Interactive Brokers Review

Deeply understand why savvy traders choose Interactive Brokers. Read through this Interactive Brokers review to explore their user experiences and pricing to unveil the platform’s global market access:

Interactive Brokers provide a brokerage platform on which clients, both individuals and institutions and fund managers, can trade stocks, options, futures, currencies, cryptocurrency, gold, bonds, and funds leveraging pro trading platforms, in-house expert support, extra order types, automated risk management strategies, and third-party extensions.

Interactive Brokers have obtained licenses to provide direct trade execution and clearing services in 150 markets across 34 countries worldwide. It is also licensed and used heavily as an investment platform.

Interactive Brokers: How Fair & Safe Is It?

This Interactive Brokers review provides an in-depth view of the company’s trading platform’s strengths, weaknesses, who it is best for, and how clients can make the most of the platform.

=> Visit Interactive Brokers Website

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Interactive Brokers is one of the professional trading broker/dealer firms with the longest trading history having been founded in 1978 in New York, United States by Thomas Peterffy, who was an innovator in computer-assisted trading. The company is headquartered in Greenwich, Connecticut but has a physical presence in many countries.

Based on the review by SoftwareTestingHelp.com, the company has a wide range of products/assets to trade (now in millions), services, and account types adequate for every type of client you could imagine of – whether you are talking of individual, group, institutional, proprietary trading group, introducing broker, money manager trading accounts, or other.

It’s no surprise considering the company’s long history and considerable experience in the industry. Most brokers out there can’t compare to IBKR’s unmatched range of trading support.

If you want to trade U.S. company stocks and ETFs, IBKR should be your broker, because there are no fees charged for trading these assets. Besides, trading fees are mostly below the industry average on popular assets such as stocks and FX.

IBKR provides extensive in-house or proprietary trading and markets analytics tools more than any other trading broker we have reviewed so far.

IBKR integrates the most famous third-party trading platforms such as MT5 but through the APIs which support 50+ platforms for diverse functionalities such as copy trading, signal provision, and sourcing, reporting, and trade analytics: One of the drawback is that you are charged on withdrawals which could be free from other broker platform but there are no account inactivity fees.

Interactive Brokers is Best for

IBKR is best for trading US stocks and ETFs because US residents do so on that platform without any trading costs. There are many other cases where IBKR is comparatively better than other online trading brokers.

For instance, it offers some of the best account types for institutional, proprietary trading groups, introducing brokers, money manager traders, and investors because we know these would struggle to find a platform to trade with. The company offers some of the best trader support services in the market, plus in-house and third-party trading research and market data access.

Interactive Brokers Products and Services

Tradable Assets at Interactive Brokers

#1) Stocks

Trading of 37,539 stocks from across the world: Clients can trade U.S. stocks (stocks of companies based in the United States) for free meaning without commissions and no extra spreads, additional charges or minimum amount limits.

Trade stocks on popular exchanges (like NYSE, NASDAQ, IBIS, LSE, TSE, FWB, ENEXT, MEXI, SBF, SWB, etc) against popular global currencies like USD, EUR, CHF, CAD, AUD, MXN, and SEK.

The IBKR Lite account type charges zero commission on U.S. stocks, with no account minimums or inactivity fees. On the other hand, IBKR Pro charges between $0.0005 and $0.0035 per share on stocks. IB SmartRouting ensures the discovery of the best price execution across liquidity providers.

Traders can invest and trade in fractional shares (at the minimum order value of $0.01 per share). Maximum per order is 1% of trade value.

Recommended Reading => Best Books for Stock Trading

#2) ETFs and ETPs trading

Trade ETFs and ETPs on 150+ exchanges and get reimbursement for commissions held for 30 or more days. Bitcoin ETPs (including spot BTC ETPs) and Options ETFs are also available. Implement core allocation with fixed income, diversify portfolio, short-selling, and other strategies.

Trade ETFs 5 days a week, although there are overnight trading hours for U.S. ETFs with free overnight data. With US options trading permissions, traders can trade CBOE Equity Index Options and CME Equity Index Options on Futures.

#3) Options

IBKR supports trading of 74,455 options against the USD on exchanges like CBOE, NASDAQOM, CME, MIAX, BOX, MERCURY, PSE, EDGX, AMEX, MEMX, ISE, and PHLX among others. Access over 30 global markets with four levels of options trading.

