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Review Interactive Brokers

Interactive Brokers (IBKR), founded in 1977 with $11.6 billion in equity capital, operates in over 150 global markets. Catering mainly to institutional and professional traders, IBKR offers a broad range of electronically traded products like stocks, options, futures, currencies, bonds, gold, crypto, and funds, averaging nearly 1,988,000 trades daily. The firm ensures investor safety with stringent regulations and offers up to $500,000 in protection for U.S. clients.

Interactive Brokers offers low trading fees, appealing to frequent and retail traders. It provides advanced tools for global market access and a wide range of investment products. While user-friendly with no minimum deposit, its complexity may deter beginners. Drawbacks include inactivity fees and sometimes slow customer support during busy market times.

 

Recommended to:

Interactive Brokers is recommended for experienced, frequent traders who seek low-cost access to a wide range of global markets and investment products, but may not be ideal for beginners.

Pros

  • Low trading costs
  • Reasearch tools are great
  • Wide range of offering

Cons

  • Complicated set up process
  • Trading platform is complicated

Review’s Keypoints

Country of regulation

USA, Ireland, UK, Hungary, India, Australia, Canada, Japan, Hong Kong, Singapore

Minimum deposit

$0

Time to open an account

1-3 days

Trading fees class

Low

Deposit with bank card

Not available

Number of base currencies supported

27

Products offered

Stocks

ETFs

Funds

Bonds

Options

Futures

CFD

Crypto

Warrants

Commodities

Depositing with electronic wallet

Not available

Demo account provided

Yes

Fees

IBKR offers low trading fees with industry-leading margin rates. US clients on the Lite plan enjoy free stock and ETF trading, while international clients can choose between fixed-rate and tiered pricing plans, each with its fee structure.

Pros

  • Trading costs are low
  • Low margin rates

Cons

  • None

Interactive Brokers Costs

Asset
Costs Level
Fee Costs
Asset
US Stocks
Costs Level
Low
Fee Costs
$1
Asset
EU Stocks
Costs Level
Average
Fee Costs
€3
Asset
US Options
Costs Level
Low
Fee Costs
$1
Asset
EU Options
Costs Level
Low
Fee Costs
€1.5
Asset
US Futures
Costs Level
Low
Fee Costs
$0.85
  • ***1000 in EUR or USD for the stocks transaction
  • *** Price per contract for Options & Futures

Transfers

IBKR offers limited deposit options, excluding credit/debit cards and electronic wallets, but provides various choices for US residents, including checks, online bill payments, ACH, and direct debit card deposits. Australian clients can use BPAY, and bank transfers may take up to three days. Withdrawals have fees for additional monthly transactions, and only bank wire is available for outgoing transfers, except for US residents who can use ACH or checks.

Pros

  • Lack of deposit fee
  • Wide range of account base currencies

Cons

  • Limited deposit options (no credit/debit card)

Trading Platforms

Desktop Trading Platform

IBKR's desktop platform, TWS (Trader Workstation), offers advanced features such as delta hedge orders, options orders, and chart creation for synthetic securities, making it complex but highly customizable for advanced traders. However, it may be challenging for beginners, and some languages are not available. Users can set price alerts, receive notifications, and access detailed reports.

Web Trading Platform

Investors have a choice between two platforms: the Client Portal and WebTrader. IBKR Lite customers can use the more user-friendly Client Portal, available in multiple languages. While the Client Portal is intuitive, occasional technical glitches occur. Two-factor authorization is possible with IBKR Mobile Authentication (IB Key), but the search function can be confusing for similar company names.

Mobile Trading Platform

Interactive Brokers offers three mobile trading platforms for iOS and Android:

IBKR GlobalTrader: User-friendly but lacks some features.
IBKR Mobile: Comprehensive but complex.
IMPACT: Designed for ESG investing.
The IBKR GlobalTrader app is user-friendly with a two-step login, good search functions, and access to various assets, but lacks alerts and notifications.

