Interactive Brokers was founded back in 1978 by the current chairman, Thomas Peterffy. The company focuses on providing brokerage services that offer broad market access, low costs, and excellent trade execution. As of February 2023, the company has over 2.1 million client accounts and $1.99 million in daily trade values, making it well-capitalized and publicly traded.
While this discount broker offers a competitive and transparent fee schedule with rock-bottom margin pricing, the platform’s complexity may make it more challenging to navigate for beginners. However, IBKR recently added a cryptocurrency access feature and fractional shares trading for U.S. and European stocks.
IBKR updates and adds new features regularly to its trading platforms, such as the GlobalTrader app that provides mobile access to markets, new funds, and products. The vast selection of order types makes it a superb platform for professional and advanced traders to execute sophisticated trading strategies across assets and markets. Resources for intermediate investors are also growing, but beginners may find the platform to have too many products and services.
Trading platform. The Interactive Brokers platform is one of the best in the industry, providing access to global markets in real time. It is highly customizable and provides advanced trading tools such as charting, screening, and modeling.
Comprehensive products. Interactive Brokers offers an extensive range of products to trade, including equities, options, futures, forex, bonds, and ETFs, providing traders with numerous opportunities to diversify their portfolios.
Low fees. Interactive Brokers boasts some of the lowest transaction fees in the industry, making it a good option for traders who want to keep costs low.
Margin rates. Interactive Brokers offers some of the lowest margin rates available, giving traders access to leverage opportunities that can help them maximize their profits.
Trading tools. Interactive Brokers offers a range of trading tools that traders can use when analyzing and executing their trades. These include real-time data, news, and research tools, as well as advanced charting features and modeling tools.
Mobile trading. Interactive Brokers offers mobile trading platforms that allow traders to access their accounts and trade on the go. These mobile apps provide traders with the same level of functionality as the desktop platform.
Security. Interactive Brokers takes security very seriously and has implemented robust security measures to protect its trading infrastructure and client data. These measures include SSL encryption, two-factor authentication, and firewalls.
Unparalleled range of investment assets. IBKR offers a wide range of investment assets, including stocks, ETFs, options, futures, spot currency pairs, cryptocurrencies, U.S. spot gold, bonds, mutual funds, hedge funds, robo-advisor, and managed portfolios.
Low commission and margin rates. IBKR has among the lowest margin rates available, 6.33% for IBKR Lite customers and 5.33% for IBKR Pro. This is best for larger traders as fees drop as order size increases.
Superior order execution. IBKR’s SmartRouting allows automatic routing of each leg of a trade to the lowest cost market maker.
An array of technical and fundamental trading tools. The Interactive Brokers Trader Workstation (TWS) and Client Portal trading platforms provide interactive, customizable charts, single window access to live quotes, technical research, and analysis tools.
International availability. IBKR serves global traders and international investors with access to 150 markets, 33 countries, and 24 currencies. Non-U.S. citizens from scores of countries can use IBKR as well.
IBKR’s SmartRouting is not available to IBKR Lite clients. Clients may experience less optimal pricing on trades due to the lack of SmartRouting. Their trades may be paid for order flows to a specific broker, potentially resulting in higher costs
Less experienced and less active investors may find IBKR’s platform intimidating. The vast array of products and services can be difficult to navigate. However, IBKR is working to improve the website’s user experience and navigation to make it more accessible.
IBKR provides a wide range of trading platforms, including two computer-based options: Client Portal and Trader Workstation.
With Client Portal, investors can monitor and manage their accounts, view detailed quotes, access a trade ticket, and utilize artificial intelligence chat with the new IBot. This platform is ideal for intermediate to advanced traders who want to check on positions, view real-time account information, and place basic trades.
TWS is a customizable platform designed for active traders and investors who require flexibility and access to multiple products. With over 100 order types, including algorithmic trading, TWS offers various features such as trading, order management, portfolio management tools, fundamental and technical charting, and the ability to place, modify, and manage orders directly from the chart.
Traders can also use hotkeys to place orders quickly and submit a conditional order that becomes active after specific conditions are met. Additionally, the platform offers streaming real-time quotes, charting, and news across other devices simultaneously.
