Interactive Brokers Review
In 2022, Interactive Brokers remains our top pick for professionals because of its institutional-grade desktop trading platform and rock-bottom margin rates. Professionals aside, Interactive Brokers also appeals to active traders and casual investors with $0 trades and a user-friendly web platform.
Top Takeaways for 2022
After spending three months testing 15 of the best online brokers for our 12th Annual Review, here are our top findings on Interactive Brokers:
- Interactive Brokers, or IBKR, is best known for offering traders access to global markets — some 135 market centers in 33 countries. Additionally, professionals can take advantage of industry-leading commissions, including the lowest margin rates across all balance tiers.
- Interactive Brokers is a winner for day trading, mobile trading, options trading, futures trading and professional trading go. For example, Interactive Brokers offers a staggering 68 different order types.
- Despite clear progress made in simplifying its website for casual investors, including more robust fundamental research and education, Interactive Brokers underperforms the best brokers for beginners. That said, Interactive Brokers still finished Best in Class across six categories in 2022.
|Commissions & Fees|
|Platforms & Tools|
|Mobile Trading Apps|
|Offering of Investments|
|Ease of Use|
Offering of investments
Interactive Brokers provides the most diverse offering in the industry and leads by a wide margin in multiple areas, including international trading. Globally, customers can trade across more than 135 international markets in 33 countries.
Cryptocurrency: In September 2021, Interactive Brokers added cryptocurrency trading to its offerings. Traders can now trade Bitcoin, Ethereum, Litecoin and Bitcoin Cash through their integrated account.
Forex: Retail forex trading is not offered in the United States unless you are designated an "eligible contract participant" by Interactive Brokers. More specifically, this means being an individual or organization with assets of over $10 million.
Other: Interactive Brokers has added the ability for U.S. investors to trade spot gold in amounts as small as one ounce. They have also added a wide variety of micro and small-sized futures contracts. These contracts, like small crude oil futures, open up futures markets to more people.
Interactive Brokers offering summary:
|OTCBB / Pink Sheets||Yes|
|Complex Options Max Legs||6|
|Bonds (US Treasury)||Yes|
|Mutual Funds (Total)||11160|
|Crypto Trading - Total Coins||4|
Commissions and fees
Interactive Brokers offers two primary pricing plans: IBKR Pro (meant for professionals) and IBKR Lite (for casual investors). Because Interactive Brokers' core clientele are professional traders and institutional investors (e.g., hedge funds), it is crucial to provide the lowest commissions schedule available. In our rigorous assessment, there is no question Interactive Brokers delivers. In 2022, Interactive Brokers is among Best in Class for Active Trading.
IBKR Lite: With IBKR Lite, there are no market data fees and all U.S. stock and ETF trades are $0, while options trades follow the same pricing as IBKR Pro (see below). The main caveat to use of IBKR Lite is the lower-quality order executions. Like other $0 brokers, under IBKR Lite, Interactive Brokers makes money off payment for order flow, or PFOF. Overall, IBKR Lite is designed for casual traders and investors.
IBKR Pro stock trades: For small order sizes, e.g., several hundred shares, Interactive Brokers is a fantastic deal. However, trade several thousand shares or more and Interactive Brokers quickly becomes pricey, even on its tiered pricing plan, which starts at $.0035 per share ($1 minimum).
IBKR Pro options trades: On U.S. exchanges using Interactive Brokers SMART routing, commissions per options contract are tiered. Any premium greater than $0.10 equals $0.65 per contract with a $1 minimum and no maximum. For premiums between $0.05 and $0.10, the rate is $0.50 per contract. Finally, for premiums less than $0.05, the rate is $0.25 per contract.
IBKR Pro other benefits: Interactive Brokers does not accept payment for order flow in IBKR Pro, a key element in providing quality order execution. Also, Interactive Brokers leads the industry with the lowest margin rates, which vary from 1.55% down to a remarkable 0.75% for clients who hold more than $1 million with the brokerage.
Mutual funds: Interactive Brokers offers over 30,000 mutual funds globally, with 10,000 in the U.S. Of the U.S. mutual funds, at least 4,000 are commission-free; otherwise, the standard commission rate is $14.95.
