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Interactive Brokers (IBKR) was established about 40 years ago. This company is well known for supporting international trading. This company is presenting a universal portal through which its clients can make business in over 24 countries and on more than 100 market centers.
It is an international company that makes trading as easy as it can be. It provides the best offers to suit its clients, and has many features to offer.
Commissions & Fees
Professional core clientele and providing the lowest commissions schedule is the most important thing for Interactive Brokers. Clients certainly appreciate the quality that this company has to offer.
In our personal evaluation of order execution for the 2017, the broker ended up second, just behind Fidelity. If you want to find out more, take a look at our guide to order execution. Interactive Brokers is a leader when it comes to the lowest margin rates. They vary from 1.91% down to a 1.41% – for clients who sustain more than $1 million with the brokerage.
When it comes to equity trades, rates start at $.005 per share together with the fixed-rate structure which is a $1 minimum. The tiered-rate structure starts at $.0035 per share. It can be used as an alternative way, but it is all up to the client. The client can also affect the cost – it can be reduced or increased. It depends on adding or removing a certain amount of liquidity.
If you make some calculations, you will see that when it comes to small order sizes, for example a few hundred shares, Interactive Brokers is a fantastic deal for everyone. However, when it comes to more than just a few thousand shares, it can become really expensive.
However, Interactive Brokers undoubtedly stays supreme when it comes to the commissions and fees section. Here is the option: $.70 per a contract without any minimums. Active traders will certainly like the fact that exercise and assignments are almost costless. As total shares traded increase – fees per contact tend to get lower.
Overall, new investors should be aware of the fees and minimums which are being charged by Interactive Brokers. Let’s explain it simply by giving an example: if you spend at least $30 in commissions each month, you have nothing to worry about. On the other hand, if you account is inactive, you will have to pay fees that can reach up to $20 per a single month.
Where Interactive Brokers shines
Interactive brokers have an incredible commission structure. It is very hard to be superior over the stock and exchange-traded funds that Interactive Brokers offer. This company prefers frequent and high-volume traders that are at 0.5 cent per a single share.
The great thing is that investors who have more than 300,000 share is a single month are awarder with paying 0.2 cent (or even less) per single share. Everything depends on how much you want to invest and trade.
There is also something called Options trading. It is a special offer with just 70 cents charged per single contract. There are also many discounts available per larger volumes. Interactive Brokers’ Trader Workstation is considered to be one of the best trading platforms there is. It is actually very useful for advanced traders, but also many other traders.
Interactive Brokers have the desktop platform. It is very fast and includes many standard features that exist nowadays. It offers features like watchlists, real-time monitoring, alerts, etc.
What do other tools include? They include advanced charting, stock symbol performance, volatility lab, heat sectors and many other important and useful features.
There is also something called paper trading and a mutual fund replicator. Mutual fund replicator helps the users to indentify something called ETFs. ETFs replicate the performance of the mutual fund that you select, but there is something significant about its work. They offer lower fees!
There is also a very new feature among many interesting offers and service options: Interactive Broker FYIs. Interactive Broker FYIs offers you some customized notifications. What about? Those notifications give you information about some specific events that could affect your investment and trading.
What else is there? You can read about research, some market data given and news. However, it often requires premium subscription that is almost never free.
It is not easy to understand everything at first. People who are new at this can be pretty confused and Trader Workstation will be totally unusable. But there is a solution to that problem: There is so called mobile trading application which will, together with IB WebTrader, allow easier access to new customers. IB WebTrader is slightly easier to navigate rather than other similar services.
Margin rates: what is great about rates that Interactive Brokers offers? They are very, very low. Traders love this. The maximum margin rate that you can get is the benchmark rate plus 1.5%. Based on the account balance, the broker will charge a blended rate. Also, it has a calculator that you can easily and quickly find on its website. The rest of the work is just simple math.
Investment selection: What does Interactive Brokers offer? There are plenty products that you can have access to starting from offerings of stocks, variety of options, ETFs, mutual funds, foreign trading to multiple other products that you had no idea they existed.
