Interactive Brokers has a reputation as a comprehensive trading platform designed for experienced investors and investment professionals. Some of the features that distinguish this broker from its competitors are its extensive range of investment offerings, sophisticated trading platforms and minimal fees for margin trades.
More recently, Interactive Brokers has launched IBKR Lite, a service tailored to the needs of less-experienced or more casual investors. IBKR Lite offers commission-free trading of U.S. stocks and ETFs, plus more approachable versions of their well-regarded tools.
Interactive Brokersâ€™ IBKR Pro account is designed for active traders and investment professionals who need a platform for professional trading. The platformâ€™s fee structure is flexible enough to accommodate different trading volumes, while keeping costs to a minimum.
The addition of IBKR Lite to Interactive Brokersâ€™ product line-up gives beginning investors and more casual users with fee-free options for trading ETFs and U.S. stocks. It also lets them trade more complicated asset classes, like forex and fixed income, with different pricing options available.
Both account types offer margin trading, and both support a wide range of investments, giving you opportunities to build a portfolio beyond stocks or bonds with instruments like options, futures and forex.
No minimum trading commission for three months ($10 minimum per month after that)
|Stock trading fees||
|Option trading fees||
|Amount minimum to open account|
|Margin rate range||2.82% – 3.70%|
|Account fees (annual, transfer, inactivity)||
|Commission-free ETFs offered|
|Mutual funds (no transaction fee) offered|
|Mobile app||iOS, Android|
|Customer support||Phone, Chat, Email|
Interactive Brokers features a more complicated pricing scheme than many other brokers. You may choose either IBKR Pro for a full-featured investing experience, with fixed or tiered pricing. The IBKR Lite account has a user-friendly platform with both fee-free and commission fee trading options.
IBKR Lite allows for commission-free trading of U.S. exchange-listed stocks and exchange-traded funds. There is no minimum balance required for an IBKR Lite account and no monthly maintenance fee. In addition, IBKR Lite users can trade option, forex, fixed income and mutual funds, with commissions.
|Investment type||Pricing structure|
|U.S. exchange-listed stocks/ETFs||Commission-free|
|Other stocks/ETFs||Fixed fees|
|Options and Futures||Fixed fees|
|Fixed Income||Tiered fees|
|Mutual Funds||Fixed fees|
With IBKR Pro, there is no commission-free trading. All trades are subject to either fixed or tiered pricing. IBKR Pro accounts have no minimum balance requirement but there is a monthly maintenance fee. That fee is up to $10 per month, less any commission fees paid for the month.
|Investment type||Pricing structure|
|U.S. exchange-listed stocks/ETFs||Fixed or tiered fees|
|Other stocks/ETFs||Fixed or tiered fees|
|Options and futures||Fixed or tiered fees|
|Fixed income||Tiered fees|
|Mutual funds||Fixed or tiered fees|
With Interactive Brokersâ€™ fixed-fee pricing, investors pay just $0.005 per share, with a minimum order of $1. The maximum fee per order tops out at 1% of the tradeâ€™s total value. Using a $25 share price, trading 100 shares would result in a fee of $1. Trading 1,000 shares would increase the fee to just $5.
With tiered pricing, the commission fee is determined by monthly trading volume. At the lowest end, the fee amounts to $0.0005 per share and at the highest end, it comes to $0.0035 per share. This chart illustrates how tiered pricing breaks down:
|Monthly volume||U.S. stocks, ETFs, ETPs and warrants||Minimum per order||Maximum per order|
<= 300,000 shares
|$0.0035||$0.35||1.0% of trade value|
300,001 – 3,000,000 Shares
|$0.002||$0.35||1.0% of trade value|
3,000,001 – 20,000,000 shares
|$0.0015||$0.35||1.0% of trade value|
20,000,001 – 100,000,000 shares
|$0.001||$0.35||1.0% of trade value|
> 100,000,000 shares
|$0.0005||$0.35||1.0% of trade value|
A key difference to note between the tiered and fixed pricing is that tiered commissions donâ€™t include regulatory, exchange and clearing fees. The fixed pricing factors those fees in.
Interactive Brokers offers different trading platforms for IBKR Lite and IBKR Pro users. At the IBKR Lite account level, investors manage their accounts through the Client Portal or the IBKR mobile app. This level of access offers these capabilities:
The IBot chat feature is also available through the Client Portal and the IBKR mobile app. This feature allows you to trade stocks, options, futures, forex and bonds, get detailed quotes and account information and get answers to common trading questions quickly and easily. It can also be used with Facebook messenger and Alexa so you can access it virtually anywhere you are.
At the IBKR Pro level, investors have access to the Trader Workstation, which is considered a gold standard platform for professional traders. With this tool, you can trade stocks, options, futures, forex, bonds and funds on over 100 markets. Some of the key features of Trader Workstation include:
Thereâ€™s also IBKR WebTrader, which is an HTML-based trading platform. WebTrader offers a more scaled-down range of features for traders who want a streamlined approach or for those who trade from behind a firewall.
The most advanced traders can take advantage of IBKR APIs. This allows you to build your own trading application or software.
Note, youâ€™re not limited to choosing one platform over another. You can use one or all of the various trading tools at your disposal within your IBKR Pro account.
Interactive Brokers is well-known for offering an extensive range of tradable assets. The types of securities you can trade through the platform include:
Both IBKR Lite and IBKR Pro members can trade on margin, and Interactive Brokers charges some of the lowest rates on margin loans of any brokerage. The platform uses a blended rate, based on margin balance.
As of writing in October 31, 2019, a $10,000 margin loan for an IBKR Lite account was subject to a blended APR of 4.07%. A $100,000 balance in an IBKR Pro account, on the other hand, was subject to a blended APR of 3.07%. Interactive Brokers offers a simple calculator to help traders estimate their blended rate for margin trading.
Interactive Brokers offers an impressive number of educational resources for traders. Tradersâ€™ Academy, for instance, features complimentary courses on a variety of topics, including asset classes, foreign currencies and how to use the Trader Workstation to maximum advantage.
The IBKR education hub also includes both live and pre-recorded webinars, visual tutorials, calculators, widgets and a traderâ€™s glossary. IBKR Traderâ€™s Insight offers up-to-date discussion of the latest market trends and news while the IBKR Quant Blog features posts on advanced investing topics. Inside TWS Mosaic, Pro users can also get updates and analysis from platforms such as Reuters, Dow Jones, Morningstar and Zacks.
Interactive Brokers is trusted by many professional investors, and itâ€™s their go-to broker. The company is focused on protecting your account and uses two-factor authentication when signing you in to prevent unauthorized access. Plus, accounts are protected by the Securities Investor Protection Corporation (SIPC), which guarantees accounts up to $500,000, including a cash-only limit of $250,000, in the event the broker cannot return the assets. Interactive Brokers goes a step further, though, for additional coverage of up to $30 million with Lloydâ€™s of London, with a cash sublimit of $900,000. These guarantees donâ€™t protect you against losing money in the market, of course.
Interactive Brokers brings a lot to the table, especially in terms of low costs. That extends to not only trading stocks but also options and the very attractive margin rates. For pros and active traders who know what theyâ€™re doing, Interactive Brokers is a great choice, especially now that account minimums have been eliminated. The option to trade U.S. exchange-listed stocks and ETFs in the IBKR Lite account allows it to maintain pace with its commission-free brokerage competitors.
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