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Best Brokerage Firm For International World Markets Trading


Best online broker for international investing review. Top brokerage firm for trading stocks on markets around world.



Best Brokerage Firm For International Markets Overview


Interactive Brokers has a strong offering for investors looking for low trading and margin costs, access to multiple asset classes globally, financial strength, and API tools to facilitate automated trading and analysis. Let's see what makes it the best broker for foreign stocks trading today.


Commissions, Margin, and Execution Costs


Interactive Brokers margin rates clock in at a very low 2.66% for margin balances up to $25k. The next closest competitor, Fidelity, charges 7.825% on similar balances. Other major competitors such as Scottrade, Schwab, and TD Ameritrade lag similarly far behind.

Interactive Brokers cost advantage carries over to equity, option, and futures trades as well. Typically, Interactive Brokers charges half a cent per share in commissions for equities which includes everything but transaction fees levied by FINRA and the exchanges. It’s a fee structure that tends to be lower than competitors offerings.


Best broker for foreign stocks trading


Another aspect of trading cost is price improvement on execution. These are small advantages but Interactive Brokers smart routing technology tends to secure better prices on orders than the industry.


Best online broker for foreign stocks


If you are an investor who trades at least a few times per month or regularly uses margin, Interactive Brokers has clear cost advantages.


Access to Multiple Asset Classes Globally


Interactive Brokers allows you to access 100 market centers in 24 countries and trade stocks, options, futures, forex, ETF’s and bonds from a single universal account. As ETF’s have come to span the global marketplace and other brokerage companies beef up their offerings of international stocks and bonds, futures and forex, Interactive Brokers advantage here has become less pronounced but they are still a leader and an early proponent of the so-called universal account. Charles Schwab for instance allows you to trade stocks in 35 foreign countries and you can even trade futures with Schwab’s subsidiary, optionsXpress.


Financial Strength


In 2011 MF Global improperly used customer funds to cover proprietary trading losses. Customers may have lost funds and were without access to their money for as long as 3 years in some cases. In light of this sort of fiasco, it’s worth noting that Interactive Brokers does not engage in proprietary trading, that 84% of the company is owned by employees, that its equity capital exceeds $5bln, and that Interactive Brokers has exemplary margining tools that mark customer accounts to market continuously and liquidates accounts with insufficient margin automatically.


Platforms


Interactive Brokers has three trading platforms: IB Web Trader, IB Trader Workstation, and Mobile.

Interactive Brokers accounts come with various security devices. One option is a card about the size of a credit card that’s mailed to account holders. The card contains a series of keys (numbers from 1 to 224) with an associated 3 digit alphanumeric value. Upon keying in your username and password to log into the trading account, the system then prompts users with two sets of keys and expects the associated values. There’s another option with a credit card sized calculator with another encryption scheme and still another that allows users to verify their identify with a phone. These features take a little extra time but are typical of the kind of extra precaution taken by Interactive Brokers.

Web Trader lets you trade, gives you access to prices and charts and is a simple platform that can be used behind a firewall without having to download a software application.

Mobile lets you access market data and charts and place trades from your phone or tablet. This feature is convenient as markets respond to events in Asia or Europe or just to let you monitor potential trading opportunities throughout the day. Here’s a screenshot from the mobile app.


Best brokerage firm for foreign stocks
Trader Workstation is the backbone of Interactive Brokers platform offerings. Trader Workstation has both a classic viewpoint which mainly includes quote and position boards. You can pull up charts that float. Here’s a screenshot from the classic interface.


Best broker for foreign stocks


Trader Workstation includes tools like options chains and book trader which allows traders to see the depth of market and place trades by clicking a mouse. There are also more advanced order types such as bracket, stop limit, profit taker, One Cancels Other, and pairs orders.

Trader Workstation also includes a Mosaic option which is designed to be an integrated view of quotes, charts, news, and positions all in one screen. Interactive Brokers has improved its charting functionality, but the suite lags behind many platforms designed for active trading in its customizability and breadth of indicators. Some other platforms such as Tradestation or TD Ameritrade even offer scripting languages to scan market data, create custom indicators and backtest and automate trading strategies. Interactive Brokers does offer a connection to Multicharts to allow “non-programmers” to program more complex custom technical indicators.

For asset allocators or wealth management investors seeking advice, Schwab and Fidelity and Vanguard probably make a more compelling offering. For active technical traders, TD Ameritrade’s emphasis on user interface and breadth of technical analysis tools may be most compelling. Where Interactive Brokers really shines is cost, breadth of trading instruments and tools for quantitative investors such as API access.

API Access


Through the Trader Workstation, Interactive Brokers supports APIs in Java, C++, Python, .NET, and DDE to connect market data and order routing technology. This is where Interactive Brokers offering really shines: a low cost platform that allows traders to automate strategies at a low level with great control. These tools are for programmers and aren’t as user-friendly as offerings from Tradestation, but it gives quants all access to all the data and order routing technology necessary to automate trading systems.


Updated on 9/25/2017




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