Interactive Brokers Review: A Powerful Trading Platform

If you're a trader, finding a platform that has the tools and a reasonable pricing structure can be tough. However, that's where Interactive Brokers is looking to gain your business.

Interactive Brokers (or IBKR for short) was one of the original online brokers. Over time, they've niched their focus to traders, and offer a full suite of tools that can help active traders make a profit.

While they may not be the best for some, they do have a compelling offer for those who are active. Check out how they compare to the top online brokers.

Plus, for those who don't need all their tools, they have Interactive Brokers Lite, which is a commission-free trading platform.

Who Is Interactive Brokers?

Interactive Brokers Group, Inc., or IBKR as it is also called, was one of the original online brokers. Their past stretches back 40 years. They are a global operation with headquarters based in Greenwich, Connecticut.

They are regulated by the SEC, FINRA, NYSE, FCA and other regulatory agencies depending on the countries they operate in. IBKR is a NASDAQ-listed company under the symbol IBKR. IBKR was founded by its chairman and CEO, Thomas Peterffy. Peterffy owns 75% of the company.

What Do They Offer?

Interactive Brokers is online broker that offers low-cost commissions and a Its platform has so many bells and whistles that it's beyond the scope of this review to break each one down in detail. However, here's a quick look at several of its most noteworthy features.

Expansive List Of Tradable Assets

Interactive Brokers has the widest range of securities available for trading that we've seen. Basically, if you want to trade it, IBKRhas it. Here a few examples of the platform's supported assets:

• Stocks
• Options
• Forex
• Futures
• Metals
• ETFs and mutual funds
• Bonds

Interactive Brokers also recently launched support for cryptocurrency trading. Currently, only Bitcoin, Bitcoin Cash, Ethereum and Litecoin are supported. But the fee structure is highly competitive at 0.12% to 0.18% of trade value with no additional spreads or markups.

Advanced Trading Tools And Order Routing

IBKR has an advanced trading platform. It packs in one of the largest feature sets of any online brokerage platform. The platform is broken down into six categories:

• Client portal: See your account balances, do transfers, and most any other account-related activity.
• Trader Workstation (TWS): Desktop trading platform.
• IBKR Mobile: Mobile trading platform.
• IBot: Understands natural language commands such as asking for quotes and balances.
• IBKR WebTrader: Web version of desktop trading platform.
• IBKR APIs: Allows developers to integrate their own software with IB’s back-end brokerage and trading services.

IBKR is oriented toward active traders and gives them all the technical tools necessary to analyze stocks, options, and trades. IBKR also has fast-trade executions through its SmartRouting system. A third-party audit conducted by IHS Markit found that SmartRouting provided an average price improvement per 100 shares of $0.62 while the industry average was $0.15.

IBKR offers over 100 order types, which absolutely boggles the mind. It's also a low-cost leader in margin rates. Currently, the most you'll pay is 2.58%. But you could pay much less depending on your account balance and whether you're a IBKR Lite or Pro user. Here's IB's margin rate table for U.S. residents:

Great For International Trading

Most U.S. brokers don't allow residents of other countries to open accounts. But Interactive Brokers joins Charles Schwab as one of the few trading platforms that tries to appeal to international citizens and expats.

Residents of over 200 countries and territories can open accounts with IBKR. And the platform provides access to over 130 financial markets.

Just keep in mind that foreign-domiciled funds could be considered passive foreign investment companies (PFICs) by the IRS. And investing in PFICs can add a lot of tax headaches for U.S. residents. If you're worried about the tax implications of a particular foreign investment option on IBKR, consult a tax pro before you invest.

If you decide to use IBKR, sticking with U.S.-domiciled investments will be your safest bet. And if you really want to invest in a foreign mutual fund or ETF, you should probably talk to a tax professional to make sure that you handle everything correctly.

Education

There's a very large online educational section and community on the IBKR platform as well. Learning opportunities include:

Each of the programs listed above are collectively referred to as "IBKR Campus." Check out this quick video tour that explains more about what IBKR Campus has to offer:

Managed Portfolios

Interactive Brokers offers a variety of managed portfolio options under its "Interactive Advisors" product umbrella. Each of the portfolios are well-diversified and built to match your risk tolerance. 

Interactive Advisors portfolios come with AUM fees that range from 0.08% to 1.5%. Many have an investment minimum of $100, but some are higher.

What Are The Fees?

IBKR has two membership tiers: Lite and Pro. Here are the pricing structures for each:

IBKR Lite 

Lite members don't pay any commissions on stock and ETF trades. However, all other assets follow the same fixed or tiered pricing structure as IBKR Pro (described below).

