- Great global asset coverage and availability (100+ markets)
- Very low fees and margin rates
- No proprietary trading, no risk of default
- Good mobile offering and versatile trading platforms
- API integration, automated trading options,
- $10,000 minimum capital ($5000 for US IRA accounts)
- User Interface not the easiest
- Customer support issues
- No social or copy trading
- Relatively low leverage allowance
- Large one-time orders are cheaper elsewhere
There is no broker matching the offering of IB, with stocks (24 countries), bonds, indices, forex, options, futures, mutual funds, warrants, turbos and everything else in the traditional asset classes being available. In one platform with a searchable quote list, you can access all products very quickly. Also, ever since (10+ years) I have been following the company, they have been constantalbeitbeit slowly) adding new markets and products.
We recommend Interactive Brokers for all active, cross asset class traders who are willing to spend the time to set up the trading platform and customize the User Interface. The service is available in most countries of the world, with access to a wealth of asset classes and a wide range of countries. Prices in every dimension are very low, although they do charge a $10 “inactivity fee”. That might seem steep, but if you hold any margin positions, the very low margin rates will make IB the cheapest choice in no time for investors with large value positions as well. Compared to retail forex (IB offers ICN forex trading) and some full-service stock brokers trading fees are simply stunning. This means that with retail brokers you might be paying several times more for margin positions than with IB, but other discount brokers are also trailing the company.
Beginners and investors with a lower budget should look elsewhere, although we have to note that having a UI that is not optimized to “urge” trading is not a definite disadvantage. Sadly it is true that with brokers as well that if you are not wealthy you cannot afford a bad product or service.Customer support could be erratic, but your money is safe with IB and usually, all issues are solved; just you need to push them a little bit.
IB accepts clients from practically every country in the world, and although applying for an account is not as easy as with some other brokers, active traders will make the hassle up very quickly with the low fees. Want to invest in less known markets and assets? You have it all here, with full access to all major global marketplaces.
The Trader WorkStation (TWS) is the main desktop platform of the broker, with great versatility, lots of order types quick access to all markets and asset classes, but with a relatively high level of resource need, and a steep learning curve and way too many options for the beginner trader.
Mobile trading is great and reliable on all platforms, although charting is not perfect and some functions are dearly missed from the desktop version. There is also the fully functional WebTrader for the occasional on-the-road trade. Through its great API you are able to connect all kinds of trading and charting software, algorithmic systems, or other third-party applications. Two-factor authentication is available on all platforms, and safety functions are generally at a high level across the applications.
There is also a very helpful and perfectly functional Simulated Trading account, where you can get to know the user interface the different order types (with even simulated deep order book trading) and practice your strategies without limitations.
Analysis tools are great, with only some special ed (TradeStation, Optionshouse) brokers beating the company in some
Where IB is lacking, is the in-house research tools and the access to mutual funds and other investment options. Don’t get us wrong, those are all there, but other (non-discount) brokers make it a lot easier to access information and invest in third-party funds. Again, if you have your information sources or you are willing to pay up for an outside provider- which a serious investor would do eventually- these are non-issues. That said, it is fair to say that the system is not geared towards beginners.
With all the limitations and issues in mind, Interactive Brokers is not for everyone, but above an intermediate level, and for a global approach it’s hard to find a better choice. With over 40 years of history, the company is here to stay, and as it doesn’t conduct trading on its own account, your funds are secure, and “blowing up” is not a realistic risk for the firm.
What’s your experience with the company? Did you have any issues with the service or did we miss something vital? Let us know in the comment section. We will focus on forex-brokers int he next part of our review series.
Featured images form Shutterstock and company website.