Interactive Brokers Group has improved its separate account management website, which requires a separate login from the main trading platform, unlike other companies. Despite this separation, users can still execute trades on the site. The new design features a streamlined dashboard that displays account balances, top positions, simplified menus, and one-click access to "high-frequency" sections of the site, such as downloadable activity reports, tax forms, and funds transfer. Additionally, a trade button enables users to initiate an order ticket with ease.
Interactive Brokers is a leading online brokerage firm providing a wide range of financial products and services to investors around the world. If you want to register an account with Interactive Brokers, you will need to follow these simple steps:
Visit www.interactivebrokers.com. The first step in registering an account with Interactive Brokers is to navigate to their official website. You can type in www.interactivebrokers.com in your web browser or click on any link that leads to the website.
Click on the "Open an Account" button. Once you are on the Interactive Brokers website, click the "Open an Account" button located at the top right of the homepage.
Enter your personal details. After clicking on the "Start Application" button, you will need to fill in your personal details like your full name, date of birth, social security number, and phone number.
Provide your citizenship and tax residency details. You will also need to provide your citizenship and tax residency details, including your country of birth, passport details, and tax identification number.
Choose the type of account and funding method. After providing your personal details, select the type of account that you want to open, i.e., cash or margin account. Then, choose the funding method you prefer, such as a wire transfer or direct deposit.
Verify your identity. To verify your identity, Interactive Brokers will require you to upload a copy of your government-issued ID, like your passport, driver’s license, or national ID.
Complete the application and create a login. Finally, review and sign your account application, then create your login details to access your account.
There are two types of futures accounts available at Interactive Brokers: individual and institutional.
Individual traders can open a futures account with Interactive Brokers to trade futures on their own. This type of account requires a minimum deposit of $10,000 and is compatible with both retail and professional traders. Retail clients do not need any special credentials to trade futures, while professional clients must meet certain financial and experience criteria.
Institutional traders, such as hedge funds, commodity trading advisors (CTAs), and proprietary trading firms, can open an institutional futures trading account with Interactive Brokers. This account requires a minimum deposit of $100,000 and is suitable for those who trade large volumes of futures contracts. Institutional investors have access to portfolio margining, which enables them to post less margin for certain types of futures positions.
Interactive Brokers offers both standard and portfolio margining for futures accounts. Standard margining is the traditional method of requiring a fixed margin for each futures contract held. Portfolio margining, on the other hand, considers the correlation of positions within a portfolio and computes a margin requirement accordingly. This results in lower margin requirements for portfolios with offsetting positions compared to standard margining. Portfolio margining is only available to eligible clients who meet certain criteria.
Interactive Brokers also has futures trading through its IBKR Pro and IBKR Lite plans. The IBKR Pro plan is targeted towards professional traders and offers access to advanced trading tools and low, variable pricing. The IBKR Lite plan is aimed at casual investors and provides a simplified trading experience with fixed pricing. Both plans offer access to futures trading.
Interactive Brokers has introduced a groundbreaking scoring system for ESG factors, making it easier than ever for socially responsible investors to evaluate their holdings. This comprehensive system rates companies according to a wide range of specific metrics, such as their approach to reducing emissions or engaging with human rights and workforce issues, providing a total score for each ESG category overall. With the aid of easy-to-use graphical representations, investors can quickly identify companies with high scores and compare them. In addition, the broker’s IMPACT mobile app enables users to trade in or out of their ESG-focused holdings.
Interactive Brokers provides traders with a wide range of trading options, including stocks, bonds, ETFs, mutual funds, options, futures, and metals. Traders can also trade stocks on foreign exchanges, and the company offers cryptocurrency trading as well. Interactive Brokers is one of the few brokerages that offer cryptocurrency trading, providing traders with the opportunity to trade Bitcoin, Bitcoin Cash, Ethereum, and Litecoin at an attractive commission. This service is offered in partnership with Paxos Trust Company.
Recently, Interactive Brokers introduced event trading – which is binary options betting on whether specific events will occur in a set time frame. This type of trading involves betting on how a futures contract on the Chicago Mercantile Exchange will perform. Traders can place bets on "yes-no" questions, such as "Will Security X close above $10?". The broker charges a flat $0.10 per contract fee for event trading.
