Interactive Brokers Review

For many years, Interactive Brokers has led the way in online trading. They have top-notch trading technology that helped them become one of the best online brokers and the best for day traders. The main platform, IBKR Pro, might be a bit tricky for beginners. But, they also offer easier options on mobile and the web. We reviewed Interactive Brokers thoroughly to see why it’s a great choice. Let’s find out what makes it stand out.

What is Interactive Brokers?

Interactive Brokers is one of the biggest trading brokers in the world. It has the advanced trading technology developed by the company itself. They are ranked as the number one choice for professional traders who want to trade real futures, stocks, ETFs, options, forex, and more.

The company started in 1977 when Chairman Thomas Peterffy bought a seat on the American Stock Exchange (AMEX) and began trading as an individual market maker in equity options. Since then, Interactive Brokers has grown significantly. They now operate in over 120 market destinations around the world. They are known for their commitment to developing trading technology.

Pros and Cons

Is Interactive Brokers Regulated?

Yes, Interactive Brokers is regulated by various international commissions, such as SEC, FINRA, NYSE, FCA, ASIC, IIROC, and others. The group of companies under Interactive Brokers operates multiple trademarks, all regulated by Interactive Brokers LLC. These licenses ensure that brokers operate in full compliance with regulatory standards and rules that protect traders and the trading industry.

To obtain a license, brokers must meet all requirements set by regulatory authorities. Otherwise, the license may be denied or revoked. Also, clients’ funds are protected by using segregated accounts.

Is Interactive Brokers Safe or Scam?

No, Interactive Brokers is not a scam. In fact, it is heavily regulated by international regulatory bodies around the world because it operates globally and aims to provide a safe trading environment.

Account Types

Interactive Brokers has two types of accounts.

The first type is the cash account. With this account, you trade using the money you have in it. Many people find this account type suitable.

The other type is the margin account. With this account, you can trade on margin, meaning you can buy stocks even if you don’t have enough money. Interactive Brokers lends you money for trading, and you pay interest on the loaned money.

If you’re considering a Margin account, first read Interactive Brokers’ page on Margin accounts. Be aware of the risks involved in trading on margin. For most people, a Cash account is the better option. If you’re unfamiliar with margin accounts, it’s best to avoid them. Trading on margin without understanding it can result in significant losses. However, if you understand how it works and want to use leverage, you can choose a Margin account.

Interactive Brokers Fees

Interactive Brokers charges competitive fees for trading. This is because many of its clients are professional traders and big institutions, so they need low fees.

For all products, like stocks, options, forex, etc., you’ll pay a low commission of $0.005 per share, with a minimum of $1.00.

If you’re in Europe, you have the choice of a fixed commission of 3 EUR/GBP for trades under 6,000 EUR/GBP. For trades above that, it’s 0.005% of the trade value.

For stocks, IBKR’s fees depend on how much you trade. You might pay per share or as a percentage of the trade value, with certain minimum and maximum limits. ETF fees are similar to stock fees.

On the downside, if you’re a high-risk margin client, IBKR might charge you an exposure fee. This is to cover the costs of managing your account. The amount depends on your situation and how active your account is.

IBKR also pays you interest on the cash you keep in your account. If you have at least $10,000, you could get up to 4.83% interest on USD balances. The more money you have, the more interest you’ll earn, up to $100,000.

Good news for casual traders: there’s no monthly inactivity fee.

Deposits and Withdrawals

When you deposit or withdraw from your account, you can only do it through bank transfers and Wise Balances. You can’t use bank cards or popular electronic wallets like PayPal or Skrill. Also, your bank might charge a fee for transferring money. If you’re in the US, you have a few more options. You can use ACH (Automated Clearing House), checks, online bill payment, direct rollover (only for IRA accounts), trustee-to-trustee (only for IRA accounts), and debit card deposits with the IBKR debit card that comes with Integrated Investment Management accounts.

When it comes to withdrawal, there are limits on how much you can withdraw. It usually takes about two business days, and you can withdraw a maximum of $50,000 per day and $100,000 in total within five business days. The first withdrawal you make each month doesn’t cost anything, but after that, you might have to pay a fee. Currently, this fee is around $10, depending on where you live. If you choose to receive a check in USD, there’s a $4 fee.

If you want to receive money in a currency other than your usual currency, you’ll have to pay a conversion rate fee. This rate matches the rates used for forex trading. To save on these fees, you can choose from 27 different base currencies. However, the options available to you depend on the legal entity you’re working with.

Trading Platforms

Interactive Brokers created its own trading software and technology called IBKR Trading Platform. It’s highly ranked and considered one of the best, especially by Professional Traders, because of its powerful capabilities. The IB Platforms offer various software that works on different devices. Our research shows that they cover a wide range of needs. Overall, Interactive Brokers’ technology is top-notch, providing powerful capabilities and flexibility.

Each platform supports different trading products and offers advanced analysis tools. These tools are exclusively available through Interactive Brokers.

Desktop Platform

The Desktop TWS is a highly awarded platform. It’s the flagship platform for active traders who handle high volumes and multiple products. TWS is powerful and flexible, offering advanced algorithms and tools.

Web Platform

You can also use IB WebTrader, a web-based trading interface with functions similar to the desktop version. It gives access to over 120 worldwide markets from a single account and performs well regardless of connectivity.

Interactive Brokers App

The IBKR Mobile app allows easy trading on your mobile device, whether it’s Android or iOS. The platform is similar to the desktop version, offering advanced quotes, research tools, and full account management capabilities.

Research and Education

Interactive Brokers offer some of the best research available. They provide real-time comprehensive news, researchers, and market data to help you make informed decisions. You can also monitor the most recent developments and use risk management tools. The software is constantly being updated, so you can try out different versions, including those still being tested.

They also provide a wide range of learning materials, insights, and technology solutions to improve your trading experience. This includes various apps, widgets, and advanced software. Interactive Brokers, being one of the largest trading platforms globally, offers support with high-quality educational materials through its Traders Academy.

At the Traders Academy, you can access trading tools, investment product courses, and risk analysis courses, as well as videos, webinars, traders’ insights, news, and updates.

Customer Support

Interactive Brokers has support centers around the world to help traders. They have different types of support for different kinds of investors, like individuals and institutions. If you’re a regular trader, you can easily get help through phone support, a live chat room, contact search, reporting problems, giving feedback, and requesting new features. This level of professionalism is not common among many brokers. We should highlight Interactive Brokers’ great services, both overall and specifically.

Conclusion

In conclusion, Interactive Brokers is a highly trusted broker that is regulated in many financial centers around the world. It’s known for its competitive commission rates and advanced technology for trading. Interactive Brokers constantly develops and offers new products, such as Bitcoin trading through CFDs. One of the best things about Interactive Brokers is its technical development. It provides a variety of platforms and tools that meet the needs of different traders, whether they’re beginners or experienced professionals. These offerings benefit both traders and institutions by providing top-notch technology.

Interactive Brokers Licenses