interactive Brokers|
|Regulation||SEC in the US, FCA in the UK’s|
|Countries of regulation||UK, USA, India, Australia, Canada, Japan, Hong Kong|
|Tradable Assets||Stock, ETF, Forex, Fund, Bond, Options, Futures, CFD, Crypto, Warrants, Structured Products|
|Deposits||ACH, Check, Online bill payment, Direct Rollover (IRA accounts only)|
Interactive Brokers is the best online broker for international trading, day trading, mobile trading, options trading, futures trading and professional trading. They offer users access to global investment options including stocks, options, futures, and bonds across 125 markets in 31 currencies. Interactive Brokers gives advanced traders access to the lowest margin and commission rates among other brokers and the industry leading Traders Workstation platform. Although they lack in beginners trading features, they continue to invest in more starter-friendly products, educational resources and features like their ‘Client Portal’.
Founded in 1978 by Thomas Peterffy, who is an American Stock Exchange (AMEX) seat holder, Interactive Brokers today serves 125 countries through 24 global offices. The companies’ base is Greenwich, CT and is listed on the NASDAQ 400 Index.
1. Fees and Spreads
Interactive Brokers fee structure is complex. There are dozens of trading options/fees. These depend on the instrument traded, amount and account type. There are three types of commissions for trading U.S. equities. Interactive Brokers offer two main pricing plans:
- IBKR Pro (for professional investors)
- IBKR Lite (for more casual investors)
Interactive Brokers was founded to primarily serve professional traders and large institutional investors (hedge funds and other highly leveraged, fast-moving trading groups). Their fee structure delivers the lowest possible commission schedule to this key clientele. In recent years they have developed tools to also assist the more casual trader and investor.
IBKR Lite Fees
- No inactivity or data fees
- All US stock and ETF trades cost $0
- Options trades follow normal IBKR Pro pricing
- IBKR Lite has a lower order execution quality
With IBKR Lite, they make money off order flow. The product is designed for the casual investor.
IBKR Pro Fees
Standard fixed price US stock trades per trade value are:
- $.005 per share
- minimum cost $1.00
- maximum cost 0.5%
For order sizes of several hundred shares, IB is a fantastic bargain. If though you trade several thousand or hundreds of thousands of shares, they quickly become expensive. The tiered pricing option starts at $.0035 per share. IBKR Pro is not a good choice for trading large share lots of penny stocks.
IBKR Pro Options
IB offers a tiered commission option for US exchange contracts using IB SMART routing.
- Premiums > $.10 equals $.65 per contract with a $1.00 minimum and no maximum.
- Premiums between $.05 and $.10, the rate is $.50 per contract.
- Premiums < $.05, the rate is $.25 per contract.
Other IBKR Pro Benefits
IB does not accept payment for order flow, a key element in quality order execution. Too, IB has the industry’s lowest margin rates. These vary from a high of 1.55% down to a highly attractive 0.75% for clients with more than $1 million traded with the firm.
IBKR Pro Non-Trading Fees:
For new or casual traders, the minimums and miscellaneous fees can be quite high. The easiest way to avoid them is to maintain a $100,000 balance or spend at least $30 in monthly commissions. Charges for inactivity can reach up to $20 per month. For everyday investors, we recommend IBKR Lite.
Interactive Brokers pricing summary chart:
|Stock Trade Fee (per trade)||$0|
|Options Base Fee||$0|
|Options Per Contract Fee||$0.65|
|Mutual Fund Trade Fee||$14.95|
|Broker Assisted Trades Fee||$30.00|
|ETF Trade Fee||$0.005|
2. Deposits and Withdrawals
Depositing and withdrawing on Interactive Brokers is fast end simple. IB recently focused on easing their on-boarding process. The trader must e-sign numerous forms to get an account functioning. Most features are available to use as soon as an account opens.
Traders can open an account without making a deposit. They must fund it within 90-days of opening or IB will close it. The minimum deposit to open an account is $100. A $110,000 minimum is required to open a portfolio margin account.
There is no charge for the first withdrawal (of any kind) in a calendar month. IB does charge withdrawal fees for each subsequent withdrawal. IB supports the following withdrawal requests:
- Wire transfer
- US ACH transfer (US accounts only)
- Check (only for US currency and a US mailing address)
- Canadian EFT transfer (Canadian accounts only)
- SEPA (Single Euro Payments Area) Initiated at IB
- BACS (GBP withdrawals only)
- GIRO/ACH (available for HKD, CNH, and SGD)
- NZD ACH (available for NZD withdrawals only)
Accounts not in the IB Secure Login System have a limit in withdrawal amount. Account-holders not using a security device have limited daily withdrawal of $50,000. Unsecured accounts may only withdraw up to $100,000 over five-business days. All withdrawals are sent in the name of the account holder.
