Interactive Brokers rating

Interactive Brokers Review 2020


Interactive Brokers Pricing and Minimum Deposit


ProductPrice
Stocks and ETFs $0 for IBKR Lite account; $0.005 per share with $1 minimum, 0.5% of trade value maximum for SMART routed orders for IBKR Pro account
Options $0.70 per contract if premium => $0.10; $0.50 per contract if $0.05 =< premium < USD 0.10; $0.25 per contract if premium < $0.05 + exchange fees. Minimum $1 per order.
Mutual funds $14.95 (minimum size on initial fund order is $3,000, subsequent minimum order size is $100)
Corporate and municipal bonds0.1%* face value (10 bps) if <= $10,000 face value; 0.025%* face value (2.5 bps) if > $10,000 face value
Treasuries (bills, notes, bonds)0.02%* face value (2 bps) if <= $1,000,000 face value; 0.002%* face value (0.2 bps) if > $1,000,000 face value; $5 minimum
Metals0.15 basis point * trade value; minimum $2; storage cost 0.10% per annum
US-future and future options$0.85 per contract
Forex0.20 basis point * trade value if <= $1,000,000,000; minimum $2

Investments stocks, options, mutual funds, ETFs, bonds, futures, currency transactions, US SSFs, EFPs, metals
IB minimum deposit to open account $0 for cash account, $2,000 for margin account
FeesInteractive Brokers fees
Promotion linkInteractive Brokers promotions


Interactive Brokers Trading Review


An IBKR Lite account from Interactive Brokers comes with some (but not all) of the broker’s trading tools and an unbeatably low $0 pricing schedule on stocks and ETF's. Are the software sacrifices worth it? Let’s take a look.


Bulls Spotlight...


IBKR Lite customers now have access to Trader Workstation. When Interactive Brokers launched IBKR Lite, they didn’t include their desktop platform in the low-cost package. But the firm recently added it.

No $10 minimum monthly commission requirement. Interactive Brokers’ well-known requirement of at least $10 per month in fees does not apply to IBKR Lite accounts.


Bears Spotlight...


No FDIC-sweep program. Interactive Brokers does offer FDIC insurance for IBKR Pro clients.

Institutional clients don’t qualify for IBKR Lite. Only retail customers are eligible.

Extended hours are shorter. The pre-market session for IBKR Lite is 3 hours shorter than for Pro clients.


Customer Service


Interactive Brokers Customer Review

Interactive Brokers has associates on the phone from 8 o’clock in the morning until 8 o’clock in the evening, Eastern Standard Time. These hours are for the weekday only. On Sunday, the broker has a shorter session (1 pm till 7 pm); and the broker is closed on Saturday.

Inside our IBKR Lite test account, we found a human chat link. However, every time we tried it (and we tried on multiple days at different times), no one was available. A chat service with greater uptime is iBot, a robo chat system. It is always ready to answer questions, but when we asked it “does interactive brokers offer level ii quotes?” it didn’t understand the question.

Interactive Brokers does not have any branch locations, but there is a messaging hub on the website.


Available Investments


Interactive Brokers Investments Review

IBKR Lite clients get the same lineup of investments that IBKR Pro clients get. This smorgasbord includes forex, stocks, options, futures (including bitcoin futures and options on futures), exchange-traded funds, closed-end funds, mutual funds, contracts for difference, precious metals, equity options, warrants, and bonds.


Pricing Schedule


Interactive Brokers Pricing Review

If IBKR Lite and IBKR Pro accounts can trade the same investment vehicles, what is the difference between the two? Commissions.

IBKR Lite customers pay no trade fees on U.S.-listed stocks and ETF’s. They also get free real-time data on those securities, which Pro customers don’t get.

In return, Interactive Brokers does not offer SmartRouting to Lite customers. SmartRouting is the company’s computerized order routing system that looks for the best available price as quickly as possible.

Pricing on other securities is the same or similar for Lite accounts. Option trades range from 65¢ to 15¢ per contract, depending on the account’s monthly trade volume. There is a $1 minimum per order. If an option order is directly routed, the commission is $1 per contract.

Lite accounts also pay more in margin interest. Currently, the rate is 4.05% on all balance tiers. Lite customers receive less interest on free cash balances as well. The APY right now is just 0.05% on balances above $10,000.


