Interactive Brokers Review

Review

Interactive Brokers, a member of the Interactive Brokers Group, Inc. founded 38 years ago, opened its doors to the public in 2000 and has grown internally to become one of the premier securities firms in the industry with over $5 billion in equity capital. Interactive Brokers has been rated Best Online Broker by Barron’s 2015 for the Fourth Consecutive Year.

Interactive Brokers is regulated by the Futures Commission Merchant ("FCM"), the Commodity Futures Trading Commission ("CFTC"), and the National Futures Association ("NFA"). It is also registered by the Securities Exchange Act of 1934, the Securities and Exchange Commission ("SEC"), and the Financial Industry Regulatory Authority ("FINRA"). It is also a member of SIPC and can therefore accept U.S. clients.

The Interactive Broker website is high class with tabs and features that are not found with many other brokers. There are far more features here than I have seen in many a review.

Interactive Brokers Home Page

Accounts

Interactive Brokers offers accounts along the lines of an American mutual fund, offering a variety of different account structures for individuals, families and small businesses.

Stock trading can be done for Individual, Joint and Retirement Accounts in a single currency through the IB fast track application. The ProTrack application is used to open an account to trade a Stock, Options, Futures, Forex, Bonds, Mutual Funds and CFDs for Individual, Joint, Trust, Retirement and UGMA/UTMA Accounts.

Opening any of the accounts listed above requires a minimum equity deposit in cash or stock of $10,000; $5,000 for IRA account.  In addition, anyone participating in these accounts must have extensive product knowledge for the product chosen to trade and prior execution of 100 or more trades of any product.

Small businesses such as Corporations, Partnerships, Limited Liability Corporations and Unincorporated legal structures are offered a separate account and there is also a possibility of managing multiple accounts (15 or fewer) of the types listed above under a single login.

A IB demo account can be opened for either of these account setups using the Trader Workstation (TWS), which is a full-featured Java-based trading and order management application; the FX Trader:  or the WebTrader trading platforms. In addition, anyone trading through a demo account is entitled, just like traders in self-funded accounts, to use of the Probability Lab SM to analyze the market's probability distribution, which shows what the market believes are the chances that certain outcomes will occur. Traders can then adjust their trades based on their own forecast.

A most unusual account is their IB PaperTrader where traders can practice their trading skills in a simulated trading environment with an Interactive Brokers Paper Trading account. Anyone with a current IB account can experience the full range of Trader Workstation's trading capabilities in a real-time market environment without risking any of their own money. IB's Paper Trading accounts lets traders watch how their strategies play out as they develop and practice their trading skills.

Interactive Brokers Account Management

Features

Traders at IB have access to over 100 market centers in 24 countries and can trade stocks, options, futures, Forex, bonds, ETFs and CFDs in multiple currencies from a single IB Account. The IB Account Management system lets traders configure and manage their IB account from a single window. Trading is totally automatic and their advanced SmartRouting℠ system searches for the best price available at the time of an order, and routes and re-routes all or parts of the order to achieve optimal execution.

The PortfolioAnalyst lets traders analyze the performance of their positions in an account quickly and efficiently by creating and saving PDF reports suitable for presentation.

Some of the pages at IB are complicated, such as the Investors’ Marketplace, which as the name implies is truly interactive.  Clear explanations on their usage are provided, however, and that makes this page easier to navigate.

Margin loan rates are 81% lower and commissions are 88% less than any of their competitors. For Stocks, ETFs and Warrants, traders can choose either a fixed commission per trade or a set per cent of the trade.  They can also choose the volume- tiered commission which decreases depending on volume, and includes exchange, regulatory, and clearing fees.

Education

At the Trader’s University, traders can find a host of different educational tools. There are free live webinars that are offered in several different languages besides English, such as Chinese and Russian. Archived webinars are also available.  Courses on trading stocks, Forex and options and video tutorial guides on how to use the various platforms so as to optimize ones profits are also provided.