#4) Commodity on futures – Futures/FOPs

IBKR supports the trading of futures for agriculture, crypto, energy, equity indices, fixed income, interest rates, metals, softs, and volatility indices. Trade them for USD, EUR, GBP, CAD, CHF, HKD, AUD, SEK, SGD, JPY, and CNH.

#5) Forex

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IBKR supports the trading of 100+ FX currencies from 17 exchanges around the globe and against 24 national currencies. According to a SoftwareTestingHelp review, it was ranked as one of the top FX trading platforms for trading fees and minimum deposit.

#6) Mutual funds

IBKR supports trading of 43,000+ mutual funds with 18,000+ funds traded for free without trading fees. Clients can trade them at zero custody fees. The marketplace has funds from Allianz, American Funds, BlackRock, Fidelity, Franklin Templeton, Invesco, MFS, PIMCO, Vanguard, and others.

#7) Hedge funds trading

While trading, traders can review yearly performance data, directly contact or get contacted directly by hedge funds, and run a client portal on the IBKR website. Invest a minimum of $25,000 in some funds.

#8) Cryptocurrencies

Paxos provides trade execution.

Other services provided by IBKR

• Margin lending.
• Interest paid to customers on their cash – up to 4.83% on instantly available cash.
• Interest income is paid to traders on their lend-able shares.

Types of Accounts One Can Open at Interactive Brokers

#1) IBKR Lite

These types of accounts allow traders to trade U.S. stocks and ETFs without any commissions. There are no account minimums and inactivity fees. Traders can earn interest on their instantly available balances, earn interest by lending their fully paid stocks, and borrow trading money.

IBKR Lite offers fixed pricing on other stocks and EFTs (apart from US-based, which are free), options, mutual bonds, and futures. Tiered pricing is availed of currencies and bonds.

Where fixed pricing is available, there is no option to choose tiered pricing, and vice versa. Pricing is generally lower for all commodity types compared to IBKR Pro accounts.

It is most favorite for beginner and low-volume traders. IBKR recommends all retail traders, including approved brokers and U.S.-based financial advisors who trade on behalf of their clients (with some limitations), to apply for this account type.

Further Reading => Top Fintech Consulting Companies

Besides, it is most suitable for those trading U.S. stocks and ETFs, as they pay no trading fees. Margin loan interests are higher on these types, starting at a benchmark of 2.5%.

#2) IBKR Pro

With this type of account, IBKR charges a tiered (volume-based) trading commission or on a fixed commission basis. While customers can choose either fixed or tiered options for each of the asset classes, currencies and bonds only have tiered commission pricing without the fixed commission option.

This account type packs IB SmartRouting, which routes orders to quotes with the best available prices.

Pro is most favorite for pro traders, active traders, prop trading groups, money managers, and institutional traders. This is the best plan if you want to trade non-U.S. stocks, options, futures, and mutual funds since there is an option to limit the trading fees by choosing a fixed rate.

Clients are allowed to switch between these types of accounts at any time.

Here is a video for your reference:

#3) Types of Accounts Categorized as per Owners

1. Individual account: Owned and run by one trader.
2. Joint account: Owned by more than one trader.
3. IRA or Individual Retirement Accounts are available for US residents and US citizens living anywhere in the world. Types include Traditional, Traditional Rollover, Traditional Inherited, Roth, Roth Inherited, Simplified Employee Pensions (SEP), and Savings Investment Match Plan for Employees IRA (Simple IRA). They are either margin (ones that can invest and trade multiple currencies) or cash accounts. It has multiple limitations, such as no cash and currency borrowing.
4. Trust accounts Non-professional advisors: Use a master account to manage, trade, and report on multiple accounts for clients. Collect fees and do trade allocations. The account can be operated by those registered or allowed under the SEC or other jurisdictions to trade on behalf of other clients. The account can be upgraded to a RIA.
5. RIAs or Registered Investment Advisor accounts can be opened for other people.
6. UGMA/UTMA account for minors.
7. Registered Investment Advisors: Custody and trading solutions for advisors who trade for their clients. Pay no ticket charges, no custodial fees, no minimums, and no platform or technology fees. IBKR provides tax tools, CRMs, and portfolio management, which advisors can leverage for clients.
8. Proprietary trading groups: The owner can authorize multiple traders to enter orders from a single account. The owner can have clients open sub-accounts.
9. Hedge funds account: Hedge funds can operate trading, clearing, custody, and reporting for their clients. Accounts have margin financing, securities financing, outsourced trading, and other capabilities.
10. Introducing broker accounts: Owners can offer trading, marketing, and customer service to their clients. The owner can trade or operate master accounts for clients.
11. Other types of corporate accounts supported include family office accounts, compliance officer accounts, small business accounts, Employee plan administrators simple IRAs, money managers, funds administrators, educators’ accounts, and hedge fund allocators.