Website Portal


Interactive Brokers Trading Review

The first trading platform Lite customers get is the client portal. Accessed through a browser window, Interactive Brokers does require a one-time access code sent to a mobile phone (in addition to a user ID and password).


IBKR Lite Portal Review


Inside our test account, we found a small watchlist in a compact window on the dashboard. This can be expanded into its own page with many more listings and more watchlists. There are account management tools, such as transaction history and a funds transfer tool.

Charting on the client portal is on a very elementary level. A graph cannot be displayed the width of the monitor, and there are less than 20 technical studies. There is no comparison tool, and 5 years is the maximum timeframe.


IBKR Lite Stocks Trading Review


Mobile App


Interactive Brokers App Review

IBKR Lite traders also get to use the broker’s mobile app. The order ticket offers some really nice features, including a chart on the side that can be swiped over the ticket. The chart shows up to 6 months of price history with 3 graph styles. Technical studies can be shown here as well.


IBKR Lite Mobile App Review


Order types include limit, market, stop, stop limit, trailing, on-the-close, and relative. Advanced order types are bracket, stop loss, and profit taker. Missing on the ticket is direct-access routing.

Charting on the mobile platform comes in wide-screen mode and actually provides more technical studies than the client portal.

One feature we really like about IB’s mobile app is that there is a simulated trading mode where beginners can get lots of extra practice. What we don’t like about it is the lack of mobile check deposit and streaming video news.


Web Trader


Interactive Brokers Trader Review

Although direct-access routing is missing on both the mobile app and client portal, it is available on WebTrader, another browser-based platform at Interactive Brokers. Unfortunately, IBKR Lite clients can’t use it.


Desktop Software


Interactive Brokers TWS Review

Although IBKR Lite accounts don’t get Web Trader, they do get Trader Workstation, IB’s best software program. It offers a lot of powerful trading features, not least of which is direct-access routing (finally). Other features available on the platform include Level II data, forex trading, time & sales info, iBot, and many other features too many to mention.


IBKR Lite TWS Review


Very advanced charting is finally available to Lite clients. Up to 40 years of price history can be shown. We counted no less than 100 studies. Drawing tools include arrows, Fibonacci lines, and text boxes.

The order ticket appears in the top-left corner of the platform. There are many advanced features here, including OCO (one cancels other) orders and hedge preferences.

A “check margin” button is on the order ticket under the “advanced” menu. This is how you can find initial and maintenance margin requirements for any ticker symbol.


Other Tools


Interactive Brokers Tools Review

Interactive Brokers offers API functionality for Pro customers only. Lite customers do get a smartwatch platform for Apple phones. However, iMessaging is not possible.

iBot is available on Amazon Echo devices as a skill. It can read business summaries of stocks, give quotes, tell you how to open an IB account, and provide dates of upcoming company events.

There is no IB app for Apple TV.


Option Tools


Interactive Brokers Option Review

Option tools on the client portal and mobile app are pretty crummy. There are no pre-installed multi-leg strategies; although on the mobile app it’s possible to build your own.

On Trader Workstation, it’s a different story altogether. OptionTrader is a window (launched from the blue “New Window” button in the upper-left corner) that delivers a lot of useful tools. One is option chains; another is multi-leg strategies, such as iron condors and boxes. Greek values and profit & loss diagrams are other highlights.


Investment Research


IBKR Investment Research Review

There are some good security research features at Interactive Brokers. An ETF screener is on the client portal. Separate searches must be performed for bond ETF’s and stock ETF’s. Volume and price are searchable criteria. A drop-down menu provides many more variables. The same tool can be used to scan for U.S. stocks and foreign investments.

The Interactive Brokers website has an educational hub (found in the top menu). During our snooping, we found a lot of articles, webinars, videos, and courses. Topics covered include options pricing, how to place a short sale, and generating income in a retirement account.

On the client portal, stocks have a good amount of information. To find the details, we first had to enter a ticker symbol and then click on “Fundamentals” on the stock’s front profile. Once we got to the particulars, we found information on dividend payments, analyst ratings with price targets, ownership by funds, EPS history with estimates and actual numbers, SEC statements, key ratios such as price/book in both numerical and colored chart format, and a company profile.

