Interactive Brokers will be our top pick in 2021 for professionals due to its high-quality desktop trading platform and low margin rates. Interactive Brokers appeals not only to professionals but also casual investors thanks to its $0 trades option and user-friendly website platform.
Minimum Deposit: $0.00
Stock Trade Fee: $0.00
Options (Per Contract Price: $0.65)
Top Takeaways in 2021
We spent three months testing eleven of the best online brokers to create our 11th Annual Review. Here are our top findings about Interactive Brokers.
Interactive Brokers (IBKR), which offers traders access to global markets (135 centers in 33 countries) is the best-known of all. Professionists have access to industry-leading commissions that include the lowest margin rates across all balance levels.
Interactive Brokers has it all: Day Trading, Mobile Trading and Options Trading. Futures Trading is also available. Professional Trading is another winner. Interactive Brokers has 68 order types.
Interactive Brokers still falls short of the top brokers for beginners despite obvious progress in simplifying their website for casual investors. Interactive Brokers was still the Best in Class in eight categories for 2021.
Overall Summary
Overall 5
Commissions & Fees 4.5
Platforms & Tools 4.5
Research 5
Mobile Trading 4.5
Offering of Investments 5
Education 4
Easy to Use 4
Commissions and Fees
Interactive Brokers offers two main pricing plans: IBKR Pro, for professional traders, and IBKR Lite, for casual investors. Interactive Brokers core clients are institutional investors and professional traders (e.g. hedge funds), so it is essential to offer the lowest possible commissions. Interactive Brokers' performance was clear in our thorough assessment. Interactive Brokers was voted Best in Class in Active Trading for 2021.
IBKRLite: IBKRLite has no market data fees. All US stock and ETF transactions are $0. Options trades follow the IBKR Pro pricing. IBKR Lite's main drawback is the lower quality of order executions. Interactive Brokers also makes money on its order flow, just like other $0 brokers. IBKR Pro was designed for professionals and IBKR Lite, for casual investors.
IBKR Pro Stock Trades: Interactive Brokers offers a great deal for small orders (e.g., several hundred shares). Interactive Brokers becomes expensive when you trade thousands of shares. Tiered pricing starts at $.0035 per shared ($1 min). IBKR Pro will not be a good choice for penny stocks trading because you will have to pay a per-share fee.
IBKR Pro options trades. Commissions per option contract on US exchanges using Interactive Brokers' SMART routing are tiered. Any premium above $.10 equals $.65 for each contract. There is a $1.00 minimum, and no maximum. Premiums between $.05-$.10 are charged at $.50 per contract. The rate for premiums under $.05 is $.25 per agreement.
IBKR Pro additional benefits: Interactive Brokers refuses to accept payment for order flows, which is crucial in order to provide quality execution. Interactive Brokers has the lowest margin rates in the industry, ranging from 1.55% to an astonishing 0.75% for clients holding more than $1,000,000 of brokerage assets.
IBKR Pro missc Fees. Traders need to be aware of the minimums and miscellaneous fees charged by Interactive Brokers. You can keep your $100,000 balance, or pay at least $30 in commissions per month, and you'll be free. Other fees can run up to $20 per calendar month. For beginners and everyday investors, we recommend IBKRLite. Also, check out our list with the top brokers that offer free trading.
Interactive Brokers provides mutual funds: Interactive Brokers offers more than 30,000 mutual funds worldwide, with 10,000 in America. Minimum 4,000 US mutual funds are commission-free. Otherwise, the standard commission rate of $14.95 is applied.
Summary of pricing for Interactive Brokers:
Feature Tariff
Minimum Deposit $0.00
Stock Trades $0.00
Penny Stock Fees $0.0035 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 Trading Fee $30.00
Platforms and Tools
Interactive Brokers' flagship platform, Trader Workstation (TWS), is a desktop-based Trader Workstation that supports trading all types of assets, even global ones. TWS is not intended for beginners, but it is easily one of the most popular trading platforms in the sector.
TWS has a wealth of professional tools: There are numerous tools in TWS that can be used by seasoned traders: Algo trading (Options Strategy Lab, Volatility Lab), Risk Navigator and Market Scanner, Portfolio Builder, Strategy Builder, Strategy Builder, Risk Navigator, Risk Navigator, Risk Navigator, Risk Navigator, Risk Navigator, Market Navigator, Risk Navigator, Market Navigator, Portfolio Builder, Strategy Builder, Strategy Builder and Portfolio Builder to name just a few. The watch list can contain anything, from equities, to individual options contracts and futures, forex or warrants. Column customization is possible using 494 datapoints.
