Interactive brokers options trading review

Interactive Brokers Review. Interactive Brokers is a top choice for active and experienced traders who want to trade any investment product for the lowest costs and fees in the industry. The trading platforms generally suit the needs of experienced investors who don't require the additional resources offered by the major brokers. Latest Update November 11, 2015. Top broker for active trading. Interactive Brokers’ trading technology is so good that you could actually get by as a professional day trader using their platforms (and many people do). The company tries to guide you as much as possible to make the steep learning curve much easier. IB offers a web-based trading platform called WebTrader and a more advanced downloadable platform, Trader Workstation, that may take you a few days to learn. Both platforms are included for Interactive Brokers clients at no additional cost. Most traders tend to gravitate to the Trader Workstation as it offers more features than WebTrader. Lowest trading costs in the industry. When it comes to pure trading, there’s none better in the industry than Interactive Brokers. You can trade the most products at the lowest prices and no competitor even comes close.

Sure, the minimum required deposit of $10,000 is quite steep, but each stock trade will only cost you $0.005 per share. Superior account security. Some new investors are worried about account security. If you’re one of them, this is the place to be. Interactive Brokers offers a number of physical security devices, one of which is a calculator-like security device which you enter a code into while logging in. It may take you a bit longer to log in to your account as a result, but such is the trade-off one makes for peace of mind. And, of course, you don’t have to use these features if you don’t want to. Straightforward, customizable interface. Interactive Brokers offers a completely different type of user experience compared to other brokers. First, you should know that their web-based trading software is simply a place to execute trades. You can do some research, but it’s very bare bones. You can access your portfolio information, view current trading positions, and quickly make trades from the Market View. A major plus, however, is that everything on this page is completely customizable so you can add, remove, and rearrange whatever you like. Great mobile app with plenty of play money.

Interactive Brokers has a mobile app called mobileTWS that’s available for all of the popular devices. They even offer it in a Java ME format so you can use it with your Nokia smartphone. You can make trades and get stock quotes, although the app is a little slow because it briefly loads during navigation. Once you get a quote, you can watch the bid and ask prices change right before your eyes in real time. Yet the best feature of the mobile app is its full demo. Trying out mobileTWS with $500,000 of play money in your account will stave off any fears you might have with trusting your mobile device to execute your trades. You can place trades, monitor your progress, and basically have the exact same capabilities you would have with an account funded by your own money. Serious fines for rules violations. Interactive Brokers has been in the news several times for violating reporting rules and failing to supervise their accounts. Interactive Brokers failed to compute customer funds in accounts at the end of each day from 2008-2011. Interactive Brokers also used different currencies to maximize earnings, which was not requested by their customers. The Commodity Futures Trading Commission (CFTC) said that Interactive Brokers did not retain enough dollars to meet their obligations to commodity customers.

They were ordered to pay a $225,000 fine in April of 2013 and a $700,000 fine in July of 2012. Account history and statements displayed separately. The frustration of the web-based platform sets in when you want to access the rest of your account information, such as reports or statements. You have to go into a separate account management section under the login portion of the website. Interactive Brokers’ setup keeps everything separate, while most companies provide you with everything you need in one location, which might make sense when you think about who Interactive Brokers targets as their clients. The platform is simplified for trading only, but there’s definitely an easier way to simplify things without keeping it all completely separate. High initial learning curve. Overall, Interactive Brokers is difficult for anyone to navigate the first time around. It lacks many of the standard features that you would see from other brokers, but then again, Interactive Brokers is not like any of the other brokers. They exist for the active and professional trader, and their reputation shows that they know what they’re doing. Traders who are interested in the top technology and lowest prices will certainly benefit in the long run even if the initial learning curve is a bit painful. Additionally, Interactive Brokers offers an extensive user guide with plenty of screenshots to guide you through the process. Poor customer service reputation. Based on the customer support features available, Interactive Brokers scores fairly well because they offer live chat and support on social media outlets.

However, there is plenty of chatter across the web and other message boards that have various complaints about the customer service for Interactive Brokers, or the lack thereof. Trading Costs and Fees. Broker Assisted Trades: $0 Futures Contract Fee: $0.85 Maintenance Fees: Minimum of $10month in commissions Margin Rates: 1.07-1.57% Minimum Account Balance Fee: $20month (account below $2,000) Mutual Funds Fee - Load: Not offered Mutual Funds Fee - No-Load: $14.95 Options Contract Price: $0.15-$0.70 Options Flat Fee: $0 Stock Flat Fee: $0.005share. ACHEFT Withdrawal: $1 Bounced Check: $25 Check Withdrawal: $4 Domestic Wire Withdrawal: $10 Forced Margin Sellout: Unknown Full Account Transfer: $0 IRA Annual Fee: $30 Partial Account Transfer: $0 Stop Payment on Check: $50 Telephone Orders: $30. We find the best of everything. How? We start with the world. We narrow down our list with expert insight and cut anything that doesn't meet our standards. We hand-test the finalists. Then, we name our top picks. Interactive Brokers Review 2017. Interactive Brokers is a solid choice for active, advanced traders because of its international trade capabilities, low — and volume-based — commissions and quality trading platform. The broker isn’t a good fit for beginners or infrequent traders, as it provides little investor education, requires a high minimum investment and charges inactivity fees that will quickly eat into returns. Such investors may want to check out NerdWallet’s list of best brokers for beginner investors. NerdWallet's rating: 4.0 5. Commissions: Fixed-rate and volume-tiered pricing, starting at $1 Account minimum: $10,000 Promotion: Special terms for clients 25 and younger.

