Interactive Brokers Review: $0 Commissions Trading, Low Margin Rates, Interest on Balance

Interactive Brokers offers a comprehensive platform with low fees, advanced tools, and extensive investment options to help you achieve your trading goals.

Why Interactive Brokers For Traders?

Are you looking for a trading platform that combines low fees with powerful tools? Interactive Brokers might be your perfect match.

With a reputation for offering some of the lowest fees in the industry, Interactive Brokers also boasts a suite of advanced trading tools that can benefit both casual and advanced traders.

If you’re serious about trading, let’s dive into why Interactive Brokers could be the best choice for you.

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Interactive Brokers: An In-Depth Review

Interactive Brokers at a Glance

• Account Minimum: $0
• Stock Trading Costs: IBKR Lite offers unlimited free trades on U.S.-listed stocks and ETFs. IBKR Pro has low per-share pricing.
• Options Trades: No base commission; per-contract fees apply.
• Account Fees: No annual, transfer, or closing fees.
• Interest Rate on Uninvested Cash: Requires a $10,000 minimum balance.
• Tradable Securities: Includes stocks, bonds, mutual funds, ETFs, options, futures, crypto, and more.
• Trading Platforms: Multiple apps and platforms, including IBKR Mobile, Client Portal, and Trader Workstation.
• Research and Data: Extensive free and subscription-based resources.
• Customer Support: 24/5 phone and chat support.

Interactive Brokers Key Features

Interactive Brokers (IBKR) is renowned for its robust platform, advanced tools, and low-cost trading. Here’s an in-depth look at the key features that make Interactive Brokers a standout choice for traders of all levels.

1. Low-Cost Trading

Interactive Brokers is known for its competitive pricing structure, which appeals to both casual and active traders.

• IBKR Lite: Offers commission-free trades on U.S.-listed stocks and ETFs, making it an excellent choice for casual investors.
• IBKR Pro: Features a tiered pricing model with fees as low as $0.0005 per share, favoring high-volume traders. This structure allows frequent traders to significantly reduce their costs.

2. Advanced Trading Platforms

Interactive Brokers offers several powerful trading platforms tailored to meet the needs of both beginners and advanced traders.

• Trader Workstation (TWS): Ideal for advanced traders, TWS provides a highly customizable interface with sophisticated charting tools, real-time monitoring, and advanced order types.
• IBKR Desktop: IBKR Desktop combines the best of proven and new technologies to create a sleek, customizable trading platform designed for traders of all levels.
• IBKR Mobile: The mobile app replicates the functionality of the desktop platform, allowing traders to manage their accounts and place trades on the go. It includes features like advanced charting, news feeds, and real-time data.

3. Extensive Range of Tradable Securities

Interactive Brokers supports a wide array of asset classes, providing ample opportunities for diversification.

• Stocks and ETFs: Access to thousands of U.S. and international stocks and ETFs.
• Options and Futures: Advanced traders can leverage options and futures trading with competitive pricing.
• Forex and Metals: Trade major, minor, and exotic currency pairs, as well as precious metals.
• Crypto: Offers trading in major cryptocurrencies like Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.
• Fixed Income: Access to a broad range of bonds including U.S. Treasuries, corporate bonds, municipal bonds, and non-U.S. sovereign bonds.

4. Fractional Shares

Interactive Brokers allows investors to buy fractional shares of stocks and ETFs, enabling them to invest in high-priced securities without needing to purchase a full share. This feature is particularly beneficial for investors looking to diversify their portfolios with limited capital.

5. Global Market Access

One of Interactive Brokers’ standout features is its extensive global reach. Traders can access over 135 markets in 33 countries, making it easy to diversify investments internationally. This global access is ideal for traders looking to capitalize on opportunities in different regions.

6. Margin Trading

Interactive Brokers offers some of the lowest margin rates in the industry.

• IBKR Lite: Charges a margin rate of 7.83% (the benchmark rate plus 2.5%).
• IBKR Pro: Margin rates range from 5.83% to 6.83% (benchmark plus 0.5% to 1.5%), depending on the account balance and trading volume. The tiered margin rates make it more affordable for traders to leverage their investments.

7. Research and Data Tools

Interactive Brokers provides an extensive range of research tools and market data to help traders make informed decisions.

• Free and Subscription-Based Services: Access to over 200 research providers, including Morningstar, Zacks Investment Research, and Market Realist.
• Advanced Analytics: Features such as a volatility lab, advanced charting, heat maps, and a mutual fund replicator.
• Impact Dashboard: Allows investors to align their investments with their personal values by selecting criteria from 13 principles like clean air and water, LGBTQ inclusion, and gender equality.
• World Map Screener: Effortlessly find stocks that match your strategies by selecting and blending multiple factors into a single score.

8. Customer Support

Interactive Brokers offers robust customer support to assist traders with their needs.

• 24/5 Availability: Phone and chat support are available 24 hours a day from Monday to Friday, and from 1 p.m. to 7 p.m. Eastern time on Sundays.
• Comprehensive Help Center: A detailed FAQ section and educational resources provide self-help options for users.