Trading Platforms You can Trade with at IBKR

#1) IBKR proprietary platforms

The choice of platform depends mainly on the device you want to use, but each is targeted at either beginner, intermediate, or advanced trader levels going by what features they have. IBKR stresses that these are designed specifically for different types of clients.

They include the IBKR GlobalTrader for mobile, Client Portal for web, IBKR Desktop, IBKR Mobile, IBKR Trader Workstation (TWS) for desktop, and IBKR APIs for desktop.

Feature-wise, the IBKR Trader Workstation (desktop), followed by IBKR Desktop, and IBKR Mobile, supports most assets for trading and investment, most trading tools, most analytics, most portfolio management features, supports most of the languages, provides access to most of the research and data (in-house and third-party), and most of the tools for trading options.

We mean a trader should access most of the platform offerings by choosing the TWS, followed by two others.

IBKR Workstation (TWS) is most favorite and feature-rich for intermediate and advanced traders including institutional traders (prop trading groups, hedge fund groups, money managers, brokers, etc.), as is the IBKR Mobile.

Desktop is a favorite for beginner to intermediate levels, as is GlobalTrader and Impact. Client Portal (web) is a favorite for all trader levels. APIs are most preferred for advanced trader levels, while ForecastTrader is best for beginners.

IBKR ForecastTrader (web) is used to trade stocks/ETFs, options, and mutual funds only. Impact (mobile): is used to trade stocks/ETFs, options, and mutual funds only. Some trading tools are not available even for trading these assets.

#2) Major trading tools/features on the platforms

In addition to the ordinary trade execution and advanced market analytics tools, there are block trading desks, tools for advanced algos customization and trading, smart routing tools (the so-called IB SmartRouting), bracket order types, shorting securities, BookTrader tool, order allocation tools, Split the Spread tool, FXTrader, ComboTrader, SpreadTrader, and mobile order placement and monitoring.

#3) Advanced analytics tools

These include market scanners, market data (live, delayed, historical, and Level II), third-party news research tools, advanced charts and chart indicators, advanced fixed-income scanners, and technical analysis tools.

#4) Portfolio management tools

There are tools to model portfolios, rebalance portfolios, for risk management, a mutual fund replicator tool, and a stock/ETF ‘benchmarker’.

#5) Other capabilities on the IBKR trading platforms

IBKR platform’s capabilities, especially on TWS, include tools for screening of markets, e.g. the MultiSort (a trader can use it to find stocks from among 70,000 that suit their trading strategies); as well as multiple work order types (bracket, stop limit, profit taker, One Cancels Other, beta, FX order, and pair hedging orders).

Other capabilities include support for quick order entry from bid and ask prices; as well as third-party analyst research from Morningstar, Zacks, and other third-party providers; etc. Traders also can organize trading tools to suit their style.

There also are strategy-building tools for those who use bots for trading, multiple Options analysis tools, fundamentals explorer, and level II market data, e.g. on the desktop app. There also are inbuilt and third-party risk management tools like IBKR Risk Navigator, Hedgeyer Risk Management, etc.

The mobile app supports Mobile Check deposits, a mobile authenticator two-factor authentication key, and works on Android and iOS.

#6) IBKR API

Traders can use the API (Web API, TWS API, EXCEL, and FIX APIs) to integrate third-party tools such as reporting tools, trade analytics and charting tools such as TradingView, signal tools such as eSignal, automated trading tools, normal trade execution tools; and copy trading platforms such as MetaTrader 5, ATAS, NinjaTrader 8, etc.

We found it integrates 50+ tools and platforms minus third-party brokers and account reporting service providers.

Capitalise.ai is integrated into IBKR platforms, and customers can use it to automate trading execution and also market analysis using simple to complex automated systems. It can monitor real-market data, technical indicators, and macroeconomic data 24/7 for the trader.

Traders can simulate, back-test, and run as many trading strategies as they want using Capitalise.ai.

Refer to this video:

How to Trade with Interactive Brokers

Step #1: Visit the website. Click/tap Open Account and fill in the details. Choose the type of account and click/tap ‘Start an Application’. The website offers more than enough guides on what types of accounts one can consider, their benefits, how each works, and details of what you need for specific types of accounts.