Interactive Brokers is best for: Advanced traders. Day traders. Penny stock traders. Margin accounts. Options trading. Interactive Brokers at a glance. • Forex ($10 million in assets required) Where Interactive Brokers shines. Low commissions: It’s hard to beat the stock and exchange-traded funds commission structure at Interactive Brokers, which favors frequent, high-volume traders at just $0.005 cent — one-half of 1 cent — per share. There’s a $1 minimum trade commission and a 0.5% maximum, and exchange and regulatory fees are included. The broker also offers tiered pricing to lower rates even more: Investors who trade more than 300,000 shares a month can pay $0.002 cent or less per share, depending on trade volume, although exchange and regulatory fees are extra on this plan. Options trading, too, is offered at rock-bottom pricing, with just a 70 cent charge per contract and no base (minimum $1 per order), plus discounts for larger volumes. Trading platform: Interactive Brokers’ Trader Workstation is considered one of the best trading platforms available for advanced traders.

The desktop platform is fast and includes standard features like real-time monitoring, alerts, watchlists and a customizable account dashboard. An options method lab lets you create and submit both simple and complex multileg options orders and compare up to five options strategies at one time. Desktop trading platform Trader Workstation. Other tools include a volatility lab, advanced charting, heat maps of sector and stock symbol performance, paper trading and a mutual fund replicator, which helps users identify ETFs that replicate the performance of a selected mutual fund but offer lower fees. A new feature, InteractiveBroker FYIs, offers customized notifications about events that could affect a trader’s investments. Research, news and market data are also available, although in many cases there’s a premium subscription fee. Novices will likely find Trader Workstation completely overwhelming, to the point of being unusable. But Interactive Brokers also offers a strong mobile trading app and IB WebTrader, a streamlined browser trading platform that is a bit easier to navigate. Margin rates: Traders looking to use margin will love the rates that Interactive Brokers offers they’re extremely low. The maximum margin rate is the benchmark rate plus 1.5%. The broker charges a blended rate based on account balance.

It has a calculator on its website to help investors quickly do the math based on their account balance. Investment selection: Interactive Brokers offers access to a huge selection of products, from standard offerings of stocks, options, ETFs, mutual funds and bonds to precious metals, forex trading and futures. In a change last year, the broker began requiring assets of $10 million or more for leveraged forex positions. Where Interactive Brokers falls short. Minimum investment requirement: The $10,000 minimum investment requirement is steeper than at other online brokers, which brings Interactive Brokers’ rating down a notch. The company does lower its minimum to $5,000 for individual retirement accounts and $3,000 for clients 25 or younger, which is a nice offering. Inactivity fees: Here, too, the minimums are high for all but very frequent traders. Accounts with balances under $100,000 must meet a minimum of $10 a month in trade commissions, or Interactive Brokers will charge the difference as a monthly fee. Accounts with an equity balance of $2,000 or less must meet minimum trade commissions of $20. Again, there is a break here for clients 25 or younger, who have a minimum monthly trade commission of just $3. Customer experience: Because Interactive Brokers has a variety of commission structures and added fees, it can be hard for investors to quickly identify what their costs will be. The website and trading platforms are clearly geared toward advanced traders, and the customer service is frequently reported to be subpar. Is Interactive Brokers right for you? Frequent and advanced traders could see significant commission savings at Interactive Brokers, due to the discounted pricing for high-volume traders. These investors will also benefit from the company’s quality trading platform and fast trade execution. New investors likely won’t find a home here.

The low commissions don’t make up for the high inactivity fees, and the account minimum and lack of educational materials and research are high barriers to entry. Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: aoshea@nerdwallet. com. Twitter: @arioshea. The Best Online Brokers for Stock Trading. Power Trader? See the Best Online Trading Platforms. Find the Best Online Brokers. New Investor? See the Best Brokers for Beginners. Best Online Advisors.

Recent Broker Reviews. Recent Online Advisor Reviews. Disclaimer: NerdWallet has entered into referral and advertising arrangements with certain broker-dealers under which we receive compensation (in the form of flat fees per qualifying action) when you click on links to our partner broker-dealers andor submit an application or get approved for a brokerage account. At times, we may receive incentives (such as an increase in the flat fee) depending on how many users click on links to the broker-dealer and complete a qualifying action. The new Firefox. Download Firefox — English (US) Your system may not meet the requirements for Firefox, but you can try one of these versions: Download Firefox — English (US) Your system doesn't meet the requirements to run Firefox. Your system doesn't meet the requirements to run Firefox. Please follow these instructions to install Firefox. Please follow these instructions to install Firefox. The best Firefox ever.

Uses 30% less memory than Chrome. Truly Private Browsing with Tracking Protection. all things Firefox. If you haven’t previously confirmed a subscription to a Mozilla-related newsletter you may have to do so. Please check your inbox or your spam filter for an email from us. Advanced Install Options & Other Platforms. Download Firefox for Windows. Download Firefox for macOS. Download Firefox for Linux. Download Firefox — English (US) Your system may not meet the requirements for Firefox, but you can try one of these versions: Download Firefox — English (US) Your system doesn't meet the requirements to run Firefox. Your system doesn't meet the requirements to run Firefox. Please follow these instructions to install Firefox. Interactive Brokers Review by Warrior Trading. Interactive Brokers Review.

In our Interactive Brokers Review we found their platform is extremely stable, the availability of shorts is fantastic. Interactive Brokers Review (NASDAQ:IBKR) Your Gateway to the World’s Markets. Trade on over 100 market centers in 24 countries. Direct market access to stocks, options, futures, bonds, ETF’s and CFD’s from a single IB Universal Account. Interactive Brokers offers a complete solution for professional traders which includes custody, execution and clearing, and reporting. Interactive Brokers offers lower commissions, no ticket charges no minimums no technology, software, platform, or reporting fees and low financing rates. Interactive Brokers Group, Inc. was founded by its Chairman and CEO Thomas Peterffy. Over the last 40 years, it has grown internally to become one of the premier securities firms with over $5 billion in equity capital. Their mission remains unchanged: “Create technology to provide liquidity on better terms.