Penny stocks: IBKR Pro is not a good choice for trading penny stocks, as you’ll pay a per-share commission.
Interactive Brokers pricing summary:
|Penny Stock Fees (OTCCB)||.0035 per share|
|ETF Trade Fee||$0.00|
|Options (Base Fee)||$0.00|
|Options (Per Contract)||$0.65|
|Futures (Per Contract)||$0.85|
|Mutual Fund Trade Fee||$14.95|
|Broker Assisted Trade Fee||$30.00|
Mobile trading apps
Mobile trading with Interactive Brokers via its IBKR Mobile app is well-supported across all devices. From lightning-quick streaming data to full-featured order entry and portfolio management, Interactive Brokers includes everything professionals require to trade on the go. A new app, Impact, simplifies investing in companies whose social and environmental principles align with your own.
Charting: Charting is robust, including 70 optional indicators and easy customizations. However, some features one would expect are not included, such as stock and/or index comparisons.
Considerations: One notable drawback to the app is that stock alerts cannot be delivered via push notification. Instead, alerts are delivered via email, which is baffling considering how sophisticated Interactive Brokers technology is otherwise.
Impact: The Impact app prompts you to choose values that are important to you, such as clean water or opposition to animal testing. From there, you can identify companies that support those values and even “swap” positions in your portfolio with a single trade. Your Impact dashboard will display an A-F grade for your portfolio based on the values chosen.
Interactive Brokers mobile app screenshots:
Interactive Brokers mobile summary:
|Apple Watch App||Yes|
|Watch List Syncing||Yes|
|Charting - After-Hours||Yes|
|Charting - Technical Studies||70|
|Charting - Study Customizations||Yes|
|Watch Lists - Streaming||Yes|
|Watch Lists - Create & Manage||Yes|
|Watch Lists - Column Customization||Yes|
Other trading platforms and tools
Interactive Brokers’ flagship platform, desktop-based Trader Workstation (TWS), supports trading everything under the sun, including global assets. While TWS is not designed for new investors, it easily ranks among the best trading platforms in the industry. Less experienced traders will prefer the alternative Client Portal, a web-based platform.
TWS trading tools: Trading tools within TWS designed for seasoned traders are widespread: algo trading, an Options Strategy Lab, Volatility Lab, Risk Navigator, Market Scanner, Strategy Builder, and Portfolio Builder, to name a few. Watch lists can include anything from equities to individual options contracts, futures, forex, warrants – you name it. An impressive 494 data points are available for column customization.
TWS IBot: IBot, also available in TWS mobile, uses a foundation of artificial intelligence to quickly service customer requests via chat (or voice in the iPhone app). Portfolio information, orders, quotes, and more are all supported. Think, "What's the last price of GOOG?" or, "Chart AAPL vs. MSFT" or, "Buy 100 shares of FB." Only TD Ameritrade can go toe-to-toe with IBot.
TWS drawbacks: Tasks such as pulling up a stock to trade are tricky due to the vast array of securities available to trade. For example, typing in "AAPL" for Apple yields a slew of possible matches, which can be overwhelming for nonprofessionals. Also, automated technical analysis tools, such as Trading Central (Recognia), are available only as a paid subscription add-on.
Client Portal: This platform for less experienced traders is offered through Interactive Brokers’ website and includes all the core features necessary to trade and manage a basic portfolio. Portal is the primary trading experience for IBKR Lite customers, which means it is far less robust, but also far easier to use, than Trader Workstation. In my testing, I found it to be good, but not great.
Interactive Brokers trading platform screenshots:
Interactive Brokers trading platform summary:
|Desktop Trading Platform||Yes|
|Web Trading Platform||Yes|
|Watch Lists - Total Fields||669|
|Charting - Indicators / Studies||121|
|Charting - Drawing Tools||9|
|Charting - Study Customizations||6|
|Charting - Save Profiles||Yes|
|Trade Ideas - Technical Analysis||Yes|
|Streaming Time & Sales||Yes|
|Trade Ideas - Backtesting||Yes|
For casual investors, sticking to Fundamentals Explorer within Client Portal is, hands down, the way to go for doing research. For seasoned traders and professionals, TWS includes everything necessary to be productive, such as scanning and back-testing.
