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Overall

Interactive Brokers comes with a $10,000 minimum funding and is not suitable for casual investors, but provides fantastic support for international trading. It also offers active traders a very competitive commissions schedule for low-cost trading.

Commissions & Fees
Offering of Investments
Platforms & Tools
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By Blain Reinkensmeyer on February 16th, 2016 | Last updated: December 8th, 2016

Dislikes
  • Steep initial investment to open an account
  • Fees charged for inactive accounts
  • Trading platform comes with heavy learning curve
Special Offer Trade on over 100 market centers in 24 countries - Learn More


Interactive Brokers Review

The content portion of this Review was completed on February 17th, 2015 in conjunction with the 2015 Broker Review.

Interactive Brokers (IBKR) is known primarily for two key elements: international investing and highly competitive commission rates. While there are some catches to its competitive commissions offering, which will be broken down in the review below, the broker is worth close consideration.

By presenting a portal through which clients can trade on more than 100 market centers in 24 countries, and deal in stocks, options, ETFs, futures, forex, and bonds, Interactive Brokers has something to offer any seasoned investor who has at least $10,000 ($110,000 for portfolio margin accounts).

Commissions & Fees

All investors want competitive commissions, and active traders are no exception. With this in mind, and because Interactive Brokers caters particularly for hyperactive traders and institutions, keeping commissions low is their No. 1 priority.

Starting with margin rates, Interactive Brokers offers the lowest rates in the industry. Rates vary from 1.60% down to a staggering 1.15% for clients who hold more than $1 million with the brokerage.

New clients should be aware of the miscellaneous fees and minimums with Interactive Brokers. In a nutshell, spend at least $30 in commissions each month and you are in the clear; otherwise, charges for inactivity can reach up to $20 or more. A full breakdown can be found on the Commissions & Fees tab in the navigation menu above this review.

Stock trades run at $.005 per share with the flat-rate structure ($1 minimum). Alternatively, the Cost Plus structure, which starts at $.0035 per share, can be used, but does not cover exchange, regulatory, clearing, and transaction costs. Some math will reveal that for small order sizes, i.e., several hundred shares, Interactive Brokers is a fantastic deal. Trade several thousand shares or more though, and Interactive Brokers quickly becomes pricey.

Options are $.70 per contract with no minimums, and active options traders will enjoy that exercise and assignments that are practically free. 

Interactive BrokersLightspeed TradingTradeStationOptionsHouseSogoTrade
Stock Trade Fee (flat)N/A$4.50$9.99$4.95$5.00
Stock Trade Fee (per share)$0.005$0.006$0.01N/AN/A
Options Base Fee$0.00$0.00$0.00$4.95$5.00
Options Per Contract Fee$0.70$0.60$1.00$0.50$0.50
Commissions & Fees 0/5 4.5/5 3/5 4.5/5 4/5

The only x-factor when trading through Interactive Brokers is that they do internalize options trades. While routing and rebates can be controlled under Cost-Plus pricing and the site claims their smart-order routing consistently achieves aggressive price improvement, we do not have enough data to say whether the quality of executions is actually superior to its competitors.

Customer Service

One noticeable weak spot in Interactive Brokers’ offering is its customer service. During our testing, we found support to be consistently poor, both via phone and email.

During phone testing for this review, we were connected to a rep within one minute several times, one call took several minutes to connect, and another took multiple attempts that ended in failure. Once connected, reps had different levels of experience and courteousness. For example, on only one occasion were we ever asked if we had any further questions before concluding the call.

When it came to email support, the experience was inconsistent. In testing for this year’s review, one of our email tests received a response within an hour, but for two others it took more than two days to receive a response. Responses were also all over the board, with one receiving our highest marks and most of the others being good or just ok.

Additionally, 24-hour support should not be confused with 24/7. Phone support is not available on Saturdays. Furthermore, phone support hours are not 24 hours a day. When we inspected the website, we discovered that the hours of operation depend on your regional location.

Platforms & Tools

The flagship platform Interactive Brokers offers is its Trader Workstation (TWS). The platform is set up to trade everything under the sun, including global assets, and to be used by those with ample market experience. New traders beware: This platform is not built for you. Instead, we recommend using the HTML browser-based IB WebTrader or Mosaic within TWS.

