Reviewed By Theresa W. Carey Updated Dec 23, We publish unbiased product reviews; our opinions are our own and are not influenced by payment we receive from our advertising partners.
Learn more about how we review products and read our advertiser disclosure for how we make money. The firm makes a point of connecting to any electronic exchange globally, so you can trade equities, options, and futures around the world and around the clock. In the fall ofInteractive Brokers rolled out its Impact Dashboard, which helps customers align their personal values with their portfolios, and rolled out additional ESG research and tools that locate international opportunities.
Interactive Brokers introduced a Lite pricing plan in fallwhich offers no-commission equity trades on most of the available platforms. We'll look at how Interactive Brokers stacks up in terms of features, costs, and resources to help you decide if it is the right fit for your investing needs.
Key Takeaways Wide array of asset classes including stocks, options, futures, and bonds in markets in 31 countries, using 22 currencies. Has offered fractional share trading for several years.
Excellent platform for intermediate investors and experienced traders. Who Interactive Brokers Is For Interactive Brokers primarily serves institutional investors and sophisticated, active traders around the globe.
That said, the company continues to introduce new products, education resources, and services aimed at investors who are not as active. Making the experience less intimidating for newer or less active investors is still a work in progress for the firm. In terms of serving its core market of active investors and experienced traders, however, Interactive Brokers is incredibly competitive.
In addition to unparalleled market access, IBKR has layered on a staggering array of tools that can meet almost every conceivable trading need. Pros Wide range of offerings around the world and across asset classes Mutual Fund Replicator finds less expensive ETFs Cons Streaming data runs on a single device at a time IBKR Lite customers cannot use the smart order router Binary option is that or inactive accounts generate substantial fees Pros Explained Interactive Rating of all dealing centers order execution engine has what could be the smartest order router in the business.
It stays on top of changes in market conditions to re-route all or parts of your order to achieve optimal execution, attain price improvementand maximize any possible rebate. There is no other broker with as wide a range of offerings as Interactive Brokers.
Besides the direct access to global exchanges, IBKR has added a huge inventory of fixed income products, including many European corporate bonds and Euro-denominated government bonds.
Interactive Brokers' mutual fund replicator helps you find lower-cost exchange-traded funds that are essentially identical to more expensive mutual funds. But if you prefer mutual funds, IBKR has nearly 12, mutual funds on offer.
Cons Explained You can only have streaming data on one device at a time. The IBKR Lite order router prioritizes payment for order flow, which is not shared with the customer. Small or inactive IBKR Pro accounts may be subject to maintenance fees or data charges, and interest is not paid on cash unless you have a substantial balance.
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Usability 4. You have to e-sign quite a few forms to rating of all dealing centers the account functioning, but most features are available to use as soon as your account is opened. You can open an account without making a deposit, but it will be closed if you don't fund it within 90 days of opening. Once you are set up, the Client Portal is a great step forward in making IBKR's tools more accessible and easier to find.
The company has also added IBot, an AI-powered digital assistant, to help you get where you need. TWS is a powerful and extensively customizable downloadable platform, and it is gradually gaining some creature comforts, such as a list titled "For You" that maintains links to your most frequently-used tools. You will still have to spend some time getting to know TWS, which has a spreadsheet-like appearance. The Mosaic interface built into TWS is much more aesthetically pleasing and it lets you arrange the tools like building blocks to form a workspace.
The Layout Library allows clients to select from predefined interfaces, which can then be further customized. You can also create your own Mosaic layouts and save them for future use. In short, you will need to put time in to get the exact experience you are looking for, but the design tools that you'll need are all there.
A winning combination of tools, asset classes, and low costs
Interactive Brokers' mobile app has almost all of the functionality of the web platform, though it is not nearly as extensive as TWS desktop platform. All the available asset classes can be traded on the mobile app.
Any mobile watchlists you create are shared with the web and desktop platforms, and data streams in real-time. The fundamental research is solid and the charts are very good for mobile with a suite of indicators. It is worth noting that there are no drawing tools on the mobile app.
Trade Experience 4. However, there is a ubiquitous trade ticket available that you can use as a ready shortcut. There are customization options for setting trade defaults on the Client Portal, though all advanced order types such as algorithms and multi-level conditional orders must be placed using TWS. Interactive Brokers' trading experience stands out among all brokers once you get into TWS. TWS lets you set order defaults for every possible asset class, as well as define hotkeys for rapid order transmission.
Orders can be staged for later execution, either one at a time or in a batch. You can set a date and time for an order to be transmitted, or set up a complex conditional order that is activated after specific conditions are met, such as a prior order executed or an index reaching a certain value. The ways an order can be entered are practically unlimited.
You can even rating of all dealing centers an application to place options pattern trades to TWS, or subscribe to trade signals from third-party providers.