Fundamentals Explorer: Built for everyday investors to perform traditional fundamental research on stocks, ETFs, and mutual funds, the Fundamentals Explorer tool is solid. Available in Client Portal, TWS and the mobile app, Fundamentals Explorer does a good job with using design to visualize data. For example, the Social Sentiment analysis tab uses a slew of Twitter data to identify a social sentiment trend, overall sentiment score and other takeaways.
Stock research: TWS research highlights include numerous screeners, extensive back-testing functionality, and portfolio analysis tools, which are all excellent. For traders looking to conduct specific research, Interactive Brokers offers over 70 third-party provider feeds a la carte, including Morningstar, which are available either free or for a monthly fee. Any provider package purchased integrates straight into TWS.
However, performing even basic research on stocks, ETFs, and mutual funds is nothing like the traditional full-service brokerage experience one might find at TD Ameritrade, Charles Schwab, or Fidelity. You must learn how to navigate TWS to find the information you want; there are only a few streamlined views.
The web-based Client Portal, in contrast, is far easier to use and, while not quite as intuitive as the offerings of leaders in this arena, it’s a measurably better research experience than TWS.
ESG research: Interactive Brokers includes a variety of environmental, social and governance ratings and research across its platforms, including the abovementioned Impact tool, which lets you score your portfolio stock holdings for ESG-specific metrics.
PortfolioAnalyst: Stepping away from traditional research, PortfolioAnalyst provides traders with hedge fund-level reporting on their portfolio's performance and makeup. Interactive Brokers also offers a free version for nonclients where you can link all your accounts and run reports. It isn't as easy to use as, say, Personal Capital. Still, it's a compelling tool for traders with assets spread across numerous institutions.
Interactive Brokers market research screenshots:
Interactive Brokers research summary:
|Research - Stocks||Yes|
|Stock Research - ESG||Yes|
|Stock Research - PDF Reports||5|
|Screener - Stocks||Yes|
|Research - ETFs||Yes|
|Screener - ETFs||Yes|
|Research - Mutual Funds||Yes|
|Screener - Mutual Funds||Yes|
|Research - Pink Sheets / OTCBB||Yes|
|Research - Bonds||Yes|
|Research - Futures||Yes|
|Research - Forex||Yes|
Interactive Brokers offers numerous options to learn about trading and investing. From its Traders' Academy portal to content on the IBKR Quant blog, there is a wide variety of written material and accompanying video content, including quizzes. While progress tracking is not included for videos and articles, it is for quizzes, and there is at least one per lesson.
Learning center: Traders’ Academy courses are organized by experience level as well as by topic. Interactive Brokers also offers archived content such as from its live and recorded webinars, much of which is also available on its YouTube channel. Lastly, Interactive Brokers offers a large variety of short videos.
Interactive Brokers education screenshots:
Interactive Brokers education summary:
|Education (Mutual Funds)||No|
|Interactive Learning - Quizzes||Yes|
To score Customer Service, StockBrokers.com partners with customer experience research firm Confero to conduct phone tests from locations throughout the United States. For our 2022 Broker Review, 159 customer service tests were conducted over six weeks. Here are the results for Interactive Brokers.
- Average Connection Time: 3-5 minutes
- Average Net Promoter Score: 6.6 / 10
- Average Professionalism Score: 6.2 / 10
- Overall Score: 6.1 / 10
- Ranking: 10th of 13 brokers
While Interactive Brokers does not provide traditional banking services, it does offer its version of a cash management account, which offers a debit card, bill pay and the ability to earn interest on uninvested cash.
Your account must be denominated in a base currency that has a positive interest rate to earn interest. There are also minimum tier cutoff levels, wherein you earn a yield only on cash that exceeds those levels, which vary per currency. Bottom line, with interest rates remaining low, there is little to no yield to be captured in the U.S.
Interactive Brokers banking summary:
|Bank (Member FDIC)||Yes|
With industry-leading commission rates for professional traders, more than 68 optional order types, trading in more than 135 international markets, and a robust trade platform suitable for any professional, Interactive Brokers is an excellent choice for investors who fit into its target mold.