An email will be sent to you with a link to verify the email.

Fill in the required personal and account details to continue the application.

Step #2: Choose the financial instruments you want to trade. Trading some might need you to verify that you have experience in trading them.

Submit all the documents required. If they are unavailable at the time of opening the account for the first time, you can always save the application and come back later.

You might need various things such as bank account, SSN or US Tax ID, employer details, third-party broker account numbers for funding, trustee certification form, business details such as licensing numbers and articles of incorporation and laws, proof of address, etc. depending on the account type and location.

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The account goes to the verification stage, and the team can request for more documentation.

Step #3: Deposit: Funding the account is done by using the Fund Your Account option on the account dashboard when the account is approved. Select Deposit Funds, input your geographical location, currency, and funding method, amount, and proceed.

Deposits and Withdrawals

IBKR offers a variety of methods for depositing and withdrawing money depending mainly on your location and type of account.

Depositing methods include bank ACH, bank wire, Wise, online bank bill payment, and Check.

Withdrawing money from the account: It can be done in a variety of ways including ACH, Bank Wire, Check, Direct Debit, Transfer to Wise Balance, Canadian Electronic Funds Transfer (EFT), ACATS, or ATON.

To withdraw, log in to your account, navigate to the Funds section, select Withdraw Funds, choose withdrawal method, provide the necessary details then proceed to withdraw. Checks take 5-10 days while other methods take 1-3 days.

Transferring funds/positions: You could use ACATS (Automated Customer Account Transfer Service), DRS (Direct Registration System) system, DWAC (Deposit Withdrawal at Custodian), Free of Payment (FOP) Transfer of US Securities.

Methods for rolling over accounts (IRA) include Direct Rollover Notification, and Trustee to Trustee Notification.

General Features for Traders

#1) IBKR Campus

There are expert online guides, podcasts, webinars, regular videos, demo and trading lab (e.g. educator) accounts, market commentaries, online tutorials, and API documentation. Learn about trading, how financial markets work, brokers’ trading tools, and get related news.

Receive trading insights. There are online courses for all types of investors and traders regardless of the type of asset you want to trade, trading strategies of interest, and type of account of interest.

#2) Market Scanning and Sentiment Tools

You will find market scanning tools, social sentiment analysis tools (e.g. Social Market Analytics), portfolio analysis tools, advanced trade, and charting and technical analysis tools.

#3) Investor Marketplaces

Traders can find and advertise investment services, find and advertise research providers on the Research Marketplace; find and advertise services such as audit, compliance, legal, or administrative services on the Administrators Marketplace; and find and market your advisory, brokerage, or wealth management services on the Advisory & Broker Marketplace. Search and advertise software vendor services on the Technology Marketplace,

#4) Paid and free market data

The platform has a host of paid and free market data, research data, events data, news, alternative data, analytics data, and third-party analytical tools.

#5) Money management features

Traders can save money to earn interest and borrow against their collaterals at defined margin rates. Access to automatic deposits from a bank account to an IBKR account ($) and IBKR mobile check deposit is available. There also is an Insured Bank Deposit Sweep Program for eligible IBKR clients. Up to $2.5 million of FDIC insurance in addition to existing $2.5 million SIPC coverage for a total coverage of $2.75 million.

#6) Leverage trading

The platform offers mostly up to 25% margin requirement, meaning leverage of 4x as allowed by the regulations. It means the leverage allowable depends on location. There also are leverages of 1:20, up to 1:30 for U.K. traders, up to 1:400 for major forex pairs, and up to 1:100 for gold commodities.

IBKR’s margin loan financing rates (margin rates) are between (USD currency) 5.83% to 6.83% for IBKR Pro and 7.830% for IBKR Lite depending on the tier. These values include the benchmark rates.

#7) Free trial

Clients can try all the features using IBKR Desktop, TWS, and IBKR Mobile. Also includes delayed market data for OTC spot FX and OTC spot Metals, research news, advanced trading tools, and order types.

IBKR Pros and Cons

Pros:

• Above average advanced trading platforms and tools, built with trader’s types and levels in mind.
• Extra and diverse investment products and services for diversified traders.
• Millions of financial instruments to trade.
• Portfolio and money management tools.
• Low trading fees with free trading for U.S. stocks and ETFs under the IBKR Lite accounts.
• Extensive support for third-party trading platforms and brokers.

Cons:

• Withdrawals are charged a fee per each depending on the method when there are brokers have free withdrawals.