Under the education tab, traders can find all the documentation they need as well as a FAQ listing with additional technical information on the Interactive Brokers platforms for desktop and mobile devices. In addition, basic trading information on taxes, day trading, funding, IRA’s and IB’s Stock Yield Enhancement Program can be found in this section as well.

Widgets at IB consist of Options Strategies, Options Calculator and Probability Lab. Each one is accompanied by a colorful graph or chart.

IB also offers comprehensive research, news and market data for traders, investors and institutions using various news feeds such as Interactive Brokers Information System (IBIS), Reuters, Dow Jones, flyonthewall.com, Briefing.com and others.

An added feature I found when doing this Interactive Brokers review is their listing of all the trading exchanges worldwide which most other options brokers do not provide.

All of these features are available on mobile devices as well as for desktop use.

Deposits/Withdrawals

Deposits are made at IB via funds transfers and by check. Deposits made from American and Canadian brokers are done through ACATs and ATON.

IB allows one free withdrawal request every 30 days.  After the first withdrawal (of any kind), IB will charge a fee according to whether the withdrawal was made in Europe, Asia or America.

Customer Support

There are two separate customer service tracks at Interactive Brokers. Customer Service deals with everything involving trading, accounts, funding and execution.

The Technical Assistance Center (TAC) helps with issues concerning connections to IB and problems with the software involved.

IB offers 24-hour customer service by phone via regional Customer Service Centers located through-out America, Europe and Asia.

Chat is available for existing clients may upon login to Account Management. Prospective clients are provided chat access for application related inquiries through the Help Me! Link located directly within the application.

Conclusion

Interactive Brokers is chock-a-block with interesting and useful features that can sometimes be overwhelming but anyone opening an account and trading at IB should have an enjoyable trading experience trading. Although there is only one type of account, it is set up to accommodate various different groups and that make is flexible and unique.  It’s good to see that a demo account is offered as well as another practice account, Interactive Brokers Paper Trader where traders can practice their trades in a simulated trading environment.

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Features

Interactive Brokers offers different features to all types of traders. When it comes to trading accounts, there is actually only one standard account but this can be set up to accommodate Individual, Joint and Retirement Accounts. The ProTrack application can be used to trade Stocks, Options, Futures, Forex, Bonds, Mutual Funds and CFDs for these accounts with access to over 100 market centers in 24 countries. A host of educational tools are available at the Trader’s University, where free live webinars are offered in several different languages besides English, such as Chinese and Russian.

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Platforms

There are three trading platforms at Interactive Brokers.

TWS

Their market maker-designed Trader Workstation (TWS) is a simplified but sophisticated workspace that organizes management tools, analytics, account monitoring. Traders, investors and institutions can select stocks, options, futures, Forex, bonds and funds on over 100 markets worldwide from a single account.

The TWS platform at Interactive Brokers supports over 60 order types and tools that help traders limit risk, speed execution, provide price improvement, allow privacy, time the market and simplify the trading process through advanced trading functions.

Comprehensive news and fundamentals subscriptions from leading providers are integrated seamlessly into the TWS workspaces.

Interactive Brokers Platforms

WebTrader

WebTrader, an HTML-based trading platform, uses a clear and uncluttered trading interface but still provides advanced trading features and tools.

WebTrader runs through the Internet, so traders can log in and trade from any Internet-ready PC with no downloads required. The tabs and panels are clearly labeled and traders can view contract-specific fundamentals, including profile, news, charting, financials, insider trading info, analyst info and SEC filings for any company. The can keep up with the latest market news with news feeds from Reuters News and Market Scanners provide a quick scan of relevant markets and post them based on instrument, parameter and other filtering criteria defined by the trader.

The simple interface can be customized by the trader so it works the way he/she wants it.

Probability Lab

The third platform used at Interactive Brokers is the Probability Lab which allows traders to learn the Probability distribution (PD) of the chosen assets, i.e. exactly what the chances are for certain outcomes. It also allows traders to calculate the PD from option prices and vice versa so traders can know what are the best trades and their potential consequences.

All three platforms at Interactive Brokers area accompanied by at least one, sometimes several illustrative graphs and charts. They are available as mobile apps as well as for desktop.

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