Interactive Brokers Review
Interactive Broker (IBKR) is a major brokerage provider from America. Their overall history as a company dates back to the 1970s, although their activity as an online provider is much fresher. The earliest account of this website is as old as 2011, and it’s hard to find older information, so we’ll have to assume that it’s at least 10 years old.
There are currently 23 currencies available for trade, but there are more assets than just that. The list includes: Forex, shares, options, futures, ETFs, mutual funds, gold, and also less significant products. It’s one of the biggest Forex providers, to be concise.
Whether or not they are still relevant or effective is up to debate, however. Let’s go through their features and try to form an opinion.
The broker has two account types for you to pick. They aren’t too different, except for fee policies and smaller changes.
You should not that a local fee policy overall is pretty complex. There are three types of commissions:
- Fixed – the same fee all the time (within the bounds of an asset);
- Tiered – the fees decrease as the volume of your trading increases;
- Free – almost no fees.
Which type to pay is not up to you. Each asset type (and even sub-types) has its own commission type. Even though some will logically have the same commission plans, you should be attentive. And, by the way, only US stocks are Free (and only on IBKR Lite), which means you don’t have to pay fees for them, except for some transaction payment.
Here’s a brief description of their offers:
- IBKR Lite. It’s meant for retail (or small-time) traders. With it, you get to trade in US stocks and US ETFs for free, while it’s fixed or tiered for others. All the other products are also Fixed, except for Forex and bonds;
- IBKR Pro. This one is different in that almost all products can be traded in Tiered, which suits traders who prefer to deal in large volumes. Some products are also Fixed, but the Tiered is given preference, of course.
The only other worthwhile difference is the addition of several night trading hours to the Pros – they get to start at 4 am (ET), three hours earlier than Lites. Basically, they get the first say for the day. Considering that IBKR is a rather large provider, it means a lot.
Interactive Brokers are known for being an affordable broker. Even though you’re advised to be aware of the commissions for the product you’re trading (for instance, Canadian and European currencies may have different pricing rules), the fees alone aren’t too scary.
You’ll still have to pay spreads, and they don’t say anything about them. There’s not even a line in pricing about them, so you’ll have to use common sense as well as trust the broker not to swindle you with the widest spreads possible.
The commissions start at $0, thankfully, and they don’t usually excel even $1 per asset (in reality, they are much smaller). When you trade lots in one go, the fees will definitely gather into a sizeable sum. But even then, it won’t feel bad at all.
There are other fees, of course: transaction, conversion, withdrawal and maintenance fees are chief among them. Even with them, however, IBKR still remains one of the cheapest brokers in this size category.
As far as trading software goes, IBKR is very rich and intriguing, but also slightly disappointing.
It’s rich and promising because they added lots of various trading platforms, each with a slightly different approach. Some have fewer tools, some are cleaner. Still, every single one of them has tons to offer.
The broker itself is disappointing because they don’t have any trading interfaces people are already familiar with.
There is no MT 4 or 5, no cTrader or other globally accepted platforms. All they have are their own products, which, while effective enough, need to be acquainted with and mastered.
It is their own decision to not add even MetaTrader 4 – by all accounts, the best and most wildly accepted trading platform in the world. It’s understandable why they did that – after all, fewer customers would use their own software if they added something as popular as MT 4. It’s still slightly irritating.
But enough of its rant – let’s see what these interfaces are all about. There are 4 in total, and each has its own quirks.
The Client Portal is a Web application – their main trading UI used by most investors here. It has a decent number of indicators and analytical tools – enough to let you do your job with comfort and precision, at any rate.
However, it’s also pretty light (especially if you compare it to the other main trading platform on IBKR). It barely has even half the tools, features and capabilities this broker has in store. Oh, the didn’t omit anything crucial. Portfolio management, simple orders, signals and market data are all there, they even added paper trading.
There are no advanced orders, virtually no algorithms and you can’t play around with the interface. Basically, it’s just your standard toolbox. You can wire the news to your display and manage your assets alright, but nothing too complex – lest the baby gets hurt.
There is a massive advantage, though (besides being fit for entry-level and regular investors alike). The design and architecture are extremely clean and friendly. Everything is stored where it’s supposed to be and immediately accessible.
Plus, it’s one of the platforms that lets you play around with the IBOT – this broker’s online helper. You can literally talk to it, give it commands and ask its opinion. It will analyse your positions, give you insight and advise you on what to do next. Neat.
Client Portal is available for Web use only.