Interactive Brokers Account Types
Here were are talking about cash accounts that can enter only long securities positions, after that long option positions and in the end covered short option positions.
- Margin accounts: it allows buying securities on margin, also short security positions together with futures positions and naked options positions.
- Portfolio margin accounts: they provide the same positions as “normal” margin accounts above – but use a slightly different method of calculating margin requirements. Foreign accounts are not eligible for this type and the minimum account balance of $100,000 is needed for this type of Interactive Brokers account type.
Also, you should know that these margin accounts ask you to provide a credit check or ask you to answer some additional questing that are important.
Here is an advice for you: before you do any enabling of the features or any option trading, you should know that IB needs to know whether you have had some trading experience. If your answer is negative, you probably will not be able to enable these features that you have wanted. A certain amount of experience is needed for this type of service. But do not worry, you will eventually get there.
Interactive Brokers has a trading platform which is called Trader Workstation. You can call it TWS. What is TWS exactly? It is a Java based platform that will work on any computer system (of course with a modern JAVA environment such as Windows, Mac and Linux). From my personal experience, I concluded that Windows and Linux both work really well.
It is not easy to handle TWS. It is very complicated software. But do not give up instantly if you realize you have no idea how to work with it. It has some basic functions like order entry, bookkeeping and charting that we have mentioned earlier.
Of course, it would not be complicated if it had only basic functions. TWS also has a lot of other features like news feeds, algorithm support for unusual orders, trading assistants for specific types of trading…. You do not have to use these if you do not want to.
Interactive Brokers supports so many asset classes and that is why it has had to rethink its position and list management. It takes some time to get used to the solution, but it is extremely efficient and useful.
You will see a summary of securities available only if you type in any stock symbol. Watch lists can include practically anything you can think of! Many loyal clients prefer the Classic view, but I hold on to the Mosaic one.
No broker can give you an experience like TWS can. Did you know that watch lists can have up to 338 different columns? Besides learning how to build watch lists effectively, I have found only one disadvantage. That is supporting too many investment types. This all can be too much for new customers.
I only found 8 tools for mark ups. That is certainly surprising because of the depth of its functionality. The basics elements are definitely present: trendlines, notes, zooming, Fibonacci, etc. But, there are many important tools missing.
For example support and resistance lines and channels are not included. If you leave pickiness aside, the charts that are found on TWS have all the basic functionality that is required in order to succeed. That is: viewing historical trades, alerts, trading off charts, comparisons and index overlays.
If you leave out charts, TWS is also a home to many other tools which are not covered in this specific review. Those tools are: Algo trading, Options Strategy Lab, Volatility Lab, Risk Navigator, Market Scanner, Strategy Builder and Portfolio Builder.
They are all available within TWS and that lead to the conclusion that TWS was built for professional trading! As proof, you can say that there are about 63 different order types available for customers to use and that is by far the most in the whole industry of trading.
TWS platform is ranked among the best platforms in the whole industry of trading. We jumped to that conclusion after assessing TWS and considering over 58 individual variables. Although some tools that TWS has are a bit less successful than other top-listed platforms, such as charting, TWS platform definitely wins when it comes to ranking in general.
IB WebTrader is definitely a good solution for those clients who travel without an access to their desktops. It is also a good solution for those who want to monitor their portfolio or to monitor watchlists. They can also place trades along.
After I have loaded WebTrader, I have found a detailed summary of my portfolio and margin requirements. This was found along a full spectrum order ticket. What does this mean? It means, when I say full spectrum, that trading is supported for all asset classes.
What will pulling quotes provide? It will provide only a basic high-level summary. That is is an extremely rudimentary chart and I truly recommend you to avoid it. Together with a high-level international market summary tab, basic stock screening is also there.
At the end, what is the main focus of the WebTrader? Its main focus is to monitor portfolios and manage specific orders. It is very successful when it comes to accomplishing these orders.
