New Interactive Brokers review – 2021 Update
Comprehensive service by Interactive Brokers (IBKR) allows access to more than 100 financial centers in 24 different countries, trading in commodities, forex, futures, options, ETFs, bonds and CFDs. This analysis will look at their whole bundle, including trading fees, Webtrader website, mobile applications, customer support and more.
Quick History Overview
The IB group was formed more than 40 years ago by Thomas Peterffy, the chairman and CEO. It all started when he acquired a seat on the American Stock Exchange in 1977. This helped him to trade in equity options as an individual market maker.
IBKR had a lot of names – TP & CO and Timber Hill Inc. for example. Interactive Brokers Inc was the established choice though by 1993.
Today the organization is at the forefront of the industry in terms of profits, margin rates and openness for foreign trade. Its equity capital of $6 billion reflects both its performance and its far-ranging impact.
IB also has worldwide office sites, including Canada, India, Hong Kong, Japan and the UK.
Minimum Initial Deposit
If you have downloaded an account and your login details are provided to you, you will need to finance your account before you can start reviewbrokers.online. Individual accounts, Trading Group Masters, and Broker Masters all require a deposit of $10,000 USD.
There are however some exceptions to this rule:
- If you are aged under 25, you only have to make a $3,000 deposit.
- Indian residents and account holders must deposit 100,000 INR.
- Non-resident Indians with an IB India account have to deposit 500,000 INR.
- Indian residents with an IB US account and IRAs have to make a $5,000 deposit.
Generally, this minimum price is more than normal industry standards. It can discourage beginners with minimal personal resources.
Commissions & Spreads
Forex spreads and other similar fees at Interactive are competitive with respect to cost ratings. That is because the majority of customers of the company are skilled traders and institutions. So, it is important to have low commission rates.
You should expect a flat, fixed commission rate of $0.005 for all goods, with a minimum of $1.00 on products and comparative prices. This includes stocks, stock futures, futures options, CFDs and forex bonds.
Interactive Brokers Leverage
IBKR also ranks highly in terms of leverage over eTrade, Thinkorswim, Tradestation, Oanda, Scottrade and other rivals. In addition, initial margin rates for those who have accounts of over $1 million can be anywhere from 1.41 per cent to 1.91 per cent.
However, while futures and margin options trading can increase your buying power, it can also make losses bigger. Such loans will easily see traders losing their entire account balance unless handled with care.
Other Trading Fees
There are a variety of other expenses and fees that you must be aware of before signing up. For example, accounts with less than $100,000 must reach a minimum of $10 per month in commission. If not, the difference would be chargeable by the company. When you hold an account with a balance of $2,000 or less, you are expected to meet a minimum of $20 of trade commissions.
Luckily, in monthly trade commissions, consumers who are 25 and under must reach a minimum quote of only $3.00.
Generally, for all but the most involved traders, minimum transaction fees are small. Yet despite being above the market average, their operation fees remain considerably smaller than, for example, Lightspeed’s offerings.
IB imposes an advertising fee on a subset of clients with high-risk margins. That is to make up for running those risky accounts. The deductible sum is determined using patented algorithms and may depend on the individual circumstances.
To main attraction is the Trader Workstation (TWS). It can be used to exchange a large array of instruments, from ETFs and futures items to cryptocurrencies like Ethereum, for example. It’s open to users on Mac, Windows, and Linux.
When you have completed installing the Workstation, the default Mosaic configuration will be the next thing you encounter. Users can however also use the Classic TWS, which is the platform’s original version.
You get all of the critical features. So, backtesting and setting limits for trailing stops come as normal. Earnings schedules are also readily available.
They’ve implemented a simple approach to making watch list management transparent while providing a vast number of asset classes. You have to type in any stock symbol and you will see a list of available securities. The watch lists will contain a number of items. You may potentially have a maximum of 338 different columns. This means IB is leading the way in terms of customizability with its platform.