Meanwhile, for casual investors, Interactive Brokers has assembled a competitive offering by providing $0 stock and ETF trades through IBKR Lite alongside thorough research with the Client Portal web platform.
Is my money safe with Interactive Brokers?
Interactive Brokers is well-capitalized and is licensed and regulated in nearly a dozen major jurisdictions, making it a safe broker to hold your money. As a publicly traded company, Interactive Brokers (NASDAQ: IBKR) has a market capitalization of over $28 billion as of May 28, 2021.
Money held in an investment account with Interactive Brokers in the U.S. is protected by SIPC insurance, which covers up to $500,000 in securities and up to $250,000 in cash (up to a total of $750,000 per customer). If you hold more than $250,000 in cash, Interactive Brokers offers a Insured Bank Deposit Sweep Program, which provides up to $2.5 million in FDIC insurance in addition to the SIPC insurance.
The degree of security may depend on the specific country you are located in and the related regulatory requirements that Interactive Brokers follows in countries where it holds client funds, such as the U.S., U.K., Canada, Australia, Singapore, India and Japan.
Is Interactive Brokers good for beginners?
While the Trader Workstation desktop platform is not ideal for beginners, Interactive Brokers’ web-based Client Portal platform will meet the needs of most traders who are beginners or have limited investing experience.
In addition, Interactive Brokers continues to expand the scope of educational materials available, which includes IBKR Campus and Traders’ Academy, among other rich resources to accelerate your learning as a beginning trader or investor.
Why is Interactive Brokers so cheap?
Interactive Brokers was one of the first firms to lower its commissions to zero dollars, through its IBKR Lite offering; a wave of U.S. brokerages followed suit. While Interactive Brokers still has commission-based account offerings, such as IBKR Pro, it can offer very low commissions because of its ability to route orders intelligently across a wide variety of execution venues.
IBKR may receive volume discounts and rebates, some of which may be passed on to clients in the form of savings or price improvements, depending on where it routes your order, including its own alternative trading system, IBKR ATS.
About Interactive Brokers
Headquartered in Greenwich, Connecticut, Interactive Brokers (NASDAQ: IBKR) was founded in 1977 by Thomas Peterffy, who is respected as "an early innovator in computer-assisted trading." Interactive Brokers is most widely recognized for its extensive international reach, servicing over 135 market destinations worldwide. The firm places over 2.7 million trades per day and services over 1.5 million client accounts with over $370 billion in customer equity.
2022 Review Methodology
Our mission at StockBrokers.com is simple: provide thorough and unbiased reviews of online brokers, based on an extraordinary level of hands-on testing and data collection. Our ratings and awards are based on this data and our experts’ deep authority in the field; brokers cannot pay for preferential treatment. Here’s more about trustworthiness at StockBrokers.com.
For the StockBrokers.com 12th Annual Review published in January 2022, a total of 3,075 data points were collected over three months and used to score 15 top brokers. This makes StockBrokers.com home to the largest independent database on the web covering the online broker industry.
As part of our annual review process, all brokers had the opportunity to provide updates and key milestones and complete an in-depth data profile, which we hand-checked for accuracy. Brokers also were offered the opportunity to provide executive time for an annual update meeting.
Our rigorous data validation process yields an error rate of less than .001% each year, providing site visitors quality data they can trust. Learn more about how we test.
About the Author
Blain Reinkensmeyer As Head of Research at StockBrokers.com, Blain Reinkensmeyer has 20 years of trading experience with over 1,000 trades placed during that time. Referenced as a leading expert on the US online brokerage industry, Blain has been quoted in the Wall Street Journal, The New York Times, the Chicago Tribune, and Fast Company, among others.
Chris McKhann Chris McKhann has been in the industry for more than 20 years. He has worked for many of the top names in the online trading space, including TD Ameritrade and optionMONSTER, which later became part of E*TRADE. His work has been cited in the Wall Street Journal, Reuters, the Financial Times, Forbes, CNBC, Nasdaq.com and Nikkei. He has also been an advisor and outside trader for several hedge funds. He was one of the first traders to delve into the VIX tradable products and to write about them (back in 2006). Chris is also an educator who teaches high school statistics, finance and computer science.