Trading Fees/Pricing of Other Products & Services at IBKR

Stocks: IBK Pro (tiered pricing): $0.0005 to $0.0035 depending on one’s volume tier. IBKR Pro fixed is $0.0005 and Lite is $0. Other fees include regulatory fees, exchange (fees charged by NSE and other exchanges), clearing ($0.00020 per share), and pass-through fees ($0.000175 for AMEX and 0.00056 for FINRA).

APACC and EMEA fees vary depending on the country.

Options: $0.15 to $0.65 per US option depending on volume tier. $1 minimum per order. Additional fees include exchange fees, clearing ($0.02 per contract for between 1-2750 contracts and $55/trade for above 2,750 contracts), regulatory (0.02685 per contract), and transaction fees. (SEC – $0.0000278, FINRA – $0.00279). NANOs on CBOE cost $0.065/contract. Fees for EMEA and APAC ETFs and ETPs differ based on region.

Futures: USD 0.25 to USD 0.85 per contract for USD-denominated futures (fixed is $0.85 per contract). Extra fees include exchange, regulatory, and overnight fees. $0.10 to $0.25 per contract for E-micro futures and futures options.

The cost is $0.08 per contract for Small Exchange Futures, $0.05 to $0.15 per contract for E-micro FX Futures, $0.15 to $0.50 per contract for E-mini FX futures, and $0.10 to $5 per contract for CME crypto futures and futures options.

Forex: 0.08 to $0.20 basis points * Trade Value depending on the monthly trading volume tier of the trader.

Bonds marketplace: Trade over 1 million bonds including U.S. government securities (treasury bills and treasury bonds), 3,816 corporate bonds, 1,017,430 municipal bonds, 8,736 CDs and non-US sovereign bonds, fixed income futures, and fixed income options, five days a week, directly with IBKR clients. Use the Bond Search tool to compare yields at IBKR against yields of other brokers.

Bonds: Commission range from 0.025% to 0.1% * Face Value on U.S. Corporate and CDs, 0.0125% to 0.05% * Face Value on U.S. municipal bonds, 0.0001% to 0.002% * Face Value on U.S. treasuries (bills, notes, and bonds). Additional costs are exchange fees depending on the exchange in question, and transaction fees (FINRA – $0.00105 * quantity sold). For other countries, bonds depend on location.

Mutual funds: No transaction fee for U.S. funds. IBKR transaction fee of less than 3% * Trade Value or USD 14.95 per transaction.

Market data subscription fees at the rate of $500 or non-USD equivalents, for Individual Accounts, Financial Advisor Client Accounts, Institutional and/or Organizational Accounts, and Financial Advisors. $200 for non-professional advisor and introduction broker clients. Indian residents $100. There are commission waivers that reduce the price of data. Bundled professional data from professional data, starting at free to $155.

Withdrawal fees: $10 for bank wire, $4 for checks, and $1 for BACS/GIRO/AC. Deposits made in Mexico are charged.

Other charges where it applies: Deposits are free except the trader pays third-party fees, while the first withdrawal is free and the rest are charged depending on the method. Other charges include fees to modify or cancel orders via APIs/CTCI Directed ($0.01 for order and $0.25 per API/CTCI Directed execution).

There also (where they apply) are stock options exercise fees, trade bust/adjustment fees ($250 to $500 per burst) as incurred by exchanges and market centers with who IBKR works, returned check fees, and depository and currency conversion fees ($10).

Also included where they apply are security transfer fees, DTC position transfer fees ($10 per ISIN for Canada Nothernbound/Southbound), stock loan fees ($10), overnight position fees which are not charged for positions that are 3x margin requirements and above ($0.025 to $1), exposure fee for high-risk margin accounts, take up/trade away fees, account maintenance fees, telephone order closing positions, etc.

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Frequently Asked Questions

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Conclusion

To conclude, IBKR provides an expansive range of trading platforms and tools, most of which are developed in-house and designed with traders in mind. There is expansive support for third-party platforms. Most trading tools supported are on the TWS platform, which suits intermediate to advanced traders, including institutional traders.

Besides, the fee for trading major assets is lower than the industry average with no charges for U.S. stocks trading on the IBKR Lite. Customers can choose fixed commissions or tiered ones which are excellent for large volume and active traders. IBKR charges withdrawal fees, but there are no inactivity fees or deposit minimums.

Research Process:

Time taken for review: 3 days

Our Rating