Because Interactive Brokers supports so many investment types and international currencies, the broker had to rethink order and watch list management. What they came up with, which by no means is easy to adjust to, is truly a work of art. The best way to describe it is to think of an Excel workbook. Columns are optional data fields (160 to be exact), and rows can be any security imaginable. Everything streams seamlessly and trades can be made straight from it.

Interactive Brokers watchlist portfolio screen

There is 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 unseasoned investors.

Since TWS is difficult to master, Interactive Brokers began building out Mosaic, a more user-friendly version of Classic TWS. Both can be run at the same time, which can be confusing if you are not used to the platform; however, once you get the hang of it, it isn’t too bad.

Originally, clients could only place simple trades, view charts, have a watch list, and perform other basic actions. Over the years, Interactive Brokers has ported many of the legacy features and functionality over to Mosaic, and today it is nearly 100% standalone.

Interactive Brokers Mosaic watchlists

There is a variety of other TWS tools that are not covered within this review. Algo trading, Options Strategy Lab, Volatility Lab, Risk Navigator, Strategy Scanner, and social sentiment analysis, to name a few, are all available within TWS. The broker is built for trading with a staggering 63 different order types available for clients. While TWS is no thinkorswim by TD Ameritrade or TradeStation, the platform is very impressive in its own right. All data considered, Interactive Brokers earned 4.5 stars for Platforms and Tools.

Interactive Brokers Mosaic charts

Other Notes

Interactive Brokers offers little to no research. The broker does offer a good variety of education, but overall we found it to be just okay.

Mobile trading with Interactive Brokers is mostly an enjoyable experience. On the iPhone app, we did not like the limited technical study options available for charting or the lack of watch list syncing. However, we greatly appreciated the streaming real-time data throughout the app, alongside the extensive order entry capabilities.

Interactive Brokers’ complete offering of investments is fantastic. The range of offerings covers not just trading in market centers around the world, but trading in general, as Interactive Brokers supports equities, options, futures, forex, fixed income, CFDs, futures options, and more. The lone weak spot is in the mutual funds arena as Interactive Brokers makes only 2,771 funds available for purchase (the broker launched a new tool in 2014, Mutual Fund Replicator, to help clients find ETF replacements for any mutual fund they are considering). Regardless, Interactive Brokers earned the No 1 rank for Offering of Investments.

Final Thoughts

With highly competitive commission rates, more than 50 different order types, staggering low margin rates, support for every investment imaginable, trading in more than 100 international markets, and an adaptive trade platform suitable for any pro, Interactive Brokers has quite the offering for investors who fit into its target mold.


Blain Reinkensmeyer

Reviewed by Blain Reinkensmeyer Blain heads research at StockBrokers.com and has been involved in the markets since placing his first stock trade back in 2001. He developed StockBrokers.com's annual review format six years ago which is respected by broker executives as the most thorough in the industry. Currently maintaining funded accounts with more than a dozen different US regulated online brokers, he's executed thousands of trades through his career and enjoys sharing his experiences through his personal blog, StockTrader.com.


Ratings Overall

*Interactive Brokers did not participate in the 2016 Online Broker Review, as a result the following data may not be up to date.

Best in Class

2016

Overall
This broker did not finish Best in Class.
2015
 9

Overall
  • Commissions & Fees
  • Offering of Investments
  • Platforms & Tools
  • Mobile Trading
  • Active Trading
  • Options Trading
2014
13

Overall
  • Commissions & Fees
  • Platforms & Tools
  • Mobile Trading
  • Active Trading
2013
10

Overall
  • Commissions & Fees
  • Mobile Trading
  • Active Trading

Commissions & Fees

*Interactive Brokers did not participate in the 2016 Online Broker Review, as a result the following data may not be up to date.

Commission Notes

To open an account with Interactive Brokers there is a $10,000 minimum ($110,000 min required for portfolio margin). If client does not spend at least $10 in commissions per month they will be charged the difference. Additionally, there is a fee of $10 charged for real-time quotes each month which is waived if atleast $30 in commissions is spent. As of December 1st, 2014, clients are now also required to pay $1.50 per month for NASDAQ, NYSE, and AMEX equities quote data. This $4.50 per month cannot be waived with commission spend. Lastly, Interactive Brokers currently does not pay interest on any positive (free) cash balances for US ($) clients.