Mobile Trade Experience On the mobile app, the workflow is intuitive and flows easily from one step to the next. Data streams in real-time, but on only one platform at a time. This one-at-a-time approach could be an issue for traders who have a multi-device approach to their trading workflow, but it isn't an issue for the traditional trading session on a single interface. Rating of all dealing centers mobile platform offers all of the research capabilities of the Client Portal, including screeners and options strategy tools.
Range of Offerings 4. The firm adds new products based on customer demand and links to new electronic exchanges as soon as technically possible. In AprilIBKR expanded its mutual fund marketplace, offering nearly 26, funds from more than fund families that includes funds from global sources.
That said, it is worth noting that IBKR does not offer cryptocurrency trading aside from Bitcoin futures. With the exception of cryptocurrencies, investors can trade the following: Stocks long and short 23, available to borrow. IBKR assembles a list based on true borrow availability. OTCBB penny stocks Mutual funds world's largest mutual fund marketplace with nearly 26, funds available.
IPOs, warrants, and single stock futures Order Types 5 Interactive Brokers allows a flexible array of order types on the TWS, Client Portal and the mobile apps, including conditional orders such as one-cancels-another and one-triggers-another. Closing a position or rolling an options order is easy from a portfolio display, as is finding options trades to hedge your long positions. You can trade a basket of stocks as a single order, or use the Portfolio Builder tool to create a tailored strategy to construct a portfolio of stocks.
You can trade share lots or dollar lots for any asset class. Additionally, for an options order, a customer may opt to enter Deliverable Value, specifying the dollar value of the stock that the customer would be assigned if the option expired in the money. This is a unique feature.
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If you've been buying into a particular stock over time, you can select the tax lot when closing part of the position, or set an account-wide default for the tax lot choice such as average cost, last-in-first-out, etc.
The Tax Optimizer tool allows a client to match specific lots on a trade-by-trade basis and maximize tax efficiency by previewing the profit and loss of each available scenario. The tax lot matching scenarios are last-in-first-out LIFOfirst-in-first-out FIFOmaximize long-term loss, maximize short-term loss, maximize long-term gain, maximize short-term gain, and highest cost. You can also set an account-wide default for dividend reinvestment.
Trading Technology 4. For multi-leg options orders, the router seeks out the best place to execute each leg of a spread, or clients can choose to route for rebates. Any payment for order flow is given back to the client for IBKR Pro clients but not those using the Lite pricing plan. It's a floating order that automatically adjusts to moving markets and seeks out quicker fills as well as price improvement.
Clients can choose a particular venue to execute an order from TWS. Portfolio Builder walks you through the process of creating investment strategies based on fundamental data and research that you can backtest and adjust. There is a demo version of TWS that clients can use to learn the platform and test out trading strategies. The order router for Lite customers prioritizes payment for order flow, which is not shared with the customer.
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Costs 2. There are three types of commissions for U. Includes all exchange and most regulatory fees. It does not include exchange and regulatory fees. Traders may get a rebate on maker-taker fees assessed by some trading venues.
Trades are routed to generate payment for order flow, which is not shared with the client. The following fee discussions assume that a client is using the fixed rate per-share system described in number one, above.
There is no per-leg fee for trading options.
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Margin interest for Pro customers is 1. Very large margin balances for Pro customers pay 0. These are x trade binary options lowest interest rates among the brokers surveyed.
There are no inactivity fees for Lite customers. No fees to close or transfer an account. No fee for receiving a wire. Clients can place trades through a live broker for large block orders and for fixed income transactions; fees vary.
How This Broker Makes Money From You and for You The fees and commissions listed above are visible to customers, but there are other ways that brokers make money that you cannot see. Interest on cash: Like most brokers, Interactive Brokers generates interest income from the difference between what you are paid on your idle cash and what they can earn on customer cash balances. Interest paid on other currencies and values varies and is listed on the Interest and Financing schedule.
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Payment for order flow: Quite a few brokers generate income by accepting payment from market makers for directing their customer's equity and options orders to those trading venues. This is called payment for order flow. Interactive Brokers received an average of less than 0. Stock loan programs: Stock loan programs generate revenue for brokers when the stock held in your account is loaned to another trader or hedge fund, usually for the purposes of selling that stock short.
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This includes Canadian stocks as of Portfolio margining: IBKR clients who qualify can apply for portfolio marginingwhich can lower the amount of margin needed based on the overall risk calculated. Typically, portfolio margining works best for customers who trade derivatives that offset the risk rating of all dealing centers in their equity positions.
Account Amenities 4 Qualified clients can apply for portfolio margining. There are some hoops to jump through to earn interest on idle cash. IBKR Lite clients earn just 0. Interest is automatically paid on qualifying cash balances. Clients can set an account-wide default for reinvestment of dividends on qualifying stocks.
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Research Amenities 4. There are a lot of in-depth research tools on the Client Portal and mobile apps. Research on Traders Workstation takes it all a step further and includes international trading data rating of all dealing centers real-time scans.