Interactive Brokers offers traders substantial flexibility when it comes to trading options. The company’s extensive range of investment choices, combined with its advanced trading platform, make it a popular choice among investors. Interactive Brokers provides traders with access to global markets, enabling them to take advantage of investment opportunities around the world. With its affordable commission structure, traders can choose to invest in a range of assets while keeping commissions low.
IBKR offers options trading across a range of products, including indices, commodities, and single stocks. Clients can trade vanilla options, contracts on volatility, and options on futures.
Futures trading is available across a broad range of asset classes, including indices, interest rates, currencies, and commodities. IBKR has direct access to electronic futures exchanges globally and complex products such as spreads and options on futures.
IBKR provides clients access to a broad range of global bond markets, from government and corporate bonds to Eurodollar futures and Treasury bonds.
Clients can invest in a wide range of mutual funds through IBKR, with access to more than 25,000 funds. Most mutual funds are commission-free, and investors can choose from a variety of managers and strategies.
Clients can easily manage and monitor their accounts through the user-friendly Client Portal. IBKR is an ideal platform for intermediate to advanced investors to view their account, track their positions, and place trades. The platform provides access to advanced charting, detailed quotes, news, and a trade ticket, and the new IBot feature allows for easy AI-powered chat.
For active traders and investors seeking extensive flexibility and advanced functionality, the customizable TWS platform is a perfect choice. It offers an array of technical and fundamental charting tools, order management tools, and trading capabilities. Additionally, expert traders can choose from over 100 order types and utilize hotkeys for speedy order placement. TWS also provides the option to stage orders for later execution or submit conditional orders.
Interactive Brokers offers what appears to be competitive pricing for forex trading, although it is difficult to make an exact comparison as the company does not publish its average forex spreads. However, a sample of one week’s worth of average spread data for EUR/USD was obtained, which totaled 0.6 pips after commission. For forex trading, commissions per side start at 0.00002 of the U.S. dollar trade value, with a minimum of $2 per order, but this can drop to 0.08 basis points for exceptionally active traders.
If a forex trader was to buy and then sell $100,000 worth of EUR/USD at Interactive Brokers, the commission equivalent would be around 0.40 pips, in addition to any prevailing spreads. This is considered relatively low compared to other brokers; IBKR Lite and IBKR Pro accounts do support forex trading but are not commission-free.
Interactive Brokers charges a minimum commission of $2 per side; thus, trading anything less than 100,000 units of currency becomes proportionally more expensive. This is similar to Saxo Bank’s $3 per-order fee for trading less than 50,000 units of currency. For forex traders, Interactive Brokers aggregates prices from 17 world’s largest interbank forex dealers and then charges a commission per trade, ranging from $16 to $40 per million round turn or $8 to $20 per side. This pricing is comparable to brokers that offer commission-based forex trading with agency execution.
Active traders can take advantage of discounts if certain monthly trading volume minimums are met. When trading over $1 billion worth of forex, the minimum charge drops from $2 per order to $1.5 and can go as low as $1 per order when reaching $5 billion per month in volume. Moreover, Interactive Brokers can handle large order sizes on a Request For Quote (RFQ) basis to minimize market impact and deliver the best possible execution to clients. In conclusion, Interactive Brokers’ forex trading pricing is competitive, and it offers discounts to active traders with larger volumes.
You’ll appreciate the IBKR Mobile app since it closely mirrors the desktop trading platforms, complete with identical asset types and orders. The intuitive workflow makes trading on the go a breeze. Furthermore, the mobile platform allows for comprehensive research, including screeners and options strategy tools, the same as the Client Portal.
If you’re seeking a new international trading app, look no further than this one. Depositing funds in your local currency and trading stocks via your mobile device has never been easier. With access to over 90 global stock exchanges across North America, Europe, and Asia, this app caters to both U.S. and non-U.S. investors eager for worldwide market access.
Are you passionate about ESG investing? The Impact app, specially designed by Interactive Brokers, can help you align your values with your investments. With impactful causes such as racial equality, clean water, and climate change among the options, you can make a difference. Selecting parameters for screening companies is a plus, and even small-scale traders can invest in fractional shares. Not to mention, your investments could result in rewards for the environment, you, and your inner circle.