Compete on price, speed, size, diversity of global products and advanced trading tools.” Interactive Brokers conducts its brokerdealer and proprietary trading businesses on over 100 market destinations worldwide. In its broker dealer agency business, IB provides direct access (“on line”) trade execution and clearing services to institutional and professional traders for a wide variety of electronically traded worldwide. Interactive Brokers Group and its affiliates execute nearly 1,000,000 trades per day. Interactive Brokers is headquartered in Greenwich, Connecticut and has over 1,100 employees in its offices in the USA, Switzerland, Canada, Hong Kong, UK, Australia, Hungary, Russia, Japan, India, China and Estonia. IB is regulated by the SEC, FINRA, NYSE, and other regulatory agencies around the world. For further information regarding their complete offering for professional traders, please refer click here to visit their website. Interactive Brokers Advantages. Competitive commissions rates with fixed and tiered pricing (see commission rates) Interactive Brokers Disadvantages. Higher required minimum equity to open trading account than some of the other brokers($10,000) As noted above, commission structure can be fixed or tiered, based on volume and even where you are trading from. There are many nuisances to consider, but generally, for most retail traders, the fixed pricing will be the most cost effective. Traders who take large positions in excess of 10k shares will often look for fixed pricing to reduce their costs. However, Interactive Brokers has always been a big advocate of transparent pricing and that means you pay for exactly what you use. If you use lots of order flow, you pay for it. If you don’t, you don’t have to pay for it. This is not a bad way to price the commissions but can be more expensive for very aggressive traders who trade 100k-200k sharesday.

Final Interactive Brokers Review. Interactive Brokers is among the Top Recommended Brokers by Warrior Trading. They are also a top choice for international traders looking got take part in the US stock and options markets. It can be a great resource for new traders with decent capital. The tools and Trader Workstation can be overwhelming for newbs at first, especially since learning to use the software is a do it yourself kind of deal. The cost of actual trading is for the most part, competitive if you aren’t trading big lots. The ability to switch between Forex, futures, options and equities from one screen and have multiple types of trades going can be very appealing to diverse traders. Also, if you are like me, you can trade from your IRA or other account types not allowed at many other US based brokerages. Trading Terminology By Warrior Trading. Search our Archives of Trading Terminology. TD Ameritrade Broker Review – 2017. Value For Investors Value For Day Traders Commissions & Fees Customer Service Platform & Tools Summary For your average retail trader who may take 2-3 tradesweek, this is a terrific platform, much like ETRADE, but with more advanced charts and options tools.

For an active day trader, the cost of commissions, the lack of customized &hellip Finviz Review: A Powerful Stock Screener For Everyone. Finviz Review Quality Rating Cost vs Value Reliability Coolness Factor Summary Finviz is a relatively powerful, easy-to-use scanning tool that will not break the bank. It’s free! It should be a tool that all new traders need to have in their toolbox. Once you have established yourself as a consistent and profitable trader, then you &hellip ETRADE Review | Exposing the True Drawbacks for a Pro Trader. ETRADE Review Quality Rating Cost vs Value Reliability Coolness Factor Hot Keys & Direct Access Routing Day Trader Specific Features Execution Speed for Day Traders Summary A High Quality Online Brokerage firm that charges a premium for the quality. For traders looking for full service and convenience, ETRADE is an excellent choice. For traders looking &hellip TradeKing Review by Warrior Trading Reviews. Trading King Review Quality Rating Cost vs Value Reliability Coolness Factor Customer Service Summary In today’s broker review we will be taking an in depth look at TradeKing, a rapidly growing and popular discount brokerage firm. Can this discount broker satisfy your active trading needs? 3.9 TradeKing: Broker Review TradeKing is a relatively new &hellip Suren Astvatsaturian. downside of IB they don’t have help with tax preparation.

Suren, what do you mean by your comment about tax preparation. IB does not offer the appropriate forms for end of tax year preparations? Leave a Reply Cancel. Creating 50,000 Freedom Traders Over the Next 3 Years. Our Mission is to help 50,000 traders on their journey to success over the next three years. Become our next student today! Attend a free webinar. $31,202.73 in profits since joining Warrior Trading. If you really want to learn from the pros, I can say from experience that Warrior Trading offers top notch training from very skilled, highly disciplined and successful instructors. I promise you there isn't a chat room out there that has this level of experienced traders interacting daily to help one another out , you just can't beat it. Dallas, United States. Up to $5000 in one day. When I first started trading I would have a profit of $3000 in a good month. After I took Warrior Tradings day trading course I now do between $1500 to $5000 most days.

The guys at Warrior Trading has made a course that does not only contain a great method but it's also explained so it´s easy to understand. For people that are serious about their trading, Warrior Trading is the place to be. I'm a Veteran trader Finance Degree from OSU and always still learning books audible and purchased Warrior Trading Program so much new and useful information that I bought monthly chat to watch them apply principles they teach and to get some new fresh Ideas. Excellent trading education even for Advanced Traders with experience. Warrior Trading is without a doubt the most professional trading servicefamily I've ever been involved with. I have been trading off and on for over 15 years and full time for the past year and a half. The transparency of Warrior Trading is one aspect that attracted me to them. They show you it all. They show you their losses as well as their gains. They are about showing you how to make a profit from the markets. Trading is hard, but warrior trading makes it easier. They keep a consistently friendly atmosphere, which you will find that after trading for a few years, you will appreciate.

