Founded nearly 40 years ago, Interactive Brokers IBKR is known for its industry-leading commissions schedule, margin rates, and support for international trading. With its core clientele being professional traders and institutions, providing the lowest commissions schedule available is critical for Interactive Brokers. In our rigorous assessment, they deliver without question.
First, it is important to note that Interactive Brokers does not accept payment for order flow, a key element in providing quality order execution. In our assessment of order execution for the Review, the broker came second behind Fidelity. For more, see our guide to order execution. Overall, Interactive Brokers unquestionably reigns supreme in the category of commissions and fees. Interactive Brokers also leads the industry with the lowest margin rates, which vary from 1. Some math will reveal that for small order sizes, i.
Trade several thousand shares or more though, and Interactive Brokers quickly becomes pricey. Like tiered equity trades, per contract fees tier down as total shares traded increases. New and casual investors should be aware of the miscellaneous fees and minimums charged by Interactive Brokers.
While far lower than the minimum spend required at say Lightspeed, it is still something to keep in mind. The platform is set up to trade everything under the sun, including global assets, and is designed to be used by traders with ample market experience.
The default experience is called Mosaic, while clients also have access to view what is called Classic TWS the original version of the platform. Because Interactive Brokers supports so many asset classes, it had to rethink its position and watch list management. What they came up with, which takes some getting used to, is extremely efficient.
Type in any stock symbol and you will see a summary of available securities. Watch lists can include anything from equities to individual options contracts, futures, forex, warrants, you name it. I preferred the Mosaic view, although I know many long-term clients prefer the Classic view. Watch lists can have up to different columns, and to say they are fully customizable is truly an understatement.
No broker offers an experience like TWS. Beyond learning how to effectively build watch lists, I found only one usability disadvantage that comes from supporting so many investment types, and that is pulling up quotes or trading securities. Even typing in AAPL for Apple yields a slew of possible matches, which can be overwhelming for non-professionals.
Turning to charting, technical traders will find nearly everything they need. One hundred and twenty four different studies are available to be added to any chart, and customizations cover every possible option. Note though, while option indicators are impressive, TWS still trails the and offered by TradeStation and TD Ameritrade thinkorswim , respectively.
Out of all the tools on TWS, I found the charts to have the most user-friendly interface. Considering the depth of functionality, I was surprised to find only eight tools for mark ups. While the basics are present — trendlines, notes, zooming, Fibonacci, etc. Pickiness aside, the charts on TWS have all the core functionality required to succeed: There is no question TWS is built for professional trading as there are, for example, a staggering 63 different order types available for clients to use, by far the most in the industry.
Alongside charts, TWS is also home to a variety of other tools not covered in this review. After assessing TWS across 58 individual variables, the platform easily ranked among the best in the industry.
Certain tools, such as charting, lack depth compared to those the top-ranked platforms use; however, overall, TWS delivers. Lastly, for clients traveling without access to their desktops, or for clients looking to simply monitor their portfolio, place trades, and view watch lists, IB WebTrader is a good solution.
After loading WebTrader, I found a detailed summary of my portfolio balances and margin requirements alongside a full spectrum order ticket. When I say full spectrum, I mean trading for all asset classes is supported. The only limitations are algo orders and other advanced order types. Pulling quotes will provide only a basic high-level summary, an extremely rudimentary chart I recommend be avoided altogether, and an option chain. Basic stock screening is also present alongside a high-level international market summary tab, Market Pulse.
Customizations are essentially non-existent throughout, although streaming real-time quotes are found throughout, which is essential. Bottom line, the focus of WebTrader is to monitor portfolios and manage orders; it is not designed to be used as a standalone. It accomplishes these functions well. Being a professional trader-focused brokerage, Interactive Brokers is not known for its research offering. Bundled with the platform clients will find what they need to conduct mostly thorough research for stocks, decent research for ETFs, and little to no research for Mutual Funds.
That said, Interactive Brokers does offer a variety of third-party provider feeds a la carte, including Morningstar, which are available for a monthly fee. Mobile trading with Interactive Brokers is mostly an enjoyable experience. When testing the iPhone app, I found the app had everything I needed to trade effectively. From lightning quick streaming data to full-featured order entry and portfolio management, all the main criteria were quickly checked off. The drawbacks with the experience center around usability.
For example, the charts have 68 different optional studies, which is great, but the charts are not flexible. You also cannot perform ACH account transfers within the app.
As stated previously, mobile trading with Interactive Brokers is well supported across all devices and has the core functionality required by traders to go about their business and trade effectively. During testing for our Review, we found support to be consistently poor regardless of the channel being used: The broker placed 15th out of 16 brokers we tested.
Hedge funds, research and technology providers, administrative service providers, and the like are all included. With industry-leading commission rates, more than 50 different order types, staggering low margin rates, support for every investment imaginable, trading in more than international markets, and a robust trade platform suitable for any professional, Interactive Brokers is a great choice for investors who fit into its target mold.
For our Stock Broker Review we assessed, rated, and ranked sixteen different online brokers over a period of six months. In total, we conducted customer service tests, collected 5, data points, and produced over 40, words of research.
Blain currently maintains funded accounts with more than a dozen different US-regulated online brokers and has executed thousands of trades throughout his career.
He enjoys sharing his experiences through his personal blog, StockTrader. If you believe any data listed above is inaccurate, please contact us using the link at the bottom of this page.
For options orders, an options regulatory fee per contract may apply. Open an account today. Likes Leader in access to international markets as well as investment offerings Lowest trade commissions and margin rates in the industry Endless order types for professionals. Dislikes Steep minimum deposit to open an account Fees charged for inactive accounts Poor customer service.