In comparison to the previous product, this one is brutal (or awesome, depending on your prowess as an investor). It is a much more advanced, versatile and complex piece of software.
Workstation has nearly all the tools, features and indicators on IBKR. Although the Client Portal is used by most people, Workstation is their chief creation. It is confusing and will drive you insane unless you know how to operate advanced trading platforms. But if you can operate it, it’s very much worth it.
It has advanced orders, algorithms, exquisite portfolio management tools, risk assessment tools, alerts, and more. You can even trade a few more product types (the extremely complex ones).
The cherry on top is the customizable display, of course. It’s called a Mozaic, and you are able to change, swap, hide and place whatever details you want. There are many possibilities: charts of all types, news, market data, watchlists, your history, your portfolio menu, insights from Reuters, Dow Jones and who-knows-else. You can edit windows precisely to your liking and build your own trading experience and routine.
The problem is obvious – the design is practical, but it’s definitely not friendly or clean in any meaning of this word. Numbers and words go everywhere. Unless you built it, you won’t soon understand what goes where.
Accessing tools and placing orders is possible. If you’re first time here, however, it may take some time for you to get a grasp of things. It is loosely based on MT 4, so, if you’re a seasoned user and modified your MT 4 mercilessly (like many veteran investors do), it’s going to be a much smoother sailing for you.
It’s also on this platform that you get to use their Borrow Stocks innovation – you basically allow people to lend your stocks to short them. You’ll get interest and, theoretically, compensation for that.
Workstation is available for desktop and Web use.
A trading app is a simple concept, and it’s not any different with this broker. Trading apps are used away-from-go or away-from-PC if you want to make some urgent trades quickly.
IBKR App is basically a mobile reinvention of the Client Portal. The design and most features and tools are shared by the two, but the former is also rather simpler and even cleaner, both in looks and in practice.
The tool array isn’t really any different from the Client Portal. There is a unique feature that allows you to somewhat customize your pages – rearrange where the tickets are and so forth.
The tickets are how you trade your assets here. Each ticket has basic information (prices, rough trend movement, bid/sell buttons. If you click on one, you’ll get redirected to a concise chart that allows you to monitor your positions better, analyse their progress, and so forth.
It might not be too user-friendly or easy to navigate around, but you’ll get used to it. Another flaw is that it often breaks down and doesn’t let you authorize, which defeats the point of being able to make urgent calls.
You can download it on Google Play or App Store.
It’s a less conventional way of trading, and not really a trading platform. It’s a tool kit that allows you to build your own software based on other platforms and additions solutions specifically for the industrious people who choose tot build their own trading toolbox from scratch.
Obviously, if you can build anything with it (requires coding), it’s going to be even more versatile and customizable than even Workstation. Of course, somewhat like working with Workstation, it requires extensive knowledge. Unlike with Workstation, you’ll have to know at least some coding.
IBKR doesn’t end there, as you may suspect. There are other services that allow you to improve your results, such as educative materials or account management.
However, the most prominent of these services is the portfolio management.
It’s very extensive, and you can go to great lengths to make your portfolio work as effectively as possible.
PortfolioAnalyst, for instance, is an efficient tool – an algorithm that analyses your portfolio (your collection of shares), estimates its effectiveness and gives you precise numbers and conclusions of what you could do better. If you trust robots to improve your trading experience, this one’s for you.
Interactive Advisors, on another hand, is a completely different approach to portfolio management. It doesn’t just improve your collection – it’s a service that allows you to entrust most of your management to specialists. You’ll of course know the details and be in touch with your advisors.
If you trust experienced investors, even though they are strangers to you, to control your equities, then you may like it. It’s much more prudent and comfortable to just use algorithms that copy other people’s portfolios (with their consent, naturally). Many other brokers have this service – not IBKR, though.
There is also an integration feature that gives you the ability to use third-party resources (tools, services, software) to manage, control and use your portfolios. If you have any such instruments in mind, it’s likely you’ll be able to use them even if they aren’t present at Interactive Brokers.
Interactive Brokers is an innovative company. They have several thrilling solutions packed with numerous useful tools, as well as impactful services. Anyone will be able to set up a trading routine they like most. Overall, it seems like a great broker, at least from the practical sense.
However, they seem to be having quite a lot of technical problems. It’s also not a secret that they’re practicing weird financial policies, which could result in your money loss without you even understanding what happened.
They are worth checking out, but, like any imperfect broker, you are advised to not commit too many of your money to trading with them. Other than that, feel free to roam around their products.