To use the mobile app, you will need to register with Interactive Brokers first. Here are the steps you can follow to register:
Download the Interactive Brokers mobile app. To begin, you need to download the Interactive Brokers mobile app from the App Store or Google Play Store. Once the app is downloaded, open it.
Select "Create Account". Once the application opens, you will see various options. To create an account, select the "Create Account" option.
Select your country and account type. Next, you will select your country of residence and account type. For most users, the "Individual Account" option is appropriate.
Provide personal information. After selecting the account type, you will be prompted to provide personal information. This includes your name, date of birth, email address, phone number, and residential address.
Create a username and password. You will need to create a username and password for your Interactive Brokers account. Make sure to choose a unique and secure password.
Answer security questions. Interactive Brokers will ask you to select and answer three security questions. These will be used to verify your identity if needed.
Review and agree to the terms and conditions. Before submitting your application, make sure to review and agree to the terms and conditions. You may also be asked to provide additional information, such as a scanned copy of your ID or other documents.
Submit your application. Once you have provided all the required information, you can submit your application. Interactive Brokers will then review your application and may contact you for additional information if needed.
Interactive Brokers has recently shifted its focus towards improving the education available on its site. While the broker has previously catered well to advanced investors, it has now placed a bigger emphasis on providing content that is more relevant to beginners, even though it still primarily focuses on trading as opposed to long-term investing. One of the biggest improvements is the enhanced organization of content which makes it more accessible. The Trader’s Academy is a prime example, offering a variety of articles on investing, economics, and using broker tools, among others.
The content is segregated thematically and by skill level, catering to beginners, intermediate and advanced learners. The structure offers an easy place to initiate learning, making the content easy to navigate. Active traders will find the offerings especially useful; the broker provides webinars, courses on specific markets, and their own trading tools. There is also fundamental analysis and market commentary available from almost 100 professionals. Both free research resources and paid research services are available as well. Additionally, with the advent of the newly launched podcast, users can gain access to investment insights via a new format.
The progress made in Interactive Brokers’ educational resources is worth noting, as what was once seen as a downside in previous Interactive Brokers review now appears to be a solid positive. This emphasis on education will likely result in a broader range of users, from beginners to more advanced traders finding value in the site. The platform’s educational resources are now more user-friendly, providing a better learning experience to potential investors.
Interactive Brokers offers a variety of services, including stock and options trading for individual investors, financial advisors, hedge funds, and institutional clients. However, there are alternatives to Interactive Brokers that cater to different audiences or niches.
TradeStation. It is a brokerage firm and web trading platform that allows traders and investors to buy and sell a wide range of financial instruments, including stocks, options, futures, mutual funds, bonds, ETFs, and cryptocurrencies.
Robinhood. Robinhood offers commission-free trading of stocks, ETFs, and options on a user-friendly mobile app. It is ideal for new or casual investors who are not interested in advanced tools or charts.
TD Ameritrade. TD Ameritrade offers a comprehensive trading platform, including stocks, bonds, options, futures, and forex. It also offers educational resources and a robo-advisor service for those who prefer automated investing.
Fidelity Investments. Fidelity offers a broad range of trading services, including stocks, bonds, options, mutual funds, and ETFs. It also offers a robo-advisor service and a wealth of educational resources.
Charles Schwab. Charles Schwab offers a comprehensive trading platform with competitive pricing for stocks, options, and futures. It also offers robo-advisory and financial planning services for clients.
For those seeking a comprehensive platform, IBKR offers a massive array of tradable assets, various computer and mobile trading apps, efficient order routing, and a worldwide marketplace with low costs. Professional and sophisticated individual investors will struggle to find a more all-encompassing option. Intermediate investors have the advantage of online courses and daily webinars to continue learning.
IBKR Lite is suitable for average investors, while IBKR Pro offers discounted prices for larger orders with a commission structure that rewards volume, appealing to advanced traders.
Although IBKR excels in fractional share trading with many European stocks and ETFs, it may not be the best choice for inexperienced investors. However, it does make a compelling argument for being the go-to broker for intermediate and advanced traders.
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