IBKR Pro

IBKR Pro has two different commission structures — fixed and tiered. Fixed is for lower volume while tiered is for higher volume.

In the fixed commission structure, stocks and ETFs are $0.005 per share with a $1.00 minimum. The maximum fee is 1.0% of the trade value. 

Tiered pricing for stocks and ETFs starts at $0.0035 with a minimum of $0.35 and maximum of 1.0% of the trade value for 300,000 or more shares. At over 100 million shares, the price drops to $0.0005 with the same minimum and maximum.

For options contracts, there is also a tiered structure as shown in the table below:

IBRK Lite vs. IBKR Pro

Why would anyone choose to become an IBKR Pro member if they can pay $0 commissions on stocks and ETFs with Lite? Because only Pro members get to use IBKR's SmartRouting technology with its average price improvement of $0.62 per 100 shares.

If you're a low-volume trader, IBKR Lite is probably the way to go. But if you trade a lot of shares every month, you may actually be better off choosing the Pro membership so that you can be sure that your trades are being routed as efficiently as possible.

How Does Interactive Brokers Compare?

Interactive Brokers (IB) is hard to beat for active traders. Its list of supported assets, markets, and order types are virtually unmatched in the industry. 

However, if you're looking to invest in managed portfolios, other brokers have lower minimums and fees. You'll also need to look elsewhere if you're hoping to invest inside a Solo 401(k). Here's a closer look at how IBKR compares:

How Do I Open An Account?

Visit the Interactive Brokers website to start your account application. The information that IBKR asks for will vary depending on where you live. But U.S. residents who are simply looking to open a taxable account will need to provide the following:

• Social Security Number (or proof of ID number if you're a non-citizen)
• Employer name, address, and phone number
• Bank or third-party broker account information (for funding purposes)

If you're looking to open an IRA, you'll need to provide additional information about your beneficiary. Once your account is approved, you can make our first funds transfer. Funds that have arrived by 4 PM (ET) will be available to trade the next business day.

Is It Safe And Secure?

Interactive Brokers is an SIPC member which means that its clients' securities are protected by SIPC insurance up to $500,000 ($250,000 for cash). IBKR has also purchased an excess SIPC policy with Lloyd's of London for up to an extra $30 million ($900,000 for cash) and provides up to $2.5 million of FDIC protection for cash deposits above these limits.

IBKR takes data security seriously as well. Its deploys 2048-bit EV Certificates and a minimum of TLS 128-bit encryption on its website. Two-factor authentication is used to verify account logins. And customers with account balances of at least $1 million can even request to be sent a physical security device.

How Do I Contact Interactive Brokers?

In addition to its iBot AI assistance, IBKR offers 24/7 live chat support. It also provides phone support in the following countries and geographic areas:

• Canada
• Europe
• Hong Kong
• Hungary
• India
• Japan
• Russia
• Singapore
• United States

U.S. customers can call toll-free at 1-877-442-2757 or can direct dial 1-312-542-6901. IB's U.S. customer service hours are Mon - Fri, 8 AM-8 PM (EST) and Sun, 3:00 PM - 7:00 PM (EST). Email support is also available here.

Currently, Interactive Brokers is rated 3.3/5 (Average) on Trustpilot out of more than 1,400 customer reviews. On the Better Business Bureau (BBB), IBKR is currently rated A+.  

Is It Worth It?

IBKR is a powerful trading platform and can meet the needs of any trader. Because of its volume-oriented trading structure and powerful trading platform, it is more suited for active traders and those that need lots of tooling for analysis.

People who trade infrequently might find IBKR a little overwhelming and commissions on the higher side. If you want to look at a few alternatives, check out our top brokers list.

Interactive Brokers FAQs

Here are a few of the most common questions that people ask about Interactive Brokers:

What is the minimum deposit for Interactive Brokers?

You can open an IBRK account without making a deposit. However, if you want to take advantage of one of the firm's managed portfolios, you'll need to have a minimum balance of $100.

Does Interactive Brokers charge a monthly fee?

No, IBKR no longer charges monthly fees or inactivity fees on any of its accounts.

Is IBKR good for beginners?

We don't think so. IBKR's platform is unapologetically targeted at experienced traders and could be confusing for new investors.

Does IBKR give bonuses to new clients?

Not without a referral. However, if you were referred by a friend, you could earn up to $1,000 in IBKR shares. Also, existing clients receive $200 per referred friend who opens an account.

Interactive Brokers Features