Stock Trades - Standard fixed pricing US stock trades run $.005 per share with a minimum of $1.00 and a maximum of 0.5% of trade value. Several examples of how this commission structure is calculated are seen below:

  • 100 shares of a $50 per share stock = 100 x .005 = $1.00 (this trade meets the minimum of $1.00)
  • 1,000 shares of a $50 per share stock = 1000 x .005 = $5.00 (this trade price is the cost of 1,000 shares *.005 per share)
  • 1,000 Shares @ USD 0.50 Share Price = $2.50 (this trade meets the maximum commission of .5% of total trade value, or .5% x $500, and thus does not cost $5.00)

For traders who want are comfortable managing their own routes to minimize exchange costs or maximize exchange rebates, Interactive Brokers also offers a tiered pricing structure. Rates start at $0.0035 per share when trading less than 300,000 shares per month and drop as low as $.0005 per share when trading over 100,000,000 each month.

Broker assisted trades are offered at $.01 per share with a minimum order price of $100. It should also be noted that Interactive Brokers charges inactivity fees if certain commissions thresholds (monthly spend) is not met. For regular accounts if $10 is not spent per month in commissions then the difference will be charged (ie if you spend $5, then $5 would be charged). For those under 25 this minimum is $3 per month. Lastly, for clients with less than $2,000 in portfolio value, the minimum is $20 per month.

Options Trades - For options trades, the standard rates are also tiered. For an investor trading less than 10,000 contract per month having their trades routed using the Interactive Brokers Smart Routed system (default), their are three tiers based on the price of the contract itself. These tiers are broken down below (exchange and regulatory fees may also apply):

  • Contract price less greater than $.10 = $.70 per contract with a $1.00 minimum and no maximum.
  • Contract price less than $.10 but greater than $.05 = $.50 per contract with a $1.00 minimum and no maximum.
  • Contract price less than $.05 = $.25 per contract with a $1.00 minimum and no maximum.

And for options traders who want to directly route their trade options orders, they can do so at a price of $1.00 per contract.

Mutual Funds - Only non-loaded Mutual funds are supported. Each trade costs $14.95. Initial purchase must be atleast $3,000.

Other Investments - Interactive Brokers also offers futures trading (all types), bonds, and forex trading. For more information on these investments please visit the website.




Trade Commissions Breakdown

Stock Trade Fee (flat)* N/A
Stock Trade Fee (per share)* $0.0050
Options Base Fee* $0.00
Options Per Contract Fee* $0.70
Options Exercise Fee $0.00
Options Assignment Fee $0.00
Mutual Fund Trade Fee $14.95
Broker Assisted Trades Fee $30.00
Minimum Deposit $10,000.00

Margin Rates

Under $24,999.99 1.91%
$25,000.00 to 49,999.99 1.91%
$50,000.00 to $99,999.99 1.91%
$100,000.00 to $249,999.99 1.61%
$250,000.00 to $499,999.99 1.61%
$500,000.00 to $999,999.99 1.61%
Above $1,000,000.00 1.41%

Miscellaneous Fees

Bond Trade Fee $5.00
Treasury Trade Fee $5.00
IRA Annual Fee $30.00
IRA Closure Fee $0.00
Returned ACH Fee N/A
Returned Wire Fee N/A
Stock Certificate Processing Fee N/A
Stock Certificate Delivery Fee N/A
Paper Statement Fee N/A
Paper Confirmation Fee N/A
Domestic Wire Fee $10.00
International Wire Fee $10.00


Account Features

*Interactive Brokers did not participate in the 2016 Online Broker Review, as a result the following data may not be up to date.

Offering of Investments

Advisor Services help
No
Bonds (Corporate) help
Yes
Bonds (Municipal) help
Yes
Bonds (US Treasury) help
Yes
CDs help
No
Clearing Firm help
Self-clearing
Commission Free ETFs help
33
Direct Market Routing - Stocks help
Yes
Direct Market Routing - Options help
Yes
DRIPs help
Yes
# of Easy to Borrow Stocks help
4500
Forex Trading help
Yes
Futures Trading help
Yes
Member FINRA help
Yes
Member SIPC help
Yes
Mutual Funds help
Yes
Mutual Funds (Load) help
2184
Mutual Funds (No Load) help
5823
Mutual Funds (NTF) help
2912
Mutual Funds (Total) help
8026
Mutual Funds Phone Trades help
No
Mutual Funds Web Trades help
Yes
No Fee IRAs help
No
No Inactivity Fees help
No
No Minimum Deposit help
No
Options Exercising (Phone) help
No
Options Exercising (Web) help
Yes
Options Trading help
Yes
Options Trading (Mini) help
Yes
Options Trading (Weekly) help
Yes
OTCBB / Pink Sheets help
Yes
Stock Trading help
Yes