9. Educational Resources

Interactive Brokers provides a wealth of educational content to help traders enhance their knowledge and skills.

• Webinars and Tutorials: Covering a range of topics from basic platform navigation to advanced trading strategies.
• User Guides: Detailed guides on using various features of the trading platforms.
• Paper Trading: A simulated trading environment where users can practice strategies without risking real money.

10. Interactive Brokers IRAs

For long-term investors, Interactive Brokers offers IRA accounts with no account minimums and access to a wide range of investment options. This makes it easier for investors to plan for retirement while enjoying the benefits of IBKR’s low fees and advanced tools.

Pros and Cons

Pros:

• Large Investment Selection: Access to a wide variety of securities including foreign stocks.
• Strong Research and Tools: Comprehensive tools for market analysis and trading strategies.
• No-Transaction-Fee Mutual Funds: Over 19,000 available.
• High Order Execution Quality: Ensures competitive pricing and speed.

Cons:

• High Minimum for Interest on Uninvested Cash: Requires a $10,000 balance to earn interest.
• Complex Website Navigation: Finding specific information can be challenging.

Interactive Brokers Fees: What You Need to Know

Understanding the fee structure is crucial for any investor. Interactive Brokers offers some of the lowest fees in the industry, making it a cost-effective choice for trading stocks, mutual funds, and other assets. Here’s a detailed look at the various fees associated with an Interactive Brokers account:

• Stock Trading Fees: IBKR Lite offers commission-free trades on U.S.-listed stocks and ETFs. IBKR Pro has low per-share pricing, starting as low as $0.0005 per share.
• Options Trading Fees: No base commission with competitive per-contract fees.
• Mutual Funds: Over 19,000 no-transaction-fee mutual funds available.
• Margin Rates: Some of the lowest in the industry, starting at 7.83% for IBKR Lite and as low as 5.83% for IBKR Pro.

Is Interactive Brokers Right for You?

Interactive Brokers is a top choice for both casual and active traders due to its comprehensive platform, low-cost trading, and extensive range of tradable securities. Its advanced trading tools, global market access, and robust customer support further enhance its appeal. Whether you’re a beginner looking to start investing or an experienced trader seeking advanced capabilities, Interactive Brokers has the features and resources to meet your needs.

By leveraging Interactive Brokers’ comprehensive services, you can trade stocks with confidence and efficiency, knowing that you have access to one of the best online brokers in the market.

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Frequently Asked Questions About Interactive Brokers

What makes Interactive Brokers a top choice for professional traders? Interactive Brokers offers low fees, advanced trading platforms, and access to a wide range of tradable assets, making it ideal for professional traders to trade assets. The IBKR Pro plan provides competitive per-share pricing and high-quality order execution, ensuring that professional traders can maximize their trade value.

How does Interactive Brokers provide high trade value? Interactive Brokers delivers high trade value through its low-cost structure and superior order execution. By minimizing fees and providing powerful trading tools, traders can keep more of their profits and execute trades efficiently, enhancing overall trade value.

What types of assets can I trade on Interactive Brokers? Interactive Brokers supports a broad range of tradable assets including stocks, options, futures, forex, mutual funds, and cryptocurrencies. This extensive selection allows traders to diversify their portfolios and explore various investment opportunities.

What is the Interactive Brokers trading platform like? Interactive Brokers offers several advanced trading platforms, including the IBKR Desktop, Client Portal, and IBKR Mobile. These platforms provide sophisticated charting tools, real-time data, and customizable interfaces, catering to both casual investors and professional traders.

What is Interactive Brokers’ IBKR Desktop? The IBKR Desktop platform is a powerful desktop trading platform for traders. With advanced charting, customizable dashboards, and robust trading tools, IBKR Desktop offers a superior trading experience.

How does Interactive Brokers compare to other online brokers? Interactive Brokers stands out among online brokers due to its low fees, extensive range of tradable assets, and advanced trading tools. The broker’s robust platform and comprehensive market access make it a preferred choice for traders looking for efficiency and cost-effectiveness as compared to other brokers. Beginner investors can compare interactive brokers here.

Can beginners use Interactive Brokers, or is it only for professional traders? While Interactive Brokers is renowned for its professional trader features, it also offers tools and educational resources suitable for beginners. The IBKR Lite plan provides commission-free trades and a user-friendly interface, making it accessible for new traders while still offering advanced features for more experienced users.

What are the benefits of using an online broker like Interactive Brokers? Using an online broker like Interactive Brokers provides several benefits including lower trading costs, advanced trading tools, and convenient access to a wide range of markets. Online brokers often offer more flexibility and lower fees compared to traditional brokerage firms, making them an attractive option for modern investors. Learn more on interactive brokers website.

By John Huynh, with over two decades in finance and investing, including as a Senior Finance & Operations Manager at a renowned research institute and degrees in Economics and International Studies from UC Irvine. Edited by Tony Jay, a seasoned finance blogger and Executive Editor with two decades in banking, specializing in online banking and savings strategies. Tony holds a doctorate from Tulane University.