You might think that TWS looks old and neglected because its appearance hasn’t changed in the past decade, but it is very usable among many customers and traders. I guess looks isn’t everything.
If you are worried about your security when it comes to Interactive Brokers, you should not worry. The security features are built into the TWS. Account login requires a credit card sized card that has a lot of numbers. This is sent to your house and it must be used every time you want to log in. If you want to, the connections are encrypted with standard SSL encryption.
You might think that the physical token is very annoying, but it is very good to keep hackers away from your account if they somehow find out what your password is. Are you worried about money transfer? There are some restrictions that should prevent anyone from transferring money from your account without your consent.
Many people cannot start their day without using their mobile phone. That is why mobile trading with Interactive Brokers is an enjoyable and easy experience. All devices are supported. This includes iPhone, as well as iPads, Apple Watch, other Android watches, Android smartphones and Android tablets of course.
Mobile trading is very important nowadays because it is the easiest way to reach the customers. Only thing that customers need to do is glide and slide with their fingers down the screen. It is affordable and simple. You can access your account anywhere and anytime via mobile applications. It is a great deal for those who cannot access their accounts otherwise in certain moments.
Many things are very complicated when you talk about trading. There are many issues present. You think about how quickly your trades execute or how much things cost. You can easily get lost in the calculations and generally when you start dealing with it.
When it comes to my personal experience, International Brokers was a great option for me. They offer good executions for many things and they are generally better than other brokerages.
But it is important to say that they are generally not really that good when it comes to execution of one or a few number of exchanges. The other firms tend to be much better. However, International Brokers is very good considering the huge amount of exchanges they operate on daily.
Third Party Connectivity
You probably know that TWS has a lot of great functions, but it is actually not the best available software there is. Many applications require other software. When it comes to my bread-and-butter futures trading, I surely recommend a so called NinjaTrader. It has many features that I find necessary and I am very satisfied by its service. This is a third party package.
It connects to the Interactive Brokers via API. API is an abbreviation for application programming interface. Maybe “API” is a bit easier to remember. Other than connection third parties to Interactive Brokers, API can also allow you to program some automated strategies absolutely on your own. Those automated strategies take place in conjunction with one more software TWS.
Of course, before you do such a drastic step, you need to be sure than you know exactly what you need to do. Other than NinjaTrader, there are many more third party packages and software that you can use. All you need to do is explore a bit more about them and find out what suits your plans best. Find out what works for you and do as you like.
Many users will be very confused on this topic. Sometimes it is just hard to understand how some things work. Most people will not understand the difference between any of the services listed and mentioned. But, in the end, everything will work just right. You need to put some effort in order to figure out how some things work and then your success begins. In general, you are able to make everything turn out fine.
When it comes to charts, they have 68 optional studies. It sounds great, but the bad thing is that charts are not flexible at all. For example, you are able to make some settings on your own. If you adjust the settings so you can view daily charts from the past year – that is the only way to see charts unless you adjust the settings again.When you do so, you can have other views.
What are the flaws in charting? Here are talking about lack of stock and index comparisons, you are not able to customize home screen, there is no live streaming on TV. The only thing that you are able to set is setting basic alerts – but without notification support.
Overall, Interactive Brokers is an amazing choice for investors who fit into criteria required. There are more than 50 types of ordering, more than 100 global markets which represent a great variety of choice. This company supports any invest that you can imagine in your head and nothing is impossible when it comes to investing.
All you need to do is to have a clear picture in your mind – what is that you really want to invest in. After reading this, you probably have a sharper picture about the things you were interested in. I hope that this review has helped you to get rid of your doubts. I wish you good luck!
Is this your final decision?
We suggest you visit one of the popular Forex Brokers instead!
- Manager has got an access to the global market together with the financial contribution
- Low level of trade contracts
- Endless source of ways to order for qualified professionals
- Deposit required to open an account
- Owners of the inactive accounts are required to pay the fees
invest Binary review: Interactive Broker: 4,5 stars