Interactive Brokers

Interactive Brokers is a terrific multinational brokerage firm that lets individuals and institutions execute trades and investments worldwide with an all-in-one mobile app and website. It has a reputation in the options trading industry as the single broker with the lowest transaction costs on its options, EFTs, stocks, and bonds. Not only that, they have continued to improve their offers to customers which has allowed them to stay ahead of most of the competition.

For these reasons, as well as others that you will learn more about below, Interactive Brokers has become one of the most acclaimed online options brokers currently available. As we reviewed this platform and got more familiar with it, we quickly realized that there was a lot more to it than meets the eye. It continually impresses as you get to know it’s features and with the low transaction costs, it makes it a hard option to ignore.

Our review of Interactive Brokers will give you some comprehensive insights into the mobile app’s features, the pros and cons of the platform as a whole, and how it compares to other brokers in this competitive market. Keep reading to learn more!

Pros and Cons

Let’s jump right into it. What are the key strengths and weaknesses of the Interactive Brokers app and website? We’ll look at the primary pros and cons we discovered while testing our I.B. mobile app and website. While it’s one of the best online brokerages, there are some downsides to using Interactive Brokers.

Pros

• Free Educational Resources: Interactive Brokers offers free courses on online trading, including the IBKR Campus, Traders’ Academy, Traders’ Insight, and the Trader’s Glossary or Calendar. You can also check out the IBKR podcast, quant blog, and webinars.
• Good for Individual, Professional, and Institutional Traders: Whether you’re new to trading or have been trading for a long time and have a ton of experience, Interactive Brokers offers investment opportunities. Businesses and other institutions can also create accounts at Interactive Brokers.
• Low Transaction Costs: Interactive Brokers’ operating costs and fees are lower than those offered by other online brokers. Your overhead is much better here than with other options.
• Lite and Pro Versions: Interactive Brokers is notable for having multiple versions of their service to cater to traders or investors of all skill/experience levels. Lite is for beginners or intermediate users, while pro can be enjoyed by seasoned vets and those with some decent experience but want to take things to the next level.
• Includes Wide Range of Asset Classes: Because I.B. is geared toward new, intermediate, and seasoned traders, the site caters to a wide range of asset classes. When you register a new account, you’ll be asked about your income and net worth to determine the best version of the site to proceed with.
• Free Demo Account Available: Use Interactive Brokers’ free trial to test the site and see if it is a good option for your online trading or investment goals.
• Portfolio Builder Tool: Plenty of tools come with I.B. that help members build the best possible portfolio by selecting the best trades or investments. Develop a winning strategy using the builder tool for your online portfolio!
• Global Trading Opportunities: Customers at Interactive Brokers can invest and trade options, stocks, or EFTs worldwide. Over 40 countries are available.

Cons

• Unresponsive Customer Service: Many customers complain that the support center isn’t responsive to phone calls or emails. There’s an FAQ page aimed at customers who’d prefer to troubleshoot problems independently, but it’s not a suitable substitute for speaking with a human service representative.
• Difficult-to-Navigate Website: The website configuration doesn’t make things easy for new users unfamiliar with online trading. While testing Interactive Brokers, finding the information we needed was challenging. The site is information-dense and can be overwhelming to digest.
• Not the Best for Beginners: Though there are versions of Interactive Brokers that cater to newbie investors or traders, getting your feet wet using I.B. is almost like a trial by fire. The site comes with educational materials, but even these can be difficult to understand, making putting the principles into practice quite challenging.

Fees and Commission Cost

Now, let’s look at the fees and commission rates you might encounter while using Interactive Brokers during your trading or investment endeavors. I.B. is well-known for its low transactional costs, so the fees and commissions listed here are well below what you’d be paying going with most other online brokers.

Commission Structure

Below, we have created a table detailing the commission structure you will find at Interactive Brokers.

