Interactive Brokers Review (NASDAQ:IBKR)
In our Interactive Brokers Review we’ll be discussing the well known firm that has been around since 1977, and has had the same owner and CEO that entire time. Interactive Brokers is a broker dealer and has consolidated equity capital of over $5 billion. They offer trading in over 100 markets world-wide. Interactive Brokers is a direct access broker and works with professional trades and large institutions around the world, executing trades in a variety of asset classes including, stocks, options, futures, forex, bonds, CFDs and international mutual funds. They are responsible for nearly 1 million trade executions per day.
Interactive Brokers is an international firm, offering non US traders the ability to open a live account from just about everywhere in the world.
Interactive Brokers Advantages
- 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)
- Competitive commission rates
- 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
- High required minimum equity to open trading account than some of the other brokers($10,000)
- Slower executions via the SMART routing, Direct Routing is faster but more expensive.
- Per share pricing only, no per trade pricing (Expensive for high volume traders)
- Multi step security/login that requires the use of a physical decoder device. Good for security, a little challenging for UX.
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 tricky for very aggressive traders.
Final Interactive Brokers Review
Interactive Brokers is a great 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.
Reviews by Warrior Trading