The only drawback is you might get lost in a long list of quotes or securities in real-time. Search AAPL for Apple, for instance, and you will have to make your way through a variety of potential matches.
The platform is doing relatively well in regard to charting. To add to any chart you have 124 different studies available. But TradeStation provides 270, while 370 is the number you get from TD Ameritrade. Another downside comes in just eight markup resources available. You have the basics, such as trendlines, notes, and Fibonacci, but there are incomplete lines of resistance and channels.
Still, for most traders, charting on TWS is user-friendly and has ample customizability. Historical trades, warnings, and index overlays are all available as well.
You’ll also benefit from an amazing 63 different types of orders.
Additionally, the Options Strategy Lab allows you to build and submit simple and complex multiple options orders. Additionally, you can match up to five strategies of choice at any time. Volatility Lab and trading with Algo are both available.
Also worthy of note is Mutual Fund / ETD Replicator. This lets you find alternatives to mutual funds for the lower cost of ETF. This all ties in with their method of making available as many instruments and markets as possible.
IBKR does not directly support the MT4 or 5 platforms. They want to encourage the launch of their tailor-made TWS application, as you might imagine, so you won’t get too much support from them in integrating your MetaTrader app with their offering. Fortunately, some 3rd party apps exist which can help bridge the platforms.
Overall, the trading platform is a sensible option for experienced traders. The range of powerful tools, watchlists and customizable account dashboards all make it a user-friendly and effective platform. The risk analysis and technological resources add to the extensive offer.
The Trader Workstation can however overwhelm beginners. Instead, they may want to consider their IB WebTrader or the smartphone app. The former is a more simple browser trading site to use.
IB offers applications for iPhone and Android. They are also tablet-friendly. The interface utilizes Key technologies, and as an extra security measure, you need to insert a PIN or swipe. Two-factor login with Touch ID is allowed but you need a second key app instead of only logging Touch ID into the actual device when you load it.
Overall, consumer ratings and feedback prove much of the mobile application is good. All you need to trade easily is provided you including:
- Order history
- Historical tick data
- Portfolio management
- Full-featured order entry
- Fast live data and quotes
- Stop losses
Furthermore, balance sheets, margins, and market prices are easy to get. Some people also tend to use smartphone apps when it comes to charts. You get the same set of indicators but with a more modern interface. The downside to the charting capacities is that the charts are not versatile even with 68 separate optional studies.
There are, sadly, a variety of other drawbacks. You don’t get access to complex devices or location-specific interfaces, like FX Trader. Additionally, your desktop shuts down automatically when you sign in to the Mobile App. This is frustrating if you want to track the marketplace when wanting to move around just a bit.
Furthermore, placing sophisticated types of orders will prove challenging. You can’t configure the home screen or watch live TV, either. In addition, you can only set simple stock updates without push notifications.
Ultimately, the smartphone apps complement the desktop-based version accordingly. Custom screening and post-hour charting in their smartphone apps are two features few in the industry give. However, as iPad application reviews illustrate, apps are not detailed and may be better used for desktop trading support only.
There are two methods for making deposits. These are deposits that effectively pass notifications of capital and deposits.
The latter helps IB to classify incoming funds to your account for proper credit, while also ensuring that the funds maintain their original denominational currency.
When the deposit notice has been completed, specific guidance will be received about where and how to transfer the funds. Note directions will be customized to match your position and fund form.
Notice of deposit does not move your money. You will contact your bank or broker to do that so they can complete the transfer.
IB embraces wire and SEPA (Single Euro Payments Area) as forms of withdrawal. Your bank can charge a wire transfer fee. Once you open an account, the wire instructions will be forwarded.
There are withdrawal limits to be mindful of while using a safe login system. For example, you are limited to a maximum $50,000 withdrawal per day, plus a maximum $100,000 withdrawal within five business days.
There will be no fee per calendar month for the first withdrawal. Withdrawal fees from the website will be paid on all future withdrawals, however. The number will depend on your position but it’s about €8 at the moment.