**Commissions charged for fractional share trades and whole share trades are the same unless otherwise noted.

Withdrawal Fees

Interactive Brokers has no inactivity fees, so this next segment will focus solely on withdrawal fees you might run across. It all depends on where you’re located and which kind of currency you’re using.

Trading Platforms and Features

Interactive Brokers offers several platforms that cater to new, intermediate, and experienced traders or investors. Each iteration of the service provides unique tools for choosing the best stocks or EFTs and for developing a robust, diversified portfolio. Keep reading to learn about each platform and which features are available for those specific Interactive Brokers members.

Platform Overview

Interactive Brokers offers its members four main platforms. Which platform is best suited for your goals and the experience you hope to have depends on your skill set and your current level of experience in trading or investments.

• IBKR Desktop: This easy-to-use platform allows users to trade stocks, options, and futures on over 150 markets. This version of IBKR contains popular tools from Trader Workstation (TWS) and some helpful features that IBKR clients have suggested. Interactive Brokers recommend this version to beginners or intermediate traders.
• IBKR GlobalTrader: This product lets beginner and international traders invest with as little as $1 and trade in fractions. It’s a good way for newbies to trade stocks, options, or EFTs in 90+ stock markets worldwide, including the NYSE, NASDAQ, HKSE, and LSE.
• IBKR Trader Workstation (TWS): This version is the next step up, which makes it ideal for intermediate and advanced traders. You can trade currencies, bonds, and funds in addition to stocks, options, or futures in over 150 global markets. It’s suitable for selling multiple products and lets traders enjoy power and flexibility in their experience.
• IBKR Mobile: Again, this is another good option for intermediate and advanced traders. It does everything the Traders Workstation can do but in mobile form. You can access all the advanced trading tools and order types from anywhere.

Supported Investment Products

Key Features

Interactive Brokers offers impressive features, perks, and benefits for new and seasoned traders. IBKR indeed offers helpful features and functions for effective trading and investment opportunities. We have a lot to cover here, so buckle up.

• Accumulate/Distribute Algo: Get the best price for your large volume orders without being noticed in the market. The algo comprises strategies, conditions, features, and order types.
• Fundamentals Explorer: Interactive Brokers provides its members with worldwide fundamental data at no cost.
• Bracket Orders: To limit possible losses and lock in profits, get your orders “bracketed” into two opposite-side orders.
• Trade in Fractions: Divide your investments among more stocks to achieve a better-diversified portfolio. This method helps turn small cash balances into returns.
• Strategy Builder: Build multi-leg option strategies. This feature and Option Chains can help you easily create common strategies!
• Write Options Tool: The write option tool makes it easier to write covered options or buy protective puts by quickly showing all of your long and short positions.
• Rollover Options Tool: This feature shows traders which options in their portfolio are close to expiring. It also captures sub-accounts!
• Stock Yield Enhancement Program: Gain extra income on fully paid shares of stock in your online account.
• Model Marketplace: Use professionally built, research-driven models to create the perfect client investment model in just minutes.
• I.B. Risk Navigator: Discover the measure of risk exposure across multiple asset classes. Manage risk in real-time in various markets worldwide.
• Rebalance Your Portfolio: Redistribute the current position weighting in your portfolio to keep things well diversified.
• FXTrader: Enjoy an optimized trading interface and IB-designed tools for trading the currency market with FXTrader.
• Options Liquidity Tool: Directly route orders to the IBUSOPT destination, where they interact with the retail order flow. This is a terrific way to create liquidity-adding strategies.
• CME Micro Bitcoin: Enhance your trading strategy by using CME Micro Bitcoin, which is 1/10 the size of one bitcoin. It lets you increase bitcoin exposure in an efficient and cost-effective way.
• IBKR GlobalAnalyst: Use the GlobalAnalyst to find undervalued stocks. You can find relative valuations individually or by industry, region, or country.
• TradingView: This is a social network of 30 million investors and traders where you can spot opportunities across global markets.
• Book Price Ladder: You can create, modify, and transmit orders in one online place. You can create an order at any price, including the best bid and ask. This is all done using a single instrument within the book price ladder.