Traders like consistency, and when you log on to Warrior Trading you can expect the same service as the day before. There are no surprises. These things are valuable. They quietly establish an edge, make their money, and leave until the next day. Ross and his team are good guys, and if you were to subscribe to all the different services out there and compare them for 3 months, you would see WT at the top of the list. I've always been passionate about trading but never really imagined this passion would have turned in a real, full-time job. In fact, I've never found any service which I really felt that would help me become a professional trader. That is, until I met Warrior Trading. In particular, Ross has been really inspirational while I'm on my path to become a full-time day trader. I always wanted to trade stocks but I saw all those numbers go up and down and I would always say to myself " I'm never going to get this". I looked at the free Youtube videos and I was hooked. It was the best investment i ever made. Now I know how to day trade and the scare part about it is gone, I mean, I listened to them and paid for their paper trade and now i feel confident on what I'm doing with stocks.

I really mean this, I took time to write this because I really feel it in my heart that you guys are helping me accomplish my dream and that is to be a daytrader. Thank you warriortrading. com. The courses are a must for whoever would like to make day trading a career. I learn so many ways to help me save money and make money. The day I finished the course I did not have a losing day where I lost over $300 dollars! My worst loss prior to the course was close to $15k. Ross helps you understand how the losses happen, the psychology behind it and how to prevent it ! I feel a lot more comfortable trading, because now I understand what stocks to pick, when to get in and out and how to manage my risk!! Join our chat room Today! IF YOU DO NOT AGREE WITH ANY TERM OR PROVISION OF OUR TERMS AND CONDITIONS, PLEASE EXIT THE SITE IMMEDIATELY. PLEASE BE ADVISED THAT YOUR CONTINUED USE OF THIS SITE OR THE PRODUCTS OR INFORMATION PROVIDED THEREBY SHALL INDICATE YOUR CONSENT AND AGREEMENT TO THESE TERMS AND CONDITIONS. Warrior Trading may express or utilize testimonials or descriptions of past performance, but such items are not indicative of future results or performance, or any representation, warranty or guaranty that any result will be obtained by you. These results and performances are NOT TYPICAL , and you should not expect to achieve the same or similar results or performance. Your results may differ materially from those expressed or utilized by Warrior Trading due to a number of factors.

Woodland, CA 95776. Copyright © 2017 Warrior Trading™ All rights reserved. Interactive Brokers: A Review for Options Trading. Here's a review of Interactive Brokers from the perspective of an investor who uses stock options in his or her portfolio. Stock options are more than just a way companies pay their workers. Investors can buy and sell stock options to hedge their portfolio, generate income from covered calls, and speculate on short-term moves in stock prices to earn higher returns on their investment. As some brokers prioritize options trading over other types of investing, it's important to pay attention to the details before opening a new brokerage account. Let's review how Interactive Brokers compares for investors who want to use stock options in their portfolio. Standard trading commissions. Interactive Brokers uses a variable commission schedule that makes it stand out in the world of stock and options trading. Rather than pay a mostly fixed rate, Interactive Brokers' commissions vary by trade size and the value of each option. Stocks and ETFs. $0.005 per share ($1.00 minimum) Options worth $0.10 or more. $0.70 per contract ($1.00 minimum) Options worth more than $0.05 but less than $0.10. $0.50 per contract ($1.00 minimum) Options worth less than $0.05. $0.25 per contract ($1.00 minimum) Data source: company website.

Importantly, Interactive Brokers also offers a variable commission schedule under which options, stocks, and ETFs can be traded at even lower prices. Commission prices generally decline with volume, which is advantageous for its most active clients. Learn more about special offers for opening a new account, which can add up to thousands of dollars in value in the form of commission-free trades and cash bonuses. Multi-leg options and exercise and assignment fees. While it's relatively straightforward to buy a call or put option, some strategies require simultaneous orders of different options contracts. The long strangle option method requires the simultaneous purchase of a call and a put option, for example. Depending on your broker's commission schedule, these options trades can become costly, and quickly. Type of Transaction. Fees and Commissions. Buy to close fee for low-cost options. Standard commission schedule.

Data source: company website. Interactive Brokers' commission and pricing schedule is designed to benefit traders who make use of complex strategies, or who intend to hold their options to exercise or assignment. The broker doesn't charge a fee when options are exercised or assigned, and its commission schedule offers lower prices for low-priced options contracts. It is one of a few brokers that don't charge for this occurrence. People who use covered calls, for example, would prefer a variable commission schedule like that offered by Interactive Brokers, as commissions decrease with the price of an option. When you write a covered call, you are effectively shorting an options contract. As the options contract declines in price, buying to close the position will incur a smaller commission. For example: You might pay $0.70 per contract to write covered calls worth $1.00 each. Later on, the option price might fall to $0.05 per contract, at which point you'd pay a commission of just $0.25 per contract to buy-to-close the contract. Similarly, those who want to buy low-priced puts or calls will pay a lower commission to do so, resulting in commissions that make up a lower percentage of the amount invested. Interactive Brokers' stock option commissions decline with the price of a put or call option. Image source: Getty Images. Options research tools. Although discount brokers are known for offering less in the way of research and support, many offer free access to research and trading tools designed to help their investors make better investment decisions.