When you want to obtain funds in an alternate currency to your base currency into your account, the exchange rates are the same as the conversion rates for forex trading.
Also, there are debit, credit card, and Mastercard payment features.
There are many forms of accounts available at IB, including:
- Cash accounts – These can only be used for joining long stock positions, long option positions and short covered positions.
- Margin accounts – You can purchase margin protection. This means you have the right to short security positions, futures positions and naked options.
- Margin portfolio accounts – These allow you to take the same positions as normal margin accounts. They therefore use an alternate approach to measure criteria for margins. These conditions also mean that consumers will benefit from greater flexibility, but you’ll need a $100,000 minimum account balance. Moreover, foreign accounts may not be eligible, because this form of account restricts international trading to a certain point.
There is also the possibility of a Universal Account. Universal account reviews indicate users are impressed by the extensive list of available instruments. They really like that you can trade around the world, making sure you don’t have to open different accounts in, for example, Canada, Australia, India or Singapore.
So, more than one account is available, plus you have the option to open another account. It is therefore worth noting that related accounts can have to meet additional requirements.
Interactive Brokers Demo Accounts
You do get access to an account/trial account. A free trial allows for unrestricted simulated trading in which actual money is not to be lost. You will familiarize yourself with the markets here, and develop an effective plan. It’s a perfect way to test drive their trading site, too.
Then you can move to a Live Trading account when your confidence has evolved. To download the app you only need some contact info and follow the on-screen instructions.
Reviews on demo accounts were really good. Once you’ve signed in, you’ll find access to a multitude of trading devices and financial instruments, while fast and simple customizing is available.
In addition to the standard features described above, there is a range of useful additional services which make up the Interactive Offer. Some of the most favorable ones include:
- iBot – This is both a voice and text-based trading interface. It has a strong understanding of basic commands in English. The add-on is accesible for TWS appson both desktops and phones.
- WebTrader – This is a trading platform focused on the web. It provides many of the same functions that the current desktop edition has. You are getting an intuitive interface, too. With a firewall, protection is assured, as is a variety of other security protocols.
- Risk Navigator – This provides a comprehensive risk management tool for the portfolio. One obvious benefit is that identifying secret exposures is easy. A number of studies use real-time data to provide a current overview of threats from a range of different angles.
- Mosaic Market Scanner – It scans markets easily according to customisable numerical parameters.
- Probability Analysis – This can be used to understand options markets.
- Zacks Research – You can access this through the TWS interface. You will find research, review and recommendations of the highest quality there.
- Traders’ Perspective – This tool is useful and shows daily articles via email subscriptions or through the website. The knowledge can help users make educated decisions about the trade.
- Internet Sentiment – It allows access to a variety of online ticker debates and analysis. All of this will help get a better image of where the prices will go.
These are some great things traders will get their hands on. Most of the above-mentioned can however need an extra charge, depending on the type of account you hold.
License & Regulation
When you first fund a trading brokerage account, it’s important that you ensure the broker is properly supervised. In a variety of cases, this will safeguard your money, because your broker is obligated to stick to those laws and regulations.
IBKR LLC is governed by the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the New York Stock Exchange and the Financial Conduct Authority. A number of other regulatory bodies around the world are also overseeing this.
The brand stands out from its rivals for a variety of reasons. Including:
- They offer a free trial account.
- You can choose between a long list of types of orders.
- You get access to powerful, secure smartphone apps.
- Competitive pricing, as forex spreads feedbacks suggest.
- You have a consistent stream of real-time market data, which never goes offline.
- Competitive commissions and margin rates favor consumers, plus fixed tiered pricing.
- Direct market access including the index FTSE 100, the Cac 40 and the DAX 30 for Germany.
- Whether you’re from the States, Europe, Australia, New Zealand or Singapore, they’re quite available.
- Reviews for the charts and data feed are very good. Users are offered both preference and comprehensive customisation.