Usability

If you’re new to online trading or Interactive Brokers, certain versions of the product are better suited to newbies. These include the IBKR Desktop and IBKR GlobalTrader versions of the service. New traders can invest as little as $1, so they can put small cash balances to work to maximize their potential returns.

Advanced traders can enjoy the IBKR Trader Workstation and IBKR Mobile, which offer access to 150 world markets instead of 90. These tools offer a broad suite of excellent tools for making quick and efficient trades on stocks, options, futures, funds, bonds, or currencies.

Compatibility

Interactive Brokers is compatible with several mobile devices and desktop operating systems, which means you can use It just about anywhere. You can use the official website to execute your trades or manage your portfolio, and you can also download the app from Google Play or the App Store. Traders or investors who aren’t using an Apple or Android mobile device can still use the website on the go, so long as they have a reliable internet connection and a web browser.

Account Types and Requirements

We’ve mentioned that Interactive Brokers has been expanding its business to accommodate individual trading. This means that newcomers to Interactive Brokers can set up several kinds of accounts, depending on what kind of venture they’re looking to pursue.

We’ll quickly review the various account types available on the Interactive Brokers website. You can learn more about each account by clicking on the “More Info” link under each selection. To open an account, click “Open an Account.”

• Individual Accounts: A single account holder
• Joint Accounts: Two account holders
• Trust Accounts: Legally established entity where assets are held by one party for the benefit of another party
• IRA Accounts: Individual retirement accounts (U.S. tax residents only)
• UGMA/UTMA Accounts: An individual or entity that manages an account for a minor
• Non-Professional Advisor Accounts: An advisor who is exempt from registration and has 15 or fewer clients
• Family Office Accounts: An individual who is a Family Office Manager
• Small Business Accounts: A small business corporation, partnership, limited liability company, or an unincorporated legal structure
• Advisor Accounts: An individual or organization registered advisor that is managing both the client’s money and administration (wealth management)
• Money Manager Accounts: An individual or organization registered advisor that is hired on behalf of another advisor to manage the client’s money
• Broker and FCM Accounts: A registered broker or FCM that provides advice and marketing services to their clients
• Proprietary Trading Group Accounts: A corporation, limited liability company, partnership, or unincorporated legal structure
• Hedge Fund and Mutual Fund Accounts: Single or multiple funds managed by an investment manager
• Compliance Officers: Any organization that needs to monitor all or some of their employees’ trading activities
• Administrators: Any organization that provides third-party administrative services to other institution accounts
• Institutional Hedge Fund Investors: Any institution such as a foundation, family office, pension, endowment, or fund of funds that wants to access hedge fund investment opportunities

Account Opening Process

Follow the step-by-step guide below to open an Interactive Brokers account and the included documentation to get your new account up and running. Whether you’re signing up as an individual, joint, or institutional investor, the signup process will follow the same general steps.

1. Create a unique username and password for logging in and out of your Interactive Brokers account.

2. You must submit the following documentation:

• Social security number
• Employer name, address, and phone number
• Estimated net worth
• Estimate liquid net worth
• Total assets
• Annual net income
• Bank or 3rd party broker account number for funding
• Routing number for check deposits
• License or registration numbers for commodities, securities, or forex qualifications

3. Fill out the trading experience survey.

4. Choose an account type and a base currency.

5. Fund your account before you begin your trades and investments.

Opening an account with Interactive Brokers usually takes around three business days. If any additional steps need to be completed, Interactive Brokers will contact you via email or within the “Complete Application.”

