Interactive Brokers

What are the opinions about Interactive Brokers? What is the minimum deposit? How to contact customer service?

Interactive Brokers
Punctuation CREATE ACCOUNT
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POINTS IN FAVOR
Lots of products from around the world to invest in.
The commissions are very low compared to other brokers.
Regulated by the main financial institutions in the world.

Interactive Brokers is usually always well placed in the rankings of the best stock brokers due to the large number of tools for professional and advanced investors who are interested in making money with their investments.

This broker is with almost any market worldwide, so you can trade stocks, options and futures around the world and 24 hours a day. In Fall 2020, Interactive Brokers rolled out its Impact Dashboard, which helps clients align their personal values ​​with their portfolios, and implemented additional ESG tools and research that localizes international opportunities.

Interactive Brokers introduced a Lite pricing plan in Fall 2019, offering commission-free equity trading on most available platforms. Interactive Brokers still charges a small fee to their IBKR Pro clients.

In this article we will see all these new features, as well as the most common commissions, customer service and everything you need to know if you are looking to invest with this broker. As always, we rely on our experience and the opinions of Interactive Brokers that are both positive and negative on the internet.

💡TO TAKE INTO ACCOUNT:
1. It has been awarded in numerous portals as the best broker for international operations, the best for day trading and the best for its commissions.
2. Wide range of assets (stocks, options, futures and bonds) in 125 markets in 31 countries, using 22 currencies.
3. Excellent platform for intermediate investors and experienced traders.

Who is Interactive Brokers for?

Interactive Brokers is primarily intended for institutional investors and active and advanced traders around the world. Although increasingly the company continues to introduce new products, educational resources and services aimed at investors who are not as active.

Making the experience less intimidating for new or less active investors is still a pending task for the company. However, in terms of serving its core market of active investors and seasoned traders, Interactive Brokers is incredibly competitive as a broker.

With your platform we have unparalleled market access. IB has incorporated a wide variety of tools that can meet almost every business need imaginable.

👍 Pros
1. Optimal execution of sent orders
2. Wide range of offerings around the world and in all asset classes
3. Free service that finds less expensive ETFs
👎 Cons
1. Data transmission runs on only one device at a time
2. IB clients who do not have extensive stock market knowledge will find it unwieldy
3. Small or dormant accounts incur substantial fees

Pros explained

  • Interactive Brokers’ order execution engine has what could be the smartest ‘order executor’ on the market . It keeps abreast of changes in market conditions to redirect all or part of your order to achieve optimal execution, achieve a price improvement and maximize any possible refunds.
  • No other rider with a range of offers as wide as Interactive Brokers. In addition to direct access to global exchanges, IB has added a huge inventory of fixed income products, including many European corporate bonds and government bonds.
  • The replicator Mutual Funds Interactive Brokers helps find lower – cost ETFs are essentially identical to the more expensive funds.

Cons Explained

  • You can only have data transmission on one device at a time . If you log into your mobile app while still connected to the desktop, it will ask you to disable data transmission on one of the devices.
  • It is one of the most powerful brokers on the market, but this can be a serious problem for those who are just starting out. Although he is already working on improving its appearance and usability, he still has a lot to do so that we can recommend this broker to newcomers in the world of the stock market.
  • Small or inactive IB Pro accounts are subject to maintenance fees or data charges.

commissions

With most of the major brokers reducing their fees, Interactive Brokers has gone from being one of the lowest commission brokers to being one of the most expensive . Also, Interactive Brokers fee structure is quite complex and we cannot cover it all in this article.

If we can see the most popular ones. Let’s start with the commissions for US stocks , in this case there are two options to be chosen by the client:

  • Pay a fixed price per share of $ 0.005 per traded share with a minimum of $ 1 and a maximum of 1% of the trade value.
  • Pay a commission based on monthly order activity ranging from a maximum of $ 0.035 per share for less than 300,000 shares per month to $ 0.0005 per share for more than 100,000,000 shares per month, with a minimum of 0 , 35 dollars per operation.

Assuming that a client is using the fixed price per share system described in the previous section, these would be the following commissions to pay:

  • A transaction for one share or less (if you trade fractional shares) generates 1% of the total trade value or a minimum charge of at least $ 1. Trading 1,000 shares costs $ 5. (Free for IB Lite customers).
  • There is no fee per leg for commercial options. You will pay $ 0.65 per contract for options trading with a minimum commission of $ 1. Low-value contract fees range from $ 0.50 ($ 0.05 to $ 0.10 premium) or $ 0.25 (less than $ 0.05 premium).
  • Negotiating a single contract costs $ 1. Negotiating 50 contracts costs $ 32.50.
  • The covered call operation of 500 shares plus 5 contracts costs $ 5.75.
  • The interest margin for Pro clients is 1.55% for balances up to $ 100,000 and 2.55% for Lite clients.
  • IB Pro clients with less than $ 100,000 in their accounts must generate $ 10 or more per month in commissions to avoid an inactivity fee.
  • No fees for closing or transferring an account.
  • No charge for exercise and assignment or for voluntary reorganizations
  • Futures trading costs $ 0.85 per contract.
  • 96 commission-free ETFs can be traded for clients on fixed or tiered commission plans.

