Interactive Brokers Review (NASDAQ:IBKR)
Your Gateway to the World’s Markets
Trade on over 100 market centers in 24 countries. Direct market access to stocks, options, futures, bonds, ETF’s and CFD’s from a single IB Universal Account. Interactive Brokers offers a complete solution for professional traders which includes custody, execution and clearing, and reporting. Interactive Brokers offers lower commissions, no ticket charges; no minimums; no technology, software, platform, or reporting fees; and low financing rates.
Interactive Brokers Group, Inc. was founded by its Chairman and CEO Thomas Peterffy. Over the last 40 years, it has grown internally to become one of the premier securities firms with over $5 billion in equity capital. Their mission remains unchanged:
“Create technology to provide liquidity on better terms. Compete on price, speed, size, diversity of global products and advanced trading tools.”
Interactive Brokers conducts its broker/dealer and proprietary trading businesses on over 100 market destinations worldwide. In its broker dealer agency business, IB provides direct access (“on line”) trade execution and clearing services to institutional and professional traders for a wide variety of electronically traded worldwide. Interactive Brokers Group and its affiliates execute nearly 1,000,000 trades per day.
Interactive Brokers is headquartered in Greenwich, Connecticut and has over 1,100 employees in its offices in the USA, Switzerland, Canada, Hong Kong, UK, Australia, Hungary, Russia, Japan, India, China and Estonia. IB is regulated by the SEC, FINRA, NYSE, FCA and other regulatory agencies around the world. For further information regarding their complete offering for professional traders, please refer click here to visit their website.
Interactive Brokers Advantages
- Competitive commissions rates with fixed and tiered pricing (see commission rates)
- International market access
- Can trade from multiple account types (IRA, single registered, Joint, etc.)
- Many different asset classes and investment/trading options
- A robust Trader Workstation (TWS) with MANY tools
- Direct market access
- Free real time paper trading account for practicing in a simulated environment (when main account is funded)
- A robust online education center with tutorials for using the software
- Institutional level research and tools available to retail traders
- Competitive platform pricing
- Great options analytics tools and pricing
- Smartphone app works wells
Interactive Brokers Disadvantages
- Higher required minimum equity to open trading account than some of the other brokers($10,000)
As noted above, commission structure can be fixed or tiered, based on volume and even where you are trading from. There are many nuisances to consider, but generally, for most retail traders, the fixed pricing will be the most cost effective. Traders who take large positions in excess of 10k shares will often look for fixed pricing to reduce their costs.
However, Interactive Brokers has always been a big advocate of transparent pricing and that means you pay for exactly what you use. If you use lots of order flow, you pay for it. If you don’t, you don’t have to pay for it. This is not a bad way to price the commissions but can be more expensive for very aggressive traders who trade 100k-200k shares/day.
Final Interactive Brokers Review
Interactive Brokers is among the Top Recommended Brokers by Warrior Trading. They are also a top choice for international traders looking got take part in the US stock and options markets. It can be a great resource for new traders with decent capital. The tools and Trader Workstation can be overwhelming for newbs at first, especially since learning to use the software is a do it yourself kind of deal.
The cost of actual trading is for the most part, competitive if you aren’t trading big lots. The ability to switch between Forex, futures, options and equities from one screen and have multiple types of trades going can be very appealing to diverse traders. Also, if you are like me, you can trade from your IRA or other account types not allowed at many other US based brokerages.