Many of these tools come free just for having an account. Interactive Brokers' Options Analytics tool allows you to explore an options contract from the perspective of profitability, max gain or loss, and view the "Greeks," which are automatically calculated next to each contract. These tools can be especially useful for investors who use more sophisticated options strategies. Minimum deposit requirements for options trading. Interactive Brokers currently requires a $10,000 minimum deposit for most investors, although this minimum is decreased to $5,000 for IRAs, and $3,000 for individuals who are 25 or younger. After making a minimum deposit, investors will be able to complete basic options trades. More complicated strategies and those that involve higher risk -- selling naked puts or calls -- will typically require a higher equity balance, and minimums are subject to change depending on the brokers' assessment of the risk of each trade. Keep in mind that Interactive Brokers waives minimums on accounts with a balance of $100,000 or more. However, for those who don't meet the minimum account balance requirement, Interactive Brokers requires that traders generate at least $10 in monthly commissions. Accounts that don't meet the minimum trading volume requirement will have their monthly commissions automatically rounded up to $10 during that month. For example: A client who spends $5 on commissions in one month will see an extra $5 fee added on during the month to bring that person up to the minimum commission level. This may make it less attractive to people who don't intend to keep a high balance or don't anticipate trading frequently.

Interactive Brokers as an options broker. Interactive Brokers is designed with the active trader in mind. Its commission schedule favors active options traders, as well as those who hold options until exercise or assignment, as it doesn't charge a fee for either event. That said, its higher minimum deposit requirement as well as inactivity fees ($10 minimum monthly commissions) may not make it cost effective for the infrequent options trader. To be clear, The Motley Fool does not endorse any particular brokerage, but we can help you find one that is a good fit for you. Check out the Fool. com Broker Center to compare several brokers all on one page and to see if you qualify for extra perks just for opening an account. Jordan Wathen owns shares of Interactive Brokers. The Motley Fool recommends Interactive Brokers. The Motley Fool has a disclosure policy. I think stock investors can benefit by analyzing a company with a credit investors' mentality -- rule out the downside and the upside takes care of itself. Send me an email by clicking here, or tweet me. Interactive Brokers Review – Everything You Need to Know. Interactive Brokers Review. Interactive Brokers is an online discount broker with a wide array of day trading tools and resources.

The company provides access to trading platforms, impressive short lists, and stock market education. Interactive Brokers is one of the more advanced discount brokers with access to more routing options and better borrow lists. About Interactive Brokers. Founded in 1977, Interactive Brokers (IB) is one of the largest and oldest online brokers with market making and trading access to almost 120 worldwide markets. IB is a discount online broker that caters to retail investors, traders, independent investment advisors and portfolio managers. Traders can trade stock, option, bond, mutual funds, futures, commodities and forex markets through the online, mobile and standalone TWS platform. IB requires $10,000 minimum despoit in cash or securities to initially open a non-IRA account. IRA accounts require a $5,000 minimum deposit. For individuals under 25 years of age, the minimum is $3,000. Margin accounts need to maintain a minimum balance of $2,000. Commissions and Fees. The commission structure at IB can be complicated depending on what financial instruments you trade. Stocks and ETFs trading.

IB gives the two commission pricing structures. The Fixed commission is a per-share pricing model that charges $0.005 per share and a $1 minimum commission per order. This includes IB commissions, exchange and most regulatory fees. However, transaction ECN fees are not included. For example, ARCA exchange transaction fees are an additional $0.003 per share for removing liquidity and $0.0021 rebate for adding liquidity. However, IB states they may apply some or part of the rebate back to the customer. The Tiered pricing structure scales the commissions lower based on total monthly trading volume. The commissions start at $0.0035 per share and $0.35 minimum commission per order for the first 300,000 shares total trading volume. Exchange, clearing and regulatory fees are added onto the costs. The commission fee starts to shrink with more trading volume. For example, for the trading volume from 300,001 to 3,000,000 shares, the commission drops to $0.002 per share and then $0.0015 from 3,000,001 shares to 20,000,000 shares. From 20,000,001 to 100,000,000 shares of volume, the commission drops to $0.001 and then $0.0005 per share for the portion of shares over 100,000,000 for the month. Traders who routinely provide liquidity and trade over 3,000,000 shares a month will see the difference in commissions. Traders who don’t surpass the 300,000 shares a month may be better off with the fixed commission rate.

IB charges $0.70 per contract plus exchange fees if the premium is larger than $0.10 and $0.50 per contract plus exchange fees if the premium is between $0.05 to $0.10 and $0.25 per contract plus exchange fees if premium is less than $0.05. All options trades have a $1 minimum commission. There is a $10 minimum monthly inactivity fee and $20 minimum fee for accounts under $2,000 that can be waived if the account generates as much in commissions. Accounts over $100,000 have no monthly inactivity fees. IRA accounts are charged a $7.50 quarterly fee. IB can be accessed through their website, mobile or standalone desktop TWS (Trader Work Station) software, which should be used by any serious trader. The TWS platform can be set-up with the classic mosaic screen that just shows stock quotes with simply bidask click and execute orders. I like to open up the integrated stock windows, which give me Level 2, Time and Sales as well as a single time frame chart. I use the chart on a 1-minute time frame to just gauge the candlestick patterns. The mobile app is surprisingly feature-rich with access to realtime quotes, basic charts and news. It even includes streaming level 2 with a simple order execution interface. Executions and Routes. IB provides point-and-click direct access order routing from the level 2 quote windows. One of the best features is the hidden orders option that lets you mask your limit orders on level 2 for almost all stocks.

You can also set it for reserve mode where it only shows decoy size while hiding the true size. This works great and helps to prevent others from seeing your sizing if you are trying to unload larger shares. I also like the smart routing feature, which is standard for executions. The TWS smart routing is one of the best automatic routing algorithms I’ve used and is amazingly fast with fills without making too much market impact. It will actually route to dark pools when available. IB does a great job of updating the available short shares for any stock that is placed on a watchlist. The total available short shares inventory updates throughout the day, which is incredibly helpful. I make sure that I don’t stick around too long in a short position when the available shorts inventory is small (under 100,000 shares). These stocks are very susceptible to short squeezes when short-sellers can’t average their short positions and may incur forced liquidations from intra-day margin calls. Intra-day Margin Calls and Forced Liquidations. IB is very strict with risk controls. They can adjust maintenance margins mid-day for stocks that many be exhibiting extreme volatility (IE: short squeezes). They are also quick to administer forced liquidations on intra-day margin calls especially on short squeezes.