Research
Fundamentals Explorer within Client portal is the best option for novice investors. TWS also includes everything you need to be productive for professionals and traders, such as scanning and back-testing.
TWS's best stuff: TWS features include a variety of screeners, back-testing functionality, portfolio analysis tools, and many other research highlights. Interactive Brokers offers more than 70 third-party provider feeds, including Morningstar, for traders who need to conduct research. These feeds are available for free or a monthly charge. Any provider package can be integrated into TWS.
TWS's drawbacks include the inability to perform basic research on stocks, ETFs and mutual funds. This is not the same experience as a full-service brokerage like Charles Schwab, TD Ameritrade or Fidelity. It requires you to be able navigate TWS to find the information that you are looking for. However, Client Portal is far more user-friendly than TWS and is much more intuitive than industry leaders.
Fundamentals Explorer: Designed for everyday investors, Fundamentals Explorer is a great tool to conduct traditional fundamental research on stocks, mutual funds, ETFs and other investments. Fundamentals Explorer can be accessed via the Client Portal, TWS, or the mobile app. This tool uses design to visualize data. Social Sentiment analysis tab for instance uses a lot of Twitter data in order to identify a trend or overall sentiment score and other important takeaways.
ESG Research: Interactive Brokers provides a range ESG ratings and research across all its platforms. One of the most unique features is the Impact tool. This allows you to score your portfolio stock holdings based on ESG specific metrics. After you identify the issues that are important to you (e.g. guns, animal testing or clean water), your Impact Dashboard will give an A-F score for each portfolio. You can also access the tool on mobile. The tool will even recommend similar companies for you to exchange shares for. The ESG Impact Dashboard was awarded the No. 1 New Trading Instrument.
PortfolioAnalyst - PortfolioAnalyst offers traders hedge fund-level reporting about their portfolio's performance, composition and results. Interactive Brokers also offers a free version to non-clients, where you can connect all your accounts and run report. It's not as simple to use as Personal Capital. However, traders with assets spread across many institutions will find it a compelling tool.
Mobile Trading
Interactive Brokers offers mobile trading on all platforms. Interactive Brokers provides everything professionals need to trade from lightning-quick streaming to fully-featured order entries and portfolio management.
Charting: Charting is strong, with 70 options indicators and easy customizations. However panning isn’t as smooth as HTML5 charting apps. There are also some features that one might not expect, such stock and/or index comparisons.
Considerations: Stock alerts can't be sent via push notification. Alerts are instead sent by email. This is surprising considering how advanced Interactive Brokers technology.
Investment Opportunities
Interactive Brokers has the best offering in the business and leads in many areas, including international trade. Customers worldwide can trade in more than 135 foreign markets in 33 different countries.
Interactive Brokers does Interactive Brokers offer cryptocurrency? Interactive Brokers is not able to offer cryptocurrency as an asset tradeable. To trade popular tokens, such as Bitcoin, Ethereum or Dogecoin you'll need to signup for a crypto-exchange.
Forex: If you are not an Interactive Brokers Eligible Contract Participant, retail forex trading in the United States isn't available. This is a person or an organization that has assets in excess of $10 million.
Education
Interactive Brokers provides many ways to learn about investing and trading. From the IBKR Quant website to its Traders’ Academy portal, you will find a variety of written and video content. There are even quizzes. For videos and articles, progress tracking is not provided, however, it is included for quizzes. There are at least one for each lesson.
Courses and webinars - The Trader's Academy courses have a topical as well as an experience level. Interactive Brokers also offers archived content from recorded and live webinars. Many of these videos can also be found on its YouTube channel. Interactive Brokers has a wide variety of short videos. We found these to be platform tutorials.
Banking
Interactive Brokers is not a traditional bank, but it offers a debit card and bill payment, and the possibility to earn interest from cash left uninvested.
For interest to accrue, your account must have a base currency that offers a positive interest rate. Additionally, there are minimum tier levels that limit the amount of cash you can earn. They vary from one currency to another. With interest rates near zero, the US offers little or no yield.
Final Thoughts
Interactive Brokers is a top choice for those who are able to meet the criteria for its target market. It offers industry-leading commissions for professional traders, over 68 options order types, trading on more than 135 global markets, and a robust trade platform that can be used by any professional.
Interactive Brokers offers a great option for casual investors by offering $0 stock or ETF trades through IBKR Lite and thorough research via the Client Portal website platform.