Minimum Deposit Requirements

Fortunately, Interactive Brokers doesn’t require a minimum deposit to open a live trading account, but you must satisfy a minimum deposit limit in a few account types. This includes the following:

• Margin Accounts: $2,000 (the regulatory minimum for all brokerages)
• Physical Currency Deposits: Minimum fee of $50 and a special handling fee of 1% of the deposit amount
• Accounts with Less Than $100,000 in Net Liquidation Value: The investor must generate at least $10 in monthly commission to avoid monthly activity fees

Security and Regulations

Interactive Brokers is a legitimate online brokerage firm subject to the rules and regulations of several regulatory bodies in the United States and abroad. According to the information on their Regulatory Information page, they are “an agency-only, direct market access broker that provides execution, clearance, settlement, and prime brokerage for customers. Our business encompasses securities and commodities brokerage. I.B. does not engage in proprietary trading.”

The following regulatory bodies oversee Interactive Brokers to ensure that they are adhering to industry standards all across the world:

• U.S. Securities and Exchange Commission
• Financial Industry Regulatory Authority
• The Commodity Futures Trading Commission

Security Measures

Interactive Brokers has several account security features, some of which you typically find on any online brokerage website. They include:

• Two-Factor Authentication: When members set up their new accounts, they must enter a secure username and password, but they can up the security factor by including a security question, which adds an additional step for accessing the account.
• Encryption: Interactive Brokers has a strong encrypted connection that keeps its customers’ personal and financial data completely confidential, such as any net worth or income information they might share during the signup process. This also includes any money deposited into the market using I.B.

Final Thoughts: Is Interactive Brokers Right for You?

Interactive Brokers is a competitive online brokerage platform that can be used by individual traders, investors, and institutional investors. The lower transaction costs and a wide array of worldwide options are super appealing to most investors!

Based on what we observed during the review process and from reading the firsthand experience of current and former members, we feel that Interactive Brokers is best for:

• Casual and advanced traders
• Day traders
• Margin accounts
• Options trading
• Research and data
• International investors

Frequently Asked Questions

Check out our readers and customers’ frequently asked questions about Interactive Brokers and options trading on their platform. We did our best to address the most significant concerns and questions on I.B. with some quick answers.

What Kind of Account Can I Make on Interactive Brokers?

When running an individual or joint account at I.B., you can start a trust, IRA, or UGMA/UTMA accounts. Suppose you’re running an institutional account with Interactive Brokers. In that case, your options include non-professional advisor or advisor accounts, family office accounts, small business accounts, money managers accounts, broker/FCM accounts, hedge fund/mutual accounts, administrators, compliance officers, etc.

Is Interactive Brokers Legit?

I.B. is in regulatory compliance with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, and the Commodity Futures Trading Commission. They also include security measures for customers, like a solid SSL-encrypted connection and two-factor authentication to keep all members’ private data safe and secure.

Which Order Types are Available?

Interactive Brokers lets you submit a wide range of order types. Members who want to buy or sell shares immediately at current market prices can submit market, market-on-close, or market-on-open orders. Stop-loss orders and stop-limit orders help members mitigate risk. Limit, limit-on-close, and limit-on-open orders are also available.

How Can I Manage Risk?

Interactive Brokers provides several excellent risk management tools. These include Automatic Position Liquidation (also known as the Stop-Loss Order), real-time monitoring systems (volatility metrics), the Interactive Brokers Risk Navigator, and automatically vetted orders on a pre-trade basis.

What’s Interactive Brokers’ Market Position Like?

I.B. is one of the best options online for trading or investing in options or EFTs. To give you a sense of where I.B. is sitting since its inception in 1978, we give you the following market position information from this past year:

• Number of Clients: 2.92 million
• Total Customer Equity: $426 billion (December 2023)
• Equity Capital: USD 15.2 billion
• Excess Regulatory Capital: USD 10.4 billion
• Daily Average Revenue Trades: 2,469,000
• Countries Available: 34
• Number of Market Centers Worldwide: 150
• Currencies Available: 27

What Can I Trade and Invest In Using Interactive Brokers?

Online users can invest in and trade options, stocks, exchange-traded funds (ETFs), futures, futures options, bonds, warrants, foreign exchanges, mutual funds, metals, cryptocurrencies, structured products, and indices.