Customer Service

Phone Support help
Yes
Email Support help
Yes
Live Chat (Current Clients) help
Yes
24/7 Support help
No

Platforms & Tools

Desktop Platform (Windows) help
Yes
Desktop Platform (Mac) help
Yes
Web Platform help
Yes
Active Trading Platform help
Trader Workstation (TWS)
Auto Investing help
Yes
Charting - Display Corporate Events help
Yes
Charting - Drawing Tools help
9
Charting - Notes help
Yes
Heat Mapping help
No
Ladder Trading help
Yes
Level 2 Quotes - Stocks help
Yes
Level 2 Quotes - Options help
Yes
Option Chains - Streaming Real-time help
Yes
Option Analysis - P&L Charts help
Yes
Stock Alerts Delivery - Email help
Yes
Stock Alerts Delivery - Sound help
Yes
Stock Alerts Delivery - Text SMS help
Yes
Streaming Time & Sales help
Yes
Streaming TV help
Yes
Trade Hot Keys help
Yes
Virtual Trading help
Yes
Watch Lists - Streaming Real-time Quotes help
Yes

Research

Research - ETFs help
Yes
Research - Mutual Funds help
No
Research - Pink Sheets / OTCBB help
Yes
Research - Fixed Income help
No
Equity Research - Research Reports help
0
ETF Research - Top 10 Holdings help
Yes
ETF Research - Morningstar Style Box help
No
ETF Research - Research Reports help
Yes
Mutual Fund Research - Research Reports help
No
Mutual Fund Research - Fees Breakdown help
No
Mutual Fund Research - Performance Analysis help
No
Mutual Fund Research - Top 10 Holdings help
No
Screener - Stocks help
Yes
Screener - ETFs help
Yes
Screener - Mutual Funds help
No
Screener - Options help
Yes
Screener - Bonds help
Yes

Education

Has Education - Stocks help
Yes
Has Education - ETFs help
No
Has Education - Options help
Yes
Has Education - Mutual Funds help
No
Has Education - Fixed Income help
No
Has Education - Retirement help
No
Investor Dictionary help
Yes
Client Webinars help
Yes
Live Seminars help
No
Videos help
Yes
Retirement Calculator help
No
Community Forums help
Yes

Mobile Trading

iPhone App help
Yes
iPad App help
Yes
Apple Watch App help
Yes
Android App help
Yes
Android Tablet App help
Yes
Mobile Site help
Yes
Quotes (Real-time) help
Yes
Quotes (Streaming Real-time) help
Yes
Watch List Syncing help
Yes
Market Movers (Top Gainers) help
Yes
Stock Alerts Delivery - Push Notifications help
No
Customizable Homescreen help
No
Stream Live TV help
No
Trading - Stocks help
Yes
Trading - Stocks (After-Hours) help
Yes
Trading - Simple Options help
Yes
Trading - Complex Options help
Yes

Banking

Member FDIC help
No
Checking Accounts help
No
Savings Accounts help
No
Debit Cards help
No
Credit Cards help
No
Mortgage Loans help
No
Mobile Check Deposit help
No
ATM Fee Reimbursement help
No
No Fee Banking help
No
Retail Locations help
0

Active Trading

Receives Payment for Order Flow (Equities) help
No
Client Liquidity Rebates help
Yes
Financial Information Forum (FIF) Participant help
No

Compare Interactive Brokers

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All pricing data was obtained from a published web site as of 2/16/2016 and is believed to be accurate, but is not guaranteed. The StockBrokers.com staff is constantly working with its online broker representatives to obtain the latest pricing data. If you believe any data listed above is inaccurate, please contact us using the link at the bottom of this page. For stock trade rates, advertised pricing is for a standard order size of 500 shares of stock priced at $30 per share. For options orders, an options regulatory fee per contract may apply.




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