This is very dangerous for traders who don’t stay on top of these margin changes intraday. For this reason, it’s always prudent to check the available short shares for any stocks you are trading. Interactive Brokers has many basic platform tutorials and manuals that explain all the functions in a straightforward manner. As for actually courses and trading education, they have very courses through their Traders’ University section, which is a compilation of basic courses on trading strategies presented through various experts and vendors. Traders can register to sign up for live scheduled webinars presented by IB staff or view archived webinars. Once again, these are all basic tutorials on how to use the platform. Don’t expect specific methodologies given away for free from any online broker. Additional Benefits and Features. For traders who like to pick their entries and exits ahead of time, the bracket orders are excellent. TWS lets you place bracket and conditional orders to trigger at limit prices and then execute at limit or market prices. The hot keys are versatile and easily programmable.

I also really enjoy the ability to add custom sound effects through the global settings for different actions like a lightsaber noise when a trade is executed or a “Goodbye” voice when an order if cancelled. Sound effects help me tremendously by freeing up my eyes to properly monitor charts, news and activity feeds throughout the day. If you haven’t tried using sound effects, I highly recommend them. Otherwise, you have to be glued to the screens until your orders are filled. Its suprising how many platforms don’t allow for customized sound effects? TWS also provides subscriptions to NYSEARCA Open Book and Nasdaq Total View quote feeds, which is very useful for scalpers to determine the depth of the bids and asks. What Type of Trader is Interactive Brokers Best For? The TWS is best for seasoned retail traders, professional advisors and portfolio managers that know what they want and what they are doing. There isn’t a whole lot of hand holding on this platform. The smart routing and invisible orders are the two best perks of the platform in addition to customized sounds and easy hot-key programmability. Traders who desire to perform their own direct access order routing and collect pass-thru rebates will be frustrated being forced to use the smart routing only and the ambiguous stance pass-thru rebates. IB states they may apply some or all of the pass-thru rebates back to the client. However, traders can configure smart routing to only route to exchanges meeting certain requirements, dark pools, max rebates or based on price improvement and preferred fill requirements. For most traders, this is good enough.

Manual order routing can be more tedious than beneficial especially when speed is a factor. Algorithmic traders tend to prefer the direct access order routing more so than retail traders. TWS can also accommodate program trading through their API. Interactive Brokers is a professional’s online trading broker. They are one of my favorite brokers for the efficiency, stability and simplicity of order fills once you get acclimated . Interactive Brokers Review. While Interactive Brokers comes with a $10,000 minimum funding and is not suitable for casual investors, it leads the industry in international trading and low-cost commissions desired by professional traders. By Blain Reinkensmeyer February 21st, 2017 Updated: December 18th, 2017. Founded nearly 40 years ago, Interactive Brokers (IBKR) is known for its industry-leading commissions schedule, margin rates, and support for international trading. By presenting one universal portal through which clients can trade on more than 100 market centers in 24 different countries, and deal in stocks, options, ETFs, futures, forex, bonds, and CFDs, Interactive Brokers has something to offer any seasoned trader who has at least $10,000 ($100,000 for margin accounts). With its core clientele being professional traders and institutions, providing the lowest commissions schedule available is critical for Interactive Brokers.

In our rigorous assessment, they deliver without question. First, it is important to note that Interactive Brokers does not accept payment for order flow, a key element in providing quality order execution. In our assessment of order execution for the 2017 Review, the broker came second behind Fidelity. For more, see our guide to order execution. Overall, Interactive Brokers unquestionably reigns supreme in the category of commissions and fees. Interactive Brokers also leads the industry with the lowest margin rates, which vary from 1.91% down to a staggering 1.41% for clients who hold more than $1 million with the brokerage. Speaking of equity trades, rates start at $.005 per share with the fixed-rate structure ($1 minimum). Alternatively, the tiered-rate structure, which starts at $.0035 per share, can be used, but routing is factored in, which can add or reduce the cost, depending on whether the client is removing or adding liquidity. Some math will reveal that for small order sizes, i. e., several hundred shares, Interactive Brokers is a fantastic deal. Trade several thousand shares or more though, and Interactive Brokers quickly becomes pricey.

Options are $.70 per contract with no minimums, and active options traders will enjoy the fact that exercise and assignments are practically free. Like tiered equity trades, per contract fees tier down as total shares traded increases. New and casual investors should be aware of the miscellaneous fees and minimums charged by Interactive Brokers. Put simply, spend at least $30 in commissions each month and you are in the clear otherwise, charges for inactivity can reach up to $20 per month. While far lower than the minimum spend required at say Lightspeed, it is still something to keep in mind. A full breakdown can be found on the Commissions & Fees notes further down the page. Overall, Interactive Brokers unquestionably reigns supreme in the category of commissions and fees. The flagship platform Interactive Brokers offers is its Trader Workstation (TWS). The platform is set up to trade everything under the sun, including global assets, and is designed to be used by traders with ample market experience. The default experience is called Mosaic, while clients also have access to view what is called Classic TWS (the original version of the platform). Because Interactive Brokers supports so many asset classes, it had to rethink its position and watch list management. What they came up with, which takes some getting used to, is extremely efficient. Type in any stock symbol and you will see a summary of available securities. Watch lists can include anything from equities to individual options contracts, futures, forex, warrants, you name it. I preferred the Mosaic view, although I know many long-term clients prefer the Classic view.