3. Markets and Products
Interactive Brokers offers its users to trade a wide range of products including stocks, options, futures, and bonds across 125 markets in 31 currencies. They add new products based on customer demand.
IB offers 26,000 global funds from 285+ fund families including Bitcoin futures trading. Investors can trade every asset class on their Mosaic and TWS desktops. Lite Account Client Portal users must switch to TWS to execute international trades. Investors can trade the following:
- Stocks long and short
- OTCBB (penny stocks)
- Mutual funds (IB is the world’s largest mutual fund marketplace)
- Bonds: corporate, municipal, treasury, CDs and international
- Single leg and multi-leg options (up to 8 legs)
- Futures and futures options
- 135 International exchanges are connected. They trading stocks, options, futures, forex, bonds, funds, and CFDs
- Forex (23 currencies, 115 trading pairs)
- Fractional share trading of US stocks (NYSE, AMEX, NASDAQ, ARCA, or BATS, as well as OTC)
- Pink U.S. penny stocks (with average daily volume above $10 million and market cap above $400 million. Non-U.S. stocks not currently available for fractional shares trading)
- IPOs, warrants and single stock futures
IB Robo-advisory and interactive advisors are integrated into the website and mobile app.
4. Trading Tools and Charts
Interactive Brokers technical tools let traders create flexible order types on TWS, Client Portal and Mobile app.
- Conditional Orders based on: price, volume, daily P&L, margin cushion, number of shortable shares and rebate from the trading venue.
- Portfolio Builder creates a tailored strategy to construct a portfolio of stocks.
- Share and Dollar lots for any asset class.
- Tax Optimizer selects tax lot defaults to maximize several factors.
- Portfolio Analyst helps casual investors analyze their holdings and consolidate accounts
- Portfolio Checker lets traders assess portfolio health. Compares performance to 200 global benchmarks and evaluates risk measures.
- Trader’s Journal is a note-taking feature to record/save trading notes/ideas on any product.
- Impact dashboard traders can gather investment criteria from 13 impact values and principles. These include: Clean Air, Pure Water, Ocean Life, Land Health, Consumer Safety, Ethical Leadership, Gender Equality, Racial Equality, LGBTQ Inclusion, Company Transparency, Sustainable Product Lifecycle, Mindful Business Models, Fair Labour & Thriving Communities.
Interactive Brokers charting is interactive. Traders can see 100+ predefined indicators or create their own. Traders can toggle and zoom between 15-time frames. They can trade from their charts. The platform’s advanced settings help integrate trading systems and build custom dashboards.
5. Regulation and Reputation
Interactive Brokers is a publicly traded company. It is regulated and monitored by the US SEC and global authorities. They have a global client reach. IB has an above-average commitment to security. They meet or exceed industry standards. Security precautions include:
- Mobile app users can log in with biometric (face or fingerprint) recognition.
- Many forms of two-factor authentication.
- Mobile Key, their mobile app for two-factor authentication. It supports fingerprint and PIN verification.
- IB carries excess SIPC insurance provided by Lloyd’s of London. Each account is covered for $150 million. Clients with full SIPC protection, Lloyd’s provides an extra $30 million in coverage. This includes $900,000 in cash. All accounts are subject to a total limit of $150 million.
- IB’s Bank Deposit sweep program helps clients supplement existing SIPC coverage. They can get $2,500,000 of FDIC Insurance on eligible cash balances.
6. Trading Platform
Interactive Brokers are global leaders in trading technology. Their tools help investors to trade, to access client forums, conduct market overviews and analyze portfolios. Their investment and web trading platform tools are user-friendly and customizable. All platforms offer streaming data that is continuously updated. IB also routes to several venues using a new order type called Mid-Price Order. This is a floating order which adjusts to market movements.
Interactive Brokers flagship platform is the Trader Workstation (TWS). This desktop-based program is highly customizable and supports global assets trading of all kinds. TWS is designed for the more seasoned, professional investors and ranks among the best trading platforms in the industry.
Professional tools: Seasoned trader tools include IB: Portfolio Builder, Options Strategy Lab, Algo Trading, Risk Navigator, Strategy Builder, Market Scanner, and Volatility Lab. Traders can also create extensive watch lists on equities, individual options contracts, futures, forex, warrants, CFDs and more. There are a staggering 494 data points traders can use for column customization.
