Interactive Brokers Review
Interactive Brokers, founded in 1978 and headquartered in Greenwich, Connecticut is a highly regulated discount broker that provides traders access to 135 markets. Mainly catered for and benefitted by advanced traders, Interactive Brokers has recently opened a second account type, the Lite pricing plan, to attract less experienced brokers. They also have great educational resources to help traders learn about trading.
|Nationalities||USA Clients allowed|
|Account Funding||$0 for a cash account|
|Is a corporate Account Possible?||YES|
|Sign Up process||Medium|
|Funding options||Wire, IBKR Mobile Check Deposit, Direct Deposit, Canadian EFT|
|Forex: Spot Trading|
|CFDs (only for UK)||105|
|Commodities||Only Bitcoin futures|
Regulation and Trust
Interactive Brokers is regulated by several authorities including, the Financial Conduct Authority (FCA), Financial Industry Regulatory Authority (FINRA) in the USA, Investment Industry Regulatory Organization of Canada (IIROC), Australian Securities and Investments Commission (ASIC), Securities and Exchange Board of India (BSE), Financial Services Agency (FSA) in Japan and Hong Kong Securities and Futures Commission.
Commissions & Fees
Interactive Brokers offer two pricing plans: fixed and tiered rates. When trading stocks on fixed-rate pricing, you only pay $0.005 per share with a minimum of $1 per order and a maximum of 1% of the trade value. In the tiered pricing structure, this rate drops to $0.0005 per share (for more than 100 million shares per month) with a minimum of $0.35 per order and a maximum of 1% of the trade value. Less than 300,000 shares traded incurs a fee of $0.0035 per share. On the Lite account, you can trade commission free in US listed stocks and ETFs.
Other fees to take note of include an inactivity fee of $10 per month for Pro clients with less than $100,000 in their accounts, offset with any commission generated. An overnight fee may also be charged on traders using the tiered commission structure.
As of April 2020, Interactive Brokers has 806 000 client accounts which is a 28% increase from the previous year. They have over 1400 employees across the globe with offices in Australia, Japan, India, Hungary, Hong Kong and the USA to name a few. They are present on various social media platforms including Facebook, LinkedIn, Twitter and YouTube. They have a following of over 144 thousand people on Facebook, over 224 thousand people on Twitter and 34.4 thousand subscribers on YouTube.
The sign up process can take up to a few days depending on how correctly all information and forms have been submitted. When you do open an account, a deposit must be made within 90 days otherwise your account will be closed.
Their desktop platform, Traders Workstation (TWS), is fully customizable but can be difficult to navigate if you are a new trader. However, it has all the tools, research and news for experienced traders. Their mobile app is perfect for traders on-the-go and uses a two-step login, allowing biometric authentication for ease of use. In terms of their web trading platform, Interactive Brokers offers their Client Portal which is suitable for new clients as it is easy to navigate. They also offer their WebTrader which is similar to their desktop platform. If you opt for the Lite account, you will only have access to the Client Portal.
Functionality and Tools
Interactive Brokers offer a range of trading tools and educational resources. The Client Portal and app hosts many sophisticated tools but if you’re looking for more than that, Workstation takes it even further. Market scanners are available to traders to spot trends and patterns and back-testing is also available. Fundamentals Explorer, a tool available on Mobile and the Client Portal provides traders with information on over 30 thousand companies with over 300 data points available per company. Their mobile app offers traders access to over 70 indicators.
A free trial account is available to traders and includes access to all their platforms, market data for all products and access to all trading tools. Once you are ready to transition to a live account, the process is relatively simple.
Interactive Brokers offer a wide range of products to trade on. You can trade stocks in over 135 markets, 23 currencies worldwide, over 38,000 corporate bonds, 850,000 municipal securities and 33,000 CDs.
There are two web trading platforms to choose from: their Client Portal and their Webtrader. There are many order types available on the Client Portal, however their Webtrader is better suited for more advanced orders. Their desktop trading platform, Trader Workstation (TWS), is far more advanced and is available to PRO accounts. A mobile trading app is also available to all traders for both iOS and Android. Their Android App has been downloaded more than 500 thousand times and received a 3.4 star rating.
Interactive Brokers provides three ways in which you can get in contact with them. You can either call them on their 24 hour weekday customer service line; use the IBot FAQ or make use of the Live chat option. Whilst they have great customer support, in order to make use of the Live Chat option, a valid email address is required.
If you are an experienced active trader, you will love Interactive Brokers. Their platform is kitted out with all the charts and tools you could need and is highly customizable. However, if you are a less experienced trader you may find it difficult to navigate around the platform and you will face penalties if you do not meet the minimum commission requirements each month.
66% of retail investor accounts lose money when trading CFDs with Interactive Brokers (UK).