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Click here for a full list of our partners and an in-depth explanation on how we get paid. First one, then another and then another dropped trading fees altogether, sending the industry into a tailspin. The earliest adopters reaped the rewards of increased share value and trader interest.
While changes in fee structure have significantly shaken the financial services industry, IBKR has remained a leading global platform for trading a wide variety of assets. Does that mean IBKR is the right platform for you? Investor Warning: The risk of loss in trading with Interactive Brokers, whether it is with stocks, options, futures, forex, foreign equities, and fixed income, can be substantial. Options involve risk and are not suitable for all investors. Trading on margin is only for sophisticated investors with high risk tolerance.
You may lose more than your initial investment. Security futures involve a high degree of risk and are not suitable for all investors. The amount you may lose may be greater than your initial investment. Structured products and fixed income products such as bonds are complex products that are more risky and are not suitable for all investors. In the late 70s and early 80s, the company was a securities dealer with a more traditional approach. However, Thomas Peterffy, the founder, and CEO at the time, came up with the first fully automatic algorithmic system for submitting and creating market orders in Less than a decade later, in , Interactive Brokers had turned into a fully-fledged E-trading platform.
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The company averages about 1. It offers three basic tiers:. Historically speaking, Interactive Brokers has always been an industry leader. In , Timber Hill began developing a digital tool to trade stocks and options. In , that tool launched online and became the first true digital algorithm — an automated trading system that works live across multiple platforms.
In , Interactive Brokers was registered and has run alongside until Timber Hill, until Timber Hill was sold a couple of years ago.
Currency Trading
The company also rolls out special incentives to younger traders aged 25 and younger. IBKR Pro is intended for advanced traders. If you are a beginner you might find this platform overwhelming, as many do. Trading forex and options has historically been regulation-intensive. This is more the case in some regions than in others. The website states that IBKR has clients in countries and territories across the globe. Interactive Brokers offers forex trading options in four global marketplaces , as outlined below. The company is chartered as a global e-trading platform accessible to users around the world.
Currently Interactive Brokers is available for use in countries. Any individual or entity applying to become an ECP must meet one of two conditions :. Margin rates: Margin traders will also benefit from the low rates at Interactive Brokers.
The broker charges a blended rate based on the size of the margin loan, and has a calculator on its website to help investors quickly do the math based on their balance. Interactive Brokers also offers an integrated cash management feature, which allows investors to borrow against their accounts with a debit Mastercard, also at low interest rates.
Fractional shares: The ability to purchase a portion of a company's stock, rather than a full-priced share, makes it easier to invest in companies that have lofty share prices. That, in turn, makes it easier to maintain a diversified portfolio, especially for investors with smaller accounts.
Interactive Brokers
The platform is fast and includes standard features such as real-time monitoring, alerts, watchlists and a customizable account dashboard. An options strategy lab lets you create and submit both simple and complex multileg options orders and compare up to five options strategies at one time.
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Other tools include a volatility lab, advanced charting, heat maps of sector and stock symbol performance, paper trading and a mutual fund replicator, which helps users identify ETFs that replicate the performance of a selected mutual fund but offer lower fees. Worth noting: Another broker we review, Zacks Trade , offers its customers access to white-labeled versions of Trader Workstation.
Zacks Trade charges higher trade commissions, but offers clients free calls with support reps, who are licensed brokers. It's an option worth considering for traders who want the power of Interactive Brokers' trading platforms alongside a bit more personal support. Socially responsible investing: For investors looking to trade with a conscience, Interactive Brokers recently unveiled its Impact Dashboard, free to all users on Trader Workstation, the Client Portal or mobile apps. The dashboard allows investors to select their personal investment criteria from 13 principles including clean air and water, LGBTQ inclusion and gender equality.
Investors can also exclude investments based on 10 categories, such as animal testing, corporate political spending and lobbying, and hazardous waste production. Mobile app: The IBKR mobile app, available to both Lite and Pro customers, is Trader Workstation on the go, with advanced trading shortcuts, over data columns, option exercise and spread templates, news, research, charting and scanners.
Users can create order presets, which prefill order tickets for fast entry. Presets set up on Trader Workstation are also available from the mobile app.
Research: Interactive Brokers provides access to a huge selection of research providers and news services, many for free, including Fundamentals Explorer, which offers fundamentals data from Thomson Reuters on over 30, companies, plus more than 5, analyst ratings, and reports and newswires from 82 companies. Over additional providers are also available by subscription. Investment selection: Interactive Brokers offers something for everyone here: Advanced traders will love the huge selection of products, from standard offerings of stocks, options and ETFs to precious metals, forex, warrants and futures.
The retirement-investor set will be happy with the broker's impressive list of no-transaction-fee mutual funds — over 8, in all — and respectable selection of 96 commission-free ETFs and Lite customers get to trade all U. Interactive Brokers also has a robo-advisor offering, Interactive Advisors, which charges management fees ranging from 0. The management fees and account minimums vary by portfolio.
Open to international investors: While many brokerages are only open to U. As noted above, Interactive brokers opens the door to investing on exchanges in 33 countries, and lets clients fund and trade accounts in 23 currencies.
IB Forex CFDs - Facts and Q&A | IB Knowledge Base
Research summary: Interactive Brokers will satisfy the vast majority of traders, you just have to know where to look. Lastly, content from in-house and guest authors can be found on the Traders' Insight blog. Forex research: Interactive Brokers has forex research from among its in-house and third-party resources. Given that the majority of research resources available to customers is specific to other global financial markets, I did find it time-consuming to find content related to forex specifically.
Interactive Brokers offers a variety of quality educational content; unfortunately, the primary focus is not forex and CFDs. Created by in-house staff and third-party educators, I found the content plentiful, diverse, and of high quality.
Individual or Joint Accounts
For example, the Traders' Academy portal covers broader financial market sectors quite well with lessons and accompanying videos organized by experience level. The downside? There is not a course specific to forex trading. Educational videos: Given how complex TWS is, I was not surprised to find that most videos were platform tutorials. Outside of its website, Interactive Brokers has a YouTube channel.
Regulation and Security
Platform tutorials aside, I found very few videos about forex and CFDs, despite a larger variety of content related to other asset classes. While customizing IBKR Mobile for forex trading takes a little time, Interactive Brokers offers a robust trading experience that competes among the industry's best multi-asset brokers.
Forex-specific features: I found an extensive list of pre-defined watch lists, including two for forex. Also, the economic calendar can be configured to only show economic events relevant to forex traders.