IBot: IB’s predictive AI tool quickly handles customer requests and portfolio information. IBot handles orders, quotes and more. Its chat feature finds analytic tools and advanced order types. Users query directly via voice or typed commands: “What’s the last price of GOOG?” or “Chart AAPL vs. MSFT” or “Buy 100 shares of FB.” IBot remembers and keeps handy links to your most frequently used tools. It is available in TWS mobile and can be accessed by voice in the iPhone app.
TWS positives: Traders can enter orders from inside the matrix display or any TWS graph. Advanced algorithms help traders place large orders and access any market. IB has one of the most intelligent order routers in the world. It identifies price improvements, maximizes possible rebates, and achieve optimal execution. The TWS Mosaic interface lets traders arrange tools like building blocks to form a custom work/trading space. Over time you create the investing experience best for you. There is a demo version of TWS that clients use to learn the platform and test trading strategies.
TWS drawbacks: Pulling up an individual stock to trade can be tricky. TWS and IB follow a vast number of securities available. If you type in “AAPL” for Apple Computer, thousands of possible matches appear which can overwhelm non-professional traders. Too, several automated analysis tools (like Recognia) and newsfeeds are only available as paid subscription add-ons.
Client Portal: For less experienced traders, IB offers website-based Client Portal platform. This includes core features necessary to trade and manage a basic portfolio. Client Portal is the primary trading experience for IBKR Lite customers. It is far less robust, but far easier to use. We rate it good, but not great. It was introduced in late 2019 and continues to be a major area of focus for IB to attract retail traders and shows signs of improvement. Lite customers can enter free orders using any platform or mobile apps except IB Mobile Web.
Charting: IB’s charting is interactive. Traders can see 100+ predefined indicators or… create their own. Traders can toggle and zoom between 15-time frames. They can trade from their charts. The platform’s advanced settings help integrate trading systems and build custom dashboards.
Interactive Brokers mobile app has most of the web functionality and is supporter on all devices. It is not nearly as extensive as the TWS desktop or Client Portal platforms. All the asset classes can be traded on the mobile app. The mobile app gives traders an overview of their account. They can add/withdraw funds, view trade history, create watchlists, access news and view charts. Mobile watchlists are shared with TWS and Client Platform. Data streams in real-time.
7. Customer Support
Their telephone support system irritates. The digital assistant iBot is helpful on mobile devices. It integrates voice commands. It is powered by an AI engine that answers questions in plain English. IBot is available across the website and trading platforms. Their customer service array includes 24-hour weekday phone line with call back service, Online chat with a live human agent, Secure message center, AI-powered iBot sends customers to online FAQs and resources
In May 2020, IB launched its Securities Class Action Recovery solution. The automated service removes administrative burdens of joining securities class action lawsuits. It examines your positions and automatically detects filing eligibility. The service can submit claim filings to administrators to recover compensation. Court-awarded amounts are deposited into your account.
8. Education and research
Interactive Brokers is a market leader in research and education. IB provides a wide range of investor education programs. They are provided free and one need not log in to access them.
IB Traders Academy has a structured, rigorous curriculum. It is intended for financial professionals, investors, educators, and students. It helps them seek a better understanding of asset classes, markets, currencies, tools and functionality available on IB platforms. There are 45+ courses available to traders additional to quizzes and tests benchmark progress against learning objectives. Students learn at their own pace. The website includes a trading glossary, a FAQ section and daily expert webinars. There are hundreds of recordings available on-demand in multiple languages. Interactive Brokers allows investors to download a demo version of Traders Workstation which allows traders to learn its intricacies and practice placing complex trades.
Interactive Brokers Fundamentals Explorer combines research from Refinitiv and TipRanks. These offer deep fundamental research for every covered stock. In-depth mutual fund data from Lipper is presented in a similar format. Hovering over a field shows more information and peer comparisons. Premium research has an additional cost. IB’s Trader’ Insight blog covers many topics. These include outlooks for US, Asia-Pacific, Europe, and various market sectors.
IB Quants blog is made available to traders who create their own algorithms. Also to those who model financial markets.
Interactive Brokers is a great online broker for professional traders based on its Trader’s Workstation platform, zero commission trades, 70 optional order types and over 137 global assets to trade. The Client Portal web platform, extensive educational material, Traders Academy and $0 ETF and stock trades makes them a great broker for beginners as well.
Their news feed and research tools are second to none. IB is the natural next step for those who may have outgrown their current broker’s offerings. It is ideal for those looking to apply more complex strategies.
We recommend Interactive Brokers to both, casual investors and advanced traders.
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