- The API Python is of high quality and facilitates algorithmic strategies as well as automated trading. Tutorials for the Python API can be easily found online.
- Thanks to sophisticated order routing technology, Interactive Brokers promise extremely fast execution speeds.
- You can transact from several types of account, including IRA, single registered, Joint.
- Trading platform Trader Workstation is reliable and comes with a whole range of tools.
- You have to select from a wide array of markets and instruments, including penny stocks, international stocks, and gold futures. You can also buy some in bitcoin (BTC) and bitcoin futures.
- A robust educational and research center with a range of videos, webinars and tutorials to help you get to grips with the program is available.
- Requirements for setting up new accounts are small, and incentives are sometimes available to attract new users.
There are also some significant downsides to using IB given the number of benefits listed above. Including:
- While opening an account you should expect a high minimum.
- Steep inactivity charges apply.
- Although daytime margin trading can boost profits, if not carefully used it can also increase losses.
- Pretty poor customer service. If the website goes down or you have a question about your account, you may be waiting a while.
- This firm can be more costly for active traders who exchange over $100,000 shares a day because of the pricing structure.
- In terms of technical charting the TWS platform falls short.
- While they do provide hundreds of analytical resources, some consumers may choose to use third-party products that can arrange the required information more effectively.
Depending on which instrument you want to exchange, trading hours are relatively industry standard. Head over to their official website where you can find a list of the periods of trading for where you are located.
Furthermore, there is also extended and after-hours trading. This means traders will always have the ability to capitalize on market conditions even with minimal time or on inflexible schedules.
Interactive Brokers Customer Support
The business is falling short in terms of customer service as described above. Although they give a live help chat, a telephone line, and email support, user reviews indicate that they’re all relatively slim.
When you have any security problems, such as resets or security tokens, you will use their telephone contact number, which can be found on their website. Telephone connectivity is available 24 hours a day but the service switches overnight to international locations, making contact more difficult.
On live chat, you can expect industry-standard wait times to come in, plus the occasional outage.
That said, it must be noted that this isn’t just bad news. The customer service staff know the TWS program extremely well. They’re even able to talk you through all their items. They will also assist you in monitoring your account status, closing your account and helping you move funds.
Luckily, chat rooms and forum workers are fairly quick to address issues. They will let you know about new account promotions, as well as teach you how to move to a margin account. You’ll also be pointed to helpful user guides and analysis. Not to mention, they have guidance on how to interpret interest rates or the recent history of trade.
Verdict on Support
Overall there are a variety of easy ways to contact IB. However, waiting times are long relative to the rivals, and service quality is often lacking.
Customer service reports have shown, however, that support staff has fairly good technical skills. If your account doesn’t work, they will support you with error codes, forgotten passwords and a variety of issues.
Nonetheless, if you are looking for fast and efficient customer service, you may want to look elsewhere.
Safety & Security
You get a high degree of security and safety as the exchanges go. This is because of their authentication with two factors.
For starters, your username and password will be needed. A physical token is then needed to log in to the account. This comes in the form of a small numbered card which will be mailed to your home. You’ll need to activate it and use it every time you log in.
Alternatively, you can choose to encrypt connections using normal SSL encryption.
Truth be told, keeping track of and using the actual token can feel a bit of a hassle each time. Yet that will keep hackers from accessing your account, even though they have your username and password in their possession.
Eventually, there are limits on the movement of funds that will avoid someone withdrawing money from your account without your authorization.
IB Final Verdict
The fact that IB comes with a daunting minimum deposit of $10,000 and a relatively weak quality of customer service is not avoidable. As a consequence, it may not be expected to make the shortlist for beginners and casual traders. Nevertheless, the organization does promote genuinely global trade and offers incredibly low fees and large spreads. Not to mention, you can easily switch from one screen between forex, futures, options, and CFDs, while using their powerful trading platform to match your needs.
Thus, Interactive Brokers is potentially better suited overall for seasoned traders with significant resources.
Interactive Brokers only accepts US and Canadian traders.