Offering

Interactibve Brokers in Numbers:

0
Exchanges
0
ETFs
0
Currency pairs

Stocks & ETFs

Interactive Brokers offers access to numerous stock markets, including major exchanges like Nasdaq, NYSE, and LSE. They also provide trading options for a variety of ETFs and the ability to buy and sell fractional shares, primarily for US and European stocks.

Forex

IBKR offers 105 forex pairs, below the average for stock brokers.

Funds

A total of 550 fund providers, including names like Vanguard and BlackRock.

Bonds

A substantial amount of government and corporate bonds are available, including municipal bonds. The over 1 million bonds give IBKR a significant edge over its competitors.

Options

Investors can choose from 34 Options markets. The wide range includes big markets like the Chicago Board Options Exchange (CBOE) or smaller ones like the Mexican Derivatives Exchange (MEXDER).

Futures

Similar to the options markets, investors can choose from 32 Futures markets, which is more than what others offer.

CFDs

US-based clients are not eligible to trade CFDs due to their complex nature and high risk of losing money. For this reason, IB's range of CFDs is average and mainly includes stock and stock index CFDs.

Cryptos

At IBKR, you can trade cryptocurrencies on various exchanges including NYSE and CME Group, and custody popular cryptos like Bitcoin, Ethereum, Litecoin, and Bitcoin Cash through a partnership with Paxos.

Asset Management

IBKR's in-house asset management service allows investors to copy professional portfolio managers and automatically make trades as professionals do.

Tools

Recommendations

Opt-in for free notifications on stock recommendations, dividends, and more. Receive daily ETF trading ideas from Trading Central. Third-party research options available via the Client Portal.

Fundamental Data

A broad selection of fundamental data, including income statements for the past six years, a dividend calendar, and peer group companies, is available on all platforms.

Charting

IBKR's charting features are quite extensive, with 127 technical indicators. Similar to the platforms; however, the charting tool could be more user-friendly. Other special technical tools include stock/ETF benchmarkers, Mutual fund ETF replicators, Volatility lab, Option probability lab, and VaR, Sharpe.

News Feed

Interactive Brokers has an in-house news domain, 'Traders Insight,' that provides access to Daily News and Summaries and shortcuts to earnings and multiple economic calendars.

Mutual Fund Search Tool

IBKR launched the Mutual Fund Search Tool on its website in June 2020, enabling clients to browse and select international mutual funds by country, fund family, and information about extra commissions.

Investors' Marketplace

This networking tool helps investors, brokers, and hedge fund account holders connect on education, career development, advisory, administration, and technology.

Tax Optimizer & Shortable Instruments

The Tax Optimizer tool is available for US residents, which lets clients choose their best tax method for trading based on IRS reporting rules. The feature covers the maximization or minimization of long-term gains and losses. The Shortable Instruments (SLB) Search Tool covers the available shortable securities within the web platform, and the borrowing volume offered for these securities.

Regulation

Interactive Brokers is regulated by multiple to-tier financial authorities, including the US Securities and Exchanges Commission (SEC) and the UK Financial Conduct Authority (FCA).

The international broker operates through multiple entities, providing investors with negative balance protection.

Note that the investor protection amount and the regulating authority differ from entity to entity.

Additionally, negative balance protection for forex spot and CFD trading is only available for retail clients from the European Union, whereas professional and non-EU clients are not protected.

 

Bottom Line

Regulated by several top-tier global regulators, Interactive Brokers is one of the largest US-based lowest spread brokers.

For those seeking excellent all-around service and low fees, Interactive Brokers is highly recommended. The broker has a broad selection of all asset types across the globe, while its trading platforms offer great functionality and advanced research tools.

However, the size and complexity of IBKR’s services lag behind newer rivals. The account opening process is long and tedious, and platforms might be too advanced for beginner traders.

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