Watch lists can have up to 338 different columns, and to say they are fully customizable is truly an understatement. No broker offers an experience like TWS. Beyond learning how to effectively build watch lists, I found only one usability disadvantage that comes from supporting so many investment types, and that is pulling up quotes or trading securities. Even typing in AAPL for Apple yields a slew of possible matches, which can be overwhelming for non-professionals. Turning to charting, technical traders will find nearly everything they need. One hundred and twenty four different studies are available to be added to any chart, and customizations cover every possible option. Note though, while 124 option indicators are impressive, TWS still trails the 270 and 370 offered by TradeStation and TD Ameritrade thinkorswim, respectively. Out of all the tools on TWS, I found the charts to have the most user-friendly interface. Considering the depth of functionality, I was surprised to find only eight tools for mark ups. While the basics are present – trendlines, notes, zooming, Fibonacci, etc. – important tools such as support and resistance lines, channels, and the like are missing. Pickiness aside, the charts on TWS have all the core functionality required to succeed: viewing historical trades, alerts, trading off charts, comparisons, and index overlays, to name several. There is no question TWS is built for professional trading as there are, for example, a staggering 63 different order types available for clients to use, by far the most in the industry.

Alongside charts, TWS is also home to a variety of other tools not covered in this review. Algo trading, Options method Lab, Volatility Lab, Risk Navigator, Market Scanner, method Builder, and Portfolio Builder, to name a few, are all available within TWS. There is no question TWS is built for professional trading as there are, for example, a staggering 63 different order types available for clients to use, by far the most in the industry. After assessing TWS across 58 individual variables, the platform easily ranked among the best in the industry. Certain tools, such as charting, lack depth compared to those the top-ranked platforms use however, overall, TWS delivers. Lastly, for clients traveling without access to their desktops, or for clients looking to simply monitor their portfolio, place trades, and view watch lists, IB WebTrader is a good solution. After loading WebTrader, I found a detailed summary of my portfolio balances and margin requirements alongside a full spectrum order ticket. When I say full spectrum, I mean trading for all asset classes is supported. The only limitations are algo orders and other advanced order types. Pulling quotes will provide only a basic high-level summary, an extremely rudimentary chart I recommend be avoided altogether, and an option chain.

Basic stock screening is also present alongside a high-level international market summary tab, Market Pulse. Customizations are essentially non-existent throughout, although streaming real-time quotes are found throughout, which is essential. Bottom line, the focus of WebTrader is to monitor portfolios and manage orders it is not designed to be used as a standalone. It accomplishes these functions well. Being a professional trader-focused brokerage, Interactive Brokers is not known for its research offering. Bundled with the platform clients will find what they need to conduct mostly thorough research for stocks, decent research for ETFs, and little to no research for Mutual Funds. That said, Interactive Brokers does offer a variety of third-party provider feeds a la carte, including Morningstar, which are available for a monthly fee. Mobile trading with Interactive Brokers is mostly an enjoyable experience. All devices are supported including iPhone, iPad, Apple Watch, Android smartphone, and Android tablets. When testing the iPhone app, I found the app had everything I needed to trade effectively.

When testing the iPhone app, I found the app had everything I needed to trade effectively. From lightning quick streaming data to full-featured order entry and portfolio management, all the main criteria were quickly checked off. The drawbacks with the experience center around usability. For example, the charts have 68 different optional studies, which is great, but the charts are not flexible. If you set the settings to view a daily chart of the past six months, that’s the only view you will get until you adjust the settings there is no panning. Also, two-factor login with Touch ID is supported, but you have-to use a secondary IB Key app instead of simply Touch ID logging into the actual app as you load it. Other drawbacks include a lack of stock andor index comparisons in charting, no customizable home screen, no streaming live TV or videos on demand, no Level II quotes, and only being able to set basic stock alerts without push notifications support. You also cannot perform ACH account transfers within the app. Cons aside, I found the app had a handful of nice features not often found across the industry, including custom screening scanning and after-hours charting. As stated previously, mobile trading with Interactive Brokers is well supported across all devices and has the core functionality required by traders to go about their business and trade effectively. One notable weak spot in Interactive Brokers’ offering is its customer service. During testing for our 2017 Review, we found support to be consistently poor regardless of the channel being used: phone, email, live chat. The broker placed 15th out of 16 brokers we tested.

While Interactive Brokers does not cover advisor services and institutional asset management, the company is unique in that it offers what it calls the Investor’s Marketplace. The tagline of the service is to “Find the right service provider for your trading needs.” For example, I presented myself as “an individual investor seeking an advisor” and a list of several hundred advisors popped up. Hedge funds, research and technology providers, administrative service providers, and the like are all included. With industry-leading commission rates, more than 50 different order types, staggering low margin rates, support for every investment imaginable, trading in more than 100 international markets, and a robust trade platform suitable for any professional, Interactive Brokers is a great choice for investors who fit into its target mold. For our 2017 Stock Broker Review we assessed, rated, and ranked sixteen different online brokers over a period of six months. In total, we conducted 349 customer service tests, collected 5,277 data points, and produced over 40,000 words of research. How we test. Interactive Brokers Review Part 2. Read This Free Report. Volatility Trading Made Easy - Effective Strategies For Surviving Severe Market Swings. Following on from an earlier post, I wanted to do a more in depth review of Interactive Brokers.

