Interactive Brokers Review: Is It Good?

Interactive Brokers offers a robust trading platform that experienced traders favor due to its competitive fee structure and extensive range of trading options.

Interactive Brokers started as a platform strictly for professionals, but has since been offered to individual investors as well. The platform itself is still geared towards the experienced investor with a desire to trade more than ETFs and to trade frequently, though.

Keep reading to learn who benefits the most from the services Interactive Brokers offers.

What Does Interactive Brokers Offer?

Interactive Brokers offers a robust selection of investments. You'll find your standard stocks, bonds, and mutual funds. But you'll also find ETFs, options, futures, crypto, and forex selections as well. They also offer fractional shares, where you can buy a portion of stock you can afford.

Interactive Brokers also offers a variety of different account types, including cash, margin, and portfolio accounts, helping to lure in many different types of investors.

Who Benefits from Interactive Brokers?

Interactive Brokers is a platform for the advanced trader. You need a solid understanding of the market and how to trade investments.

It's best suited for advanced and active traders, including day and penny stock traders, as well as those interested in options and futures.

Because it's geared toward the advanced trader, Interactive Brokers requires:

• Proof of making at least 100 trades or 100 "pretend" trades in IB's demo (more on that below)

• Proof of knowledge of how the market works

• Minimum of one year of trading experience with that product

What We Like About Interactive Brokers

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• They offer competitive pricing. If you are looking for a discount broker, cost is probably an important factor. IB's pricing runs along the same lines as many of the larger discount brokers available today. They offer both fixed-rate and tiered pricing to keep the rates even lower for frequent traders.

• They offer a demo account. You can download the demo without signing up for an account. All you have to supply is your email address and you can start executing pretend trades based on 10-15-minute delayed data. You can try out different strategies and even test IB's research tools within the demo. If you decide to open an account, you'll use the same username and password to create the "real" account.

• The trading platform is a robust trading tool. Once you sign up and fund an account, you'll have access to Trader Workstation, the real trading platform. You can trade any investment with this platform, including global investments. You can set up watch lists and customize the data screens to suit your needs. Trades typically execute quickly with this system. You can also program your customized strategies into the platform for automation down the road.

• There is plenty of research available for stocks and ETFs. Investors receive free research with the TWS platform. This free research offers plenty of insight for trading stocks and ETFs. If you want to trade mutual funds or bonds, though, you may want to look to a third-party for this information.

• You can integrate third-party software into the Trader Workstation. If you prefer the use of a third-party application for your trades, it may integrate with the Trader Workstation. You'll have to understand the application programming interface, though, which may exclude certain investors.

• You can reach a customer service representative 24 hours a day during weekdays. Whether you prefer phone contact or chatting online, IB's customer service representatives are available around the clock, Monday through Friday. You can call a Client Service Center or chat online. IB also encourages clients to search their Knowledge Base for answers to frequently asked questions.

• You can have a debit card tied to your investment account. Interactive Brokers provides a debit card with all standard accounts (not IRA accounts). This allows you to charge against your cash balance or even your margin account if you meet the margin requirements.

• You can take courses through Trader's Academy. The academy is great for beginning and experienced traders. It offers webinars, videos, and articles on topics like options trading, charting, order types, short sales, and understanding margins. There are literally hundreds of topics you can search through on their website.

• You can assess the risk of a potential trade. Interactive Brokers offers a Risk Navigator that helps you better assess the risk of trades before you execute them. You can create reports based on different aspects to help you choose appropriate trades for your risk level.

• You can make trades on-the-go. Interactive Brokers offers the same trading tools you have at your desktop on their app. You can create option spreads, enter orders, and access quotes and research, all on the app.

• No minimums or inactivity fees. You are not required to maintain minimum balances and you will not be charged even if you do not trade for a long period of time. There is also no minimum deposit required to open a cash account.

Reasons You May Want to Look Elsewhere

• You are a beginning trader. The Trader Workstation is robust and overwhelming for the new trader. The fact that you have to have proof of 100 previous trades before using their platform gives you an idea of the complexity of the system and the knowledge you'll need before using it.

• The pricing structure is complicated. Interactive Brokers provides clear fee structures for both its IBKR Pro and IBKR Lite services, but they may be more complicated to understand compared to those of other stock brokers.

  IBKR Lite enables users to execute an unlimited number of commission-free trades on stocks and ETFs, whereas IBKR Pro users have the option to choose between fixed or tiered per-share pricing.

• They only offer over 150 commission-free ETFs. If your main investment strategy is commission-free ETFs, Interactive Brokers probably isn't the best option as there are other discount brokers with a wider selection and lower account minimums.

Platforms and Tools - Are They Good?

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The Interactive Broker's platform, Trader Workstation, works on many devices, including PCs and Macs. The system itself is relatively fast and includes the features many investors find crucial, including:

• Real-time quotes
  
• The ability to set up alerts
  
• Customizable watch lists
  
• The ability to program the dashboard to suit your needs
  
• Help with creating and comparing options strategy before executing them

The trading platform includes features, such as the OptionTrader and Probability Lab, FXtrader (for forex), and the Mutual Fund/ETF Replicator.

Interactive Brokers also provides a convenient web-based Client Portal, where you can check quotes, execute trades, monitor account balances, and manage your account. Moreover, Interactive Brokers offers APIs where you can build custom trading applications.

