Interactive Brokers (IBKR) broker review 2020. IBKR is an ideal broker for active and advanced traders. Its low-cost services are very attractive and the all-encompassing mobile app simplifies trading for everyone. With the amount of technology they offer, IBKR broker focuses on attracting larger investors. This broker is one of the best choices for experienced investors, while at the same time making new investors curious about their trading platform. Find out if Interactive Brokers is the brokerage for you.
The beginning of IBKR
Thomas Peterffy founded Interactive Brokers (IBKR) initially under the name of T.P. & Co. in 1978. Peterffy likes to predominate several discussions on national television. The latest subject he discussed was the effect of the outbreak of Coronavirus on the economy and the market. The US-based broker who is the subsidiary of Interactive Brokers Group, Inc. (listed on NASDAQ exchange) is headquartered in Greenwich, Connecticut.
This remarkable broker exercises its business over 135 markets worldwide with approximately 797,000 trades executed per day. With an equity capital of $7.9 billion of the group, this broker occupies its position in the leading choices for investors.
From well-built trading platforms to research material and with a wide range of markets offering low trading commissions, this broker gives its clients a complete package to invest and is also equipped with customer support to address their queries.
Trading platforms are one of the first things clients are concerned about. IBKR offers different platforms to trade such as the most common and evergreen Web trading platform. Other platforms include mobile application trading and advanced desktop software-based platform.
Web trading platform
The web-based platform is well built and user friendly. However, it is not customizable and rather stays standard. With a vast variety of tools to exercise including advanced charting, detailed quotes and dedicated news section, the web platform occupies the top position. This platform targets newer clients who prefer easy to navigate experience. For additional security layer, they have added the two-factor authorisation to log into the portal.
Like other leading brokers in the market, this broker has also stepped up with their super convenient mobile application based platform called IBKR Mobile, which can be downloaded for free. The application is available for both iOS and Android devices and comes with a slightly more complex interface than the web platform. This on the go version enables users to access all the information at hand. It is extremely secure as it not only comes equipped with the double verification process but also has the feature of biometric verification to get into the app.
This is their flagship and the most powerful platform specifically designed for experienced investors and active traders. The TradeWorkStation (TWS) comes with the most advanced tools such as the scanner and charting but is not very much of a user-friendly platform. It is actually the most complex in all and includes very few in-app directions on how to use it. This desktop-based interface is customizable and provides all the alerts and notifications needed for complex transactions.
One of the biggest features of Interactive Brokers is that it gives its customers an enormous range of products to trade. Access is granted to the biggest markets such as NASDAQ, New York Stock Exchange, London Stock Exchange and other Asian & European stock exchanges.
Other products include Forex (more than 100 currency pairs), Options, Futures (32 markets), Metals, CFDs, Cryptocurrencies, Bonds, ETFs, Indices, Mutual Funds and even Penny stocks. This extreme variety makes IBKR attractive to investors.
There are 98 commission-free ETFs for Pro traders while Lite users go absolutely free from commissions. For options, you will pay about $0.15 to $0.60 depending upon the type of contract you obtain. Trial account is available for investors to test and find the best for them.
Is it safe to trade with IBKR?
With providing annual financials and its Parent company is listed on NASDAQ, it is considered a transparent entity. IBKR is regulated globally by several top-tier financial authorities, such as the Financial Conduct Authority (FCA) in the UK.
Being a registered broker in the US, it is regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) making it a safe choice for investors to trade through them.
Before you get forward to know the account types and fee, it is better to gain an understanding of whether this broker is for you or not.
The primary target for this broker is to get experienced investors, those who are active traders and trade frequently. However, this does not imply that it is not for beginners. New investors overwhelm it too. The demo account would be a great help to assess the situation.
IBKR offers a wide range of account types, which varies from person to person. The two major types are IBKR Lite and IBKR Pro.
IBKR Lite is recommended for new or casual traders who have a low-level profile and the broker charges a low fee from them. While the commissions charged from IBKR Pro is high but it gives the users a wider range of analysis, research and advanced features.
The margin rates range from 1.39% APR from 3.59% APR depending upon the trading volume. Margin trading is available on both Lite and Pro accounts.
You can easily create an account from any country. The only exception is if you are from a country having highly unstable economic or political backgrounds such as Nigeria and North Korea.
Interactive Brokers takes the lead from its competitors when it comes to fees. It charges only $0.005/share with a minimum of $1/order and a maximum of 1% of the trade value. IBKR Lite program users go free from this commission too.
However, despite the low trading fee IBKR charges high inactivity fee for non-US traders. It expects you to generate $10 in monthly commissions to avoid the inactivity fee.
The deposit can only be made through bank transfer and no electronic wallet is available. As per the records, about 69% of retail investors have lost their money while trading with this provider. It is highly advised to consider your understanding before investing in such a business.
Learning and Research
Access to a wide range of research providers and news services are available. The newsfeed provides access to daily happenings and third party news recommendations. The only issue is with the interface being complicated and not user friendly.
A lot of trading ideas and courses are accessible on all platforms with tutorials. Live sessions through Webinar are provided to educate users. Education material comes with different tools and paper trading account with virtual money.
For people seeking a better understanding of markets and broker services, IBKR Traders’ academy is there with 48 courses to help them. The TWS takes researching to a step further with advanced research tools such as scanning and backtesting.
Interactive Brokers have won numerous awards for its services from different reviewers. Some of them are listed below.
- Best Online Brokers
- Best for Advanced Traders
- Best for International Trading
- Best for Day Trading
- #1 for Commissions and Fees
Customer support is also one of the key areas, which attract clients. Interactive Brokers had a bad reputation for their customer support. However, over the past few years, IBKR has improved a lot in this regard.
They offer a number of ways for clients to get in contact with them including 24/7-phone support as their main attraction. A live online chat through a human agent is also available 24 hours from Monday to Friday.
Along with another mainstream email support feature, they have up their game through an AI-powered iBot that answers all the relevant questions and FAQs.
The feedback from people online is very mixed. Most of them are telling where this broker has lacked in providing their services. They are still not very amused by the Customer support despite the recent changes IBKR have made.
Another big gap they need to work on is the trading platforms being very complex and not user friendly. Advanced options may have been given but they are quite difficult to understand.
The biggest reason people are supporting this broker is because of the access it provides to numerous markets and variety of products. Further, the low commissions offered are like a cherry on top.
With all the products and markets along with a wealth of tools, Interactive Brokers is a top choice for investors and for those who are active and advanced traders. Their low-cost services are always an eye-catcher and a comprehensive mobile app makes trading even simpler.
They have put a lot in technology to attract bigger and experienced clients. The amount of tools they offer is the reason for being one of the best choices for experts but at the same time intimidate new investors.
Although it might not be a good choice for beginners to start from this platform now with IBKR Lite, they can enjoy the low margin rates. High inactivity fee could be a trouble if you are not an active trader. But you can always cash the trial account to find out what’s best for you.
Interactive Brokers, IBKR, is one of the first brokers in the world. Want to see the difference between an established broker and a new innovative broker? Then Hugo’s Way is the broker to compare.
Country of Regulations
SEC (US), FINRA (US), FCA (UK)
Forex, Stocks, Cryptocurrencies, Indices, ETFs, Options, Commodities and Bonds
Bitcoin, Ethereum, Bitcoin Futures
Yes, iOS and Android
Fixed and tiered