As I mentioned here I have been extremely happy with them since making the switch from TD Ameritrade. You should seriously consider switching to them, read on to find out why. Interactive Brokers, or IB as they are commonly known, were one of the early players in the electronic trading sphere. They currently offer trading capabilities on just about any market with a very technically advanced trading platform known as the Trader Workstation. So far, I have only used the platform to trade stocks and options, so that will be the focus of this article. Let’s take a look at some of the pros and cons of Interactive Brokers and review some of the features available on their platforms. * The most obvious benefit of IB that springs to my mind is the commissions. IB have really low commissions on stock and option trades. You’ll be looking at around $1 per contract for options. * As mentioned above, their trading platforms are very advanced, so you are able to easily enter complex option spread trades as one order. * The reporting is amazing, and goes in to great detail (sometimes almost too much), in terms of your account, trade history, fees, commissions and profit and loss. * Security is another great benefit of using IB, as each account has the option to add a security token in order to greatly decrease financial fraud or your account getting hacked into. * One thing that most impressed me about IB, was the ease in which you can open an account. I have had some pretty bad experiences with other brokers in the past with opening or transferring account, but with IB it was a breeze.

Once I transferred my account from E-trade to TD Ameritrade and the process was an absolute nightmare that took over 2 months, during which time my positions were frozen and I couldn’t close any of them out. With IB the process took about 1 week and the other great thing is that I did it 100% online. All the forms can be filled in online and even signed by typing in your name. This was amazing as i really hate filling in pages and pages of documents which is usually what it takes. They are also one of the few brokers that allow residents of the Cayman Islands to open an account. Probably not that relevant for most people reading this, but yay for me!! * There are a number of regular free webinars. There are a multitude of recorded webinars and each month there are around 6-7 live webinars. I’m sure I don’t know half of the things I could be doing on the system. There is also a trader’s university so you can educate yourself in trading new asset classes or instruments. * Most mainstream brokers such as TD Ameritrade, Scottrade, E-Trade and Charles Schwab are focused mainly on the US markets, whereas with Interactive Brokers you can trade global markets. With IB you can trade stocks, options, forex, bonds, futures, commodities, warrants, structured products and mutual funds from the one account. In total there are over 90 global markets you can trade. * IB also provide excellent research for those traders looking to get involved in the commodity markets. * Given that IB’s platform is fairly advanced and geared more towards professionals, it can perhaps be a bit daunting and confusing for a lot of retail investors.

Thankfully, as mentioned above there are a lot of free tutorials and live webinars. * From my experience their customer service has left a little bit to be desired. They do have a live chat support system, but occasionally it can take 5-10 minutes for someone to join your chat and even then they may not be able to answer your question. I have had a couple of instances such as this where I waited for an extended period of time, only to be transferred to another chat room as the customer service agent didn’t know the answer. When he moved me to the other room, the chat froze and I had to close it down. This has happened to me 2-3 times. I guess this is the compromise you make for a low commission structure. * For non-IRA accounts, the minimum deposit to open an account is $10,000. This may prove to be restrictive for some people especially those just starting out. * IB’s charting package, while sufficient, does not have the class and sophistication of other packages. It has all the bells and whistles you need, but it is just not quite as slick as the charting packages offered on other platforms such as Think or Swim.

However, one great feature of the chart package is that you can place trades and set stop loss levels directly on the chart screen with 2 mouse clicks. It’s really easy and allows you to get in and out of trades super quick, which is great if you are looking at doing some day trading. * As another compromise for the low fee structure, there tend to be a lot of other expenses that are charged by IB. These can be things such as order cancellation fees, but they do also charge for certain types of market data and news services. * This isn’t a huge issue, but sometimes the Trader Workstation, which is a Java application, can take a little while to load. This is the main trading platform at Interactive Brokers, although they also have a slightly easier to use WebTrader platform. You are able to place virtually every type of order through their software and their system is excellent at tracking trades in your portfolio. The main feature of the Trader Workstation is speed. The platform was designed for quick placement of trades with programmable “hot keys” and one-click order entries. You are also able to trade stocks, futures and options from the same platform. Value for money – 5 Stars. Platform usability – 4 Stars. Platform functionality – 5 Stars. Customer Service – 3 Stars. Overall – 4.5 Stars.

If you’re a moderately experience trader, I think you will love Interactive Brokers. Beginners may find it a little difficult, but given the amount of Webinars and the detailed help section on the website, you should be able to get the hang of it fairly quickly. There is a lot of functionality that is not available on many of the mainstream brokers and the commissions structure is probably the best you will find. Overall, I highly recommend them. 12 Comments. Wow, great info, very detailed. I had not heard of Interactive Brokers before. I’m currently with E-Trade, how easy is the process of moving over existing holdings? Would I have to sell all my positions? I don’t use CHAT with them but I have called them a good many times and always found them to be very helpful and polite. Thank Pat.

I haven’t called them often, maybe I will have to try that next time. I don’t use CHAT with them but I have talked with them many times and they were always very good and polite. l. If you trade option spreads there are no cancellation fees. Ie an Iron Condor would not be subject to a cancellation fee. If you trade single strikes then you will be charged to modifycancel your order. I actually found the commission to be on the high side, especially when you are taking liquidity. I would use optionshouse or eoptions if you want to save on commissions. I’m new to IB and their commissions are very confusing. I tried a narrow butterfly trade on SPX with total of 40 contracts. I’m supposed to receive USD500 in credit but my account change show only USD50 credit. Which means the fees comes to usd450?? That commission seems much too high so there must be something else going on. Can you send me a screenshot of the trade log? email protected Also, what was the bid ask spread? Did you enter it as a limit or market order?

I’ve verified Interactive Option broker terms of trading. All my withdrawal requests cancelled by broker. Stay away from that crap company ! Their chart package is quite simple… but the commissions are low. I’m confused about their cancellation and modification fee. Does it apply to options? How much are they? I can’t seem to find info specific to options. I don’t think they charge any, but I could be misunderstanding what you’re asking. Leave a Reply Cancel reply.

10 Part Iron Condor Course. Access My Complete Trading Blueprint. Closed my Oct BB (a few moments ago) for 34% profit…that is the best of the 3 BBs I traded since Gav taught us the method…so, the next coffee or beer on me, Gav 🙂