Mobile App - Is It Worth It?

The Interactive Brokers mobile app provides a suitable experience for trading on-the-go. While you have some limited capabilities, as would be expected on a mobile app, they do a great job of providing many of the features you have on the desktop program.

The app works on all devices, including Apple and Android devices. You can execute basic stock trades or complex forex trades and everything in-between with the app. You can even access robust research right on the app, giving you flexibility while you are away from your computer.

How They Compare

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E*TRADE: If you are a low volume or beginning investor, E*TRADE may appeal to you more with their lower account minimums and easier to use platform. E*TRADE does offer a similar platform as Interactive Brokers, but it's only for traders who execute at least 30 trades per quarter.

	Interactive Brokers	E*TRADE
	Benefits and Features
Stock Trading	IBKR Lite: $0 per share (min $0 per order) IBKR Pro - Fixed: $0.0005 per share (min $1.00 per order, max 1.0% of trade value). IBKR Pro - Tiered: Starts at $0.0035 per share for less than 300,000 shares (min $0.35 per order, max 1% of trade value)	$0 per trade
Options Trading	$0.15-$0.65 per contract ($1 minimum per order)	$0 per trade + $0.65 per contract $0 per trade + $0.50 per contract if you make 30+ trades a quarter
Annual Fee		None
Minimum Deposit	$0	$0 for self-directed brokerage accounts; Managed portfolios start at $500 minimum
Mutual Fund Trading	$0 for no-transaction-fee funds. For transaction-fee funds, 3% trade value OR $14.95, per transaction, whichever is less, for transaction-fee funds	$0 for no-load, no-transaction-fee funds; $19.99 for transaction-fee funds
Commission Free ETFs	150+	250+
Penny Stocks
Broker Assisted Trades	$30	$25 + Regular Commission
Inactivity Fee	$0	$0
Maintenance Fee	$0	$0
Banking	No	Checking account offers no minimum balance requirements, free online bill pay, and unlimited debit card and check transactions.
Mobile App	Yes
Desktop App	Yes	E*TRADE Pro (requires you to execute at least 30 trades during a calendar quarter or maintain brokerage account balance of at least $250,000)
Forex Trading	Available for qualified customers
Futures Trading	Yes	$1.50 per contract, per side + fees (excluding bitcoin futures)
Customer Service	United States: Monday-Friday 8am - 10pm ET; Sunday 1pm - 7pm ET (24/7 Weekday service available in other countries)	800-387-2331
Locations	No
Online Community	Yes
Seminars	Yes
Virtual Trading	Yes	Yes
Stock Trading
Options Trading
Mutual Fund Trading
Online Platform
Banking
Mobile App
Commissions and Fees
Ease of Use
Research
Online Community
Trading Platform
Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details. Interactive Brokers: Pricing information from published websites as of 10/17/2023. E*TRADE: Pricing information from published website as of 11/09/2024.

Fidelity: If your trading strategy focuses on mutual funds and ETFs, Fidelity provides a greater selection of these investments. All other things being equal, Fidelity is a great comparison to IB as they offer a mobile app, banking (checking and savings, not a debit card), and virtual trading.

	Interactive Brokers	Fidelity
	Benefits and Features
Stock Trading	IBKR Lite: $0 per share (min $0 per order) IBKR Pro - Fixed: $0.0005 per share (min $1.00 per order, max 1.0% of trade value). IBKR Pro - Tiered: Starts at $0.0035 per share for less than 300,000 shares (min $0.35 per order, max 1% of trade value)	$0
Options Trading	$0.15-$0.65 per contract ($1 minimum per order)	$0.65 per contract
Annual Fee		None
Cryptocurrency Trading		$0
Minimum Deposit	$0	$0
Mutual Fund Trading	$0 for no-transaction-fee funds. For transaction-fee funds, 3% trade value OR $14.95, per transaction, whichever is less, for transaction-fee funds	Yes
Commission Free ETFs	150+
Broker Assisted Trades	$30
Inactivity Fee	$0	$0
Maintenance Fee	$0	$0
Banking	No	No
Mobile App	Yes	Yes
Desktop App	Yes
Forex Trading	Available for qualified customers
Futures Trading	Yes
Customer Service	United States: Monday-Friday 8am - 10pm ET; Sunday 1pm - 7pm ET (24/7 Weekday service available in other countries)
Locations	No
Online Community	Yes
Seminars	Yes
Virtual Trading	Yes
Stock Trading
Options Trading
Mutual Fund Trading
Online Platform
Banking
Mobile App
Commissions and Fees
Ease of Use
Research
Savings
Fees
Customer Service
Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details. Interactive Brokers: Pricing information from published websites as of 10/17/2023. Fidelity: Pricing information from published website as of 07/05/2024.

Lightspeed: With similar account opening minimums and both virtual trading and mobile trading options, Lightspeed and IB are good options for advanced investors only. Lightspeed's platform is as complex as IB's, making it relevant for experienced and frequent traders only.

Bottom Line

If you are a frequent trader with high volume trades, you may enjoy the pricing and benefits provided by Interactive Brokers. With a robust trading platform and quick trade execution, it's a solid platform for the experienced investor.

If you are less experienced or a novice, you may be better off with a broker who will provide a little more hand holding and easier to navigate website, at least while you get your feet wet.