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
- ***1000 in EUR or USD for the stocks transaction
- *** Price per contract for Options & Futures
Account
Interactive Brokers offers a fully digital account opening process with a low minimum deposit, but it can be complex and verification takes time. They have a global presence, allowing account openings in most countries, except those with unstable political or economic conditions. Account options are divided into individual and institutional categories.
Interactive Brokers offers many account types, which differ in terms of ownership and the service provided.
Individuals
Individuals
Account is owned and used by a single individual
Joint
Joint
Account is owned and used by two individuals
Trust
Trust
Account is held by a Trustee (separate legal entity) for your benefit
Click on the card to see details
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01Submit personal information
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02Answer trading experience questions
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03Upload identity and residency docs
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04Provide regulatory information
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05Accept general disclosures
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06Wait for application status
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
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.