The one feature we wanted to see here but couldn’t find is stock reports in pdf format from third-party analysts.


Mutual Funds and ETF’s


Interactive Brokers Funds Review

IBKR Lite customers can buy and sell roughly 10,500 mutual funds from around 240 fund families. About 7,000 of these have no load, and about 4,200 have no transaction fee. Non-U.S. residents can trade a smaller list of mutual funds.

Interactive Brokers does not have a traditional mutual fund screener; and this we consider to be a major flaw. Instead, the firm provides a list of funds by fund family, and the results can be sorted by load type, symbol, and a few other choices. There are no fund profiles on the IB site.


IBKR Lite ETF Investing Review


Money market funds have a minimum investment of $10,000, while other funds are at $3,000. Transaction-fee funds are $14.95 per trade or 3% of trade value, whichever is smaller.

During our examination, we couldn’t find detailed profile pages for ETF’s on any software platforms available to IBKR Lite clients.


Account Types


Interactive Brokers Customer Review

A few account types can be opened with the IBKR Lite commission schedule. These include individual, joint, UGMA/UTMA, trusts, and IRA’s. IRA types include traditional, Roth, rollover, SEP, and inherited. There is no SIMPLE account.

Other account types that Interactive Brokers offers for institutional investors cannot use IBKR Lite.


Banking Features


Interactive Brokers Banking Review

IBKR Lite customers can sign up for the broker’s FDIC-sweep program. It offers up to $2,500,000 worth of government insurance, which is 5 times the normal level. As already mentioned, IB pays interest on free cash balances. Bill pay is available; however there are per-transaction charges.

A debit card from Mastercard can be attached to an IBKR Lite account free of charge. It functions with Android, Apple, and Samsung Pay. There are no ATM refunds, however; and IB doesn’t offer checkwriting.


Managed Accounts


IBKR Managed Accounts Review

Interactive Brokers does not offer any type of investment advice or portfolio management at this time.


Foreign Stocks


Interactive Brokers Foreign Stocks Review

IBKR Lite accounts have the same access to foreign markets that other IB clients have. This great service includes not just international stocks, but other financial products like bonds and options. The assets can be traded on foreign exchanges with Trader Workstation. Even better, commissions are very reasonable.


Day Trading


Interactive Brokers Day Trading Review

IBKR Lite offers several trading services day traders will appreciate. Some of them we have already seen, namely the desktop software. The following should also be noted:


Short Locate


Interactive Brokers offers a convenient short locate feature on its website. You simply need to enter a ticker symbol, and the tool will show how many shares are available for shorting and—perhaps more importantly—the cost to short the stock.


Level II Quotes


Available on Trader Workstation, Level II quotes show the bid and ask prices that are available through specific market venues.


Direct-Access Routing


Also available on Trader Workstation, it’s possible to send orders to specific market makers.


Margin


Both initial and maintenance margin requirements for IBKR Lite clients are 25% for long stock positions. The end-of-day margin requirement is 50%.


Other Services


Interactive Brokers Service Review

IBKR Lite customers can enroll an entire account (but not individual securities) for automatic dividend reinvesting. IB does not offer periodic investments into mutual funds.


Recommendations


Mutual Fund Investors: Because Interactive Brokers doesn’t have a regular mutual fund screener, we have to recommend Ally Invest, who does have one.

Individual Retirement Accounts: TD Ameritrade offers a larger selection of IRA’s than Interactive Brokers; so it gets our stamp of approval.

Beginners: Interactive Brokers is designed for experienced traders, and nothing about IBKR Lite changes that school of thought. Webull would be good for new traders.

Active ETF and Stock Trading: The lack of ETF profile pages causes us to suggest Webull, who does have them...and a great desktop platform, too.

Long-Term Investors and Retirement Savers: Fidelity and TD Ameritrade are our picks.

Small Accounts: Because IBKR Lite comes with neither fees nor minimums, we can endorse it for small traders.


Awards





Interactive Brokers Review Summary


It seems that a paradox has been discovered: Interactive Brokers is designed for professional-level traders, but IBKR Lite is designed for basic trading. Despite this contradiction, IBKR Lite does offer a good value with low prices and advanced features.


Interactive Brokers Promotion



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