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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 30th, 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 ("US Securities and Futures Value Bundle") which is waived if at least $30 in commissions is spent. Interactive Brokers is one of few in the industry that does not receive payment for order flow for equity trades, a known factor in order execution quality.

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 shares each month.

Broker assisted trades are offered at $.01 per share with a minimum order price of $100.

Options Trades - For options trades, the standard rates are also tiered. For an investor trading less than 10,000 contracts per month having their trades routed using the Interactive Brokers Smart Routed system (default), there 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 no load 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), forex, bonds, and CFDs.




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 No
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 - 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

Select one or more of these brokers to compare against Interactive Brokers.

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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