Have you been searching for an online stock broker that offers rock-bottom fees and a huge selection of investment options? You can go for Interactive Brokers.
As one of the largest electronic brokerages, Interactive Brokers gives you access to over 120 markets in 33 countries. Whether you’re a casual investor looking to trade a few stocks or an advanced trader executing complex options strategies, Interactive Brokers has you covered.
In this article, we’ll go through everything you need to know about using Interactive Brokers. By the end of this review, you’ll know if Interactive Brokers is the right broker for your investment needs and trading style. Let’s get started with it.
An Overview of Interactive Brokers LLC
Interactive Brokers LLC is one of the largest online brokerages, offering trading in stocks, options, futures, forex, bonds, and funds on over 135 markets across 33 countries. If you’re looking for a broker with low commissions, a wide range of tools, and investment options for the serious trader, Interactive Brokers deserves a close look.
It has been around since 1977, making it one of the oldest and most established brokerages. They’re best suited for active traders, offering highly competitive pricing for high-volume traders. Commissions start at just $0.005 per share with a $1 minimum. They also charge low margin rates and give you access to global exchanges and various trading platforms to suit any style.
One of the biggest benefits of Interactive Brokers is their selection of trading platforms. You can choose between downloadable desktop software like Trader Workstation (TWS), web-based platforms, mobile apps, and APIs for coders. The TWS platform is the most popular and is packed with tools for advanced charting, analytics, trading, and customization. However, the huge selection of features and layouts can be overwhelming for new traders.
Interactive Brokers may not be ideal for beginners, but for intermediate to advanced traders, the combination of rock-bottom fees, a massive range of tradeable securities, and sophisticated platforms is hard to beat. If you’re looking to actively trade global markets and want access to every available asset class, Interactive Brokers deserves your consideration. Open an account and you’ll see why they remain an industry leader.
Trading Platforms, Fees and Account Options Offered
Interactive Brokers LLC (IBKR) offers three robust trading platforms to choose from. Their flagship platform, Trader Workstation (TWS), is free to use and packed with tools for advanced traders. It may seem complex at first, but spend some time learning the layout and you’ll be zipping around in no time.
IBKR charges some of the lowest commissions in the industry. Stock trades start at just $0.005 per share with a $1 minimum. Options contracts are $0.70 each. Futures, forex, and bonds are also very competitively priced. Account minimums are low too, starting at $0 to open a cash account and $2,000 for margin accounts.
Whether you’re a casual investor or a professional trader, IBKR has an account for you. Choose from individual and joint taxable accounts, as well as traditional and Roth IRAs. Advisors can open separately managed accounts. IBKR also offers accounts for businesses, trusts, and non-profits. Margin accounts provide leverage up to 50% of account value.
Portfolio margin accounts, which calculate requirements based on net position rather than gross position, are available for larger balances. IBKR accepts a wide range of collateral for margin, including stocks, ETFs, mutual funds, bonds, and eligible CDs.
Overall, Interactive Brokers provides a full-featured set of platforms, rock-bottom fees, and account options for traders of all experience levels. While the tools and options may seem complex, their low-cost, high-value offerings make wading through the details worth your while.
Pros and Cons of Using Interactive Brokers LLC
Interactive Brokers LLC, also known as IB, is a low-cost brokerage firm. Here are some of the main pros and cons of using their service:
Pros:
- Low commissions: IB charges very low commissions for stock and ETF trades. Options and futures trades also have low fees. This can save active traders a lot of money.
- Advanced trading platform: IB’s Trader Workstation platform offers advanced tools for options, futures, forex, and bond trading that professionals need. Charting, analytics, and algo trading are also available.
- Global access: You can trade stocks, options, futures, forex, bonds, and funds on over 100 global exchanges in 31 countries. This is perfect if you want to diversify internationally.
- Low margin rates: IB offers low-margin loan interest rates for those who want to trade on margin or short stocks. Rates start at just 1.5% and go down from there as your balance increases.
Cons:
- Lack of research: IB does not provide fundamental research reports on stocks. You’ll need to do your own research or get research elsewhere.
- No retirement accounts: Unfortunately, IB does not offer traditional retirement accounts like IRAs. You can only open taxable brokerage accounts.
Final Thought
Interactive Brokers deserves serious consideration if you’re an experienced trader wanting to take more control of your portfolio. The low-cost commissions and margin rates are hard to beat.
Just go in with realistic expectations about the complexity. If you can handle that, Interactive Brokers will give you everything you need to become a trading pro. Thank you all for reading this article.
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