This table above can help you see IB commissions in euros.

Trading platform

Interactive Brokers hasn’t focused on making the onboarding process easier for new users until recently, but it still has a lot to improve. New users have to electronically sign some forms for the account to work, but most features are available to use as soon as your account is opened. You can open an account without making a deposit, but it will be closed if you don’t deposit within 90 days of opening.

Once it is set up, you will be able to see the IB tools. The company has added IBot, a digital assistant powered by artificial intelligence, to help get where you need to go.

The entire Interactive Brokers platform is focused on Traders Workstation (TWS) . TWS is a powerful and widely customizable downloadable platform, and it is gradually gaining some conveniences, such as a list titled “For You” that maintains links to your most used tools.

The Mosaic interface built into TWS is much more aesthetically pleasing and allows you to organize tools as building blocks to form a workspace. The layout library allows customers to select from predefined interfaces, which can then be further customized. You can also create your own mosaic designs and save them for future use. In short, you will need to dedicate time to be able to learn how to use all these options.

The Interactive Brokers mobile application has almost all the functionality of the web platform , although it is not as extensive as the TWS desktop platform. All available asset classes can be traded on the mobile app. Any mobile watchlist you create is shared with desktop and web platforms, and data streams in real time. The fundamental research is solid and the charts are very good for mobile devices with a set of indicators, although there are no drawing tools in the mobile app.

Interactive Brokers enables a wide variety of order types in TWS, Client Portal, and the mobile apps, including conditional orders such as one-cancel-another and one-active-other. TWS allows conditional orders based on price, volume, daily profit and loss, margin buffer, number of available short shares available, redemption available at the trading venue, and other factors.

Closing a position or placing an option order is easy from a portfolio screen, as is finding options trades to hedge your long positions.

You can exchange lots of shares or lots of your currency for any kind of asset.

Financial product offerings

There is no other broker with such a wide range of offerings as Interactive Brokers. The firm adds new products based on customer demand and links to new electronic exchanges as soon as technically possible. In April 2020, IB expanded its mutual fund market, offering nearly 26,000 funds from more than 285 fund families that include funds from global sources.

That said, it is worth noting that IB does not offer cryptocurrency trading other than Bitcoin futures .

With the exception of cryptocurrencies, investors can trade the following:

  • Long and short shares (23,000 available to borrow).
  • OTCBB (penny stocks)
  • Mutual funds (the world’s largest mutual fund market with nearly 26,000 funds available)
  • Bonds
  • Options
  • Futures and futures options
  • Robo-advisory
  • Forex (23 currencies, 115 trading pairs)
  • Fractional trading of US stocks listed on the NYSE, AMEX, NASDAQ, ARCA or BATS, as well as US penny stocks OTC Pink
  •  IPOs, warrants and individual stock futures

Customer Support

Interactive Brokers customer service has a 24-hour phone line Monday through Friday with call-back service. It also has an online chat with a human agent as well as a message center and IBot with artificial intelligence that directs customers to resources and frequently asked questions.

Interactive Brokers does not have a very good reputation when it comes to customer service, but they have worked hard in recent years to improve this perception. IBot is a clear example of this.

Training

Interactive Brokers offers a wide range of free investor education programs . Traders Academy is a rigorous and structured curriculum intended for financial professionals, investors, educators, and students seeking a better understanding of asset classes, markets, currencies, tools, etc. There are more than 45 courses available, and the number of courses doubled during 2020 and continues to increase during 2021.

IB and various industry experts offer daily webinars on a variety of topics. Hundreds of recordings are available on demand in multiple languages.

You can download a demo version of Traders Workstation to learn its intricacies and practice.

Safety

Since Interactive Brokers has clients from all over the world, it has been focused on security for a long time and meets or exceeds industry standards.  This includes:

  • Mobile app users can log in with biometric recognition (facial or fingerprint).
  • Multiple forms of two-factor authentication.
  • IB has insurance provided by Lloyd’s of London. Each account is covered by 150 million dollars.
  • It is regulated by the main financial agencies of the countries or regions where it operates.

⚖️ Conclusion

IB is one of the best brokers on the market if you are an advanced trader . Although it is improving to become accessible to investors who have just arrived in the world of the stock market, it still has a long way to go.

The opinions about Interactive Brokers from users who have used this platform is very positive as you can see in this review.