Interactive Brokers Review 2020

Thomas Peterffy founded Interactive Brokers Group over forty years ago. He acts as the CEO and Chairman of the group. He bought a seat on the American Stock Exchange in 1977, which lead to him becoming a member and having the right to trade as a standalone market maker in terms of equity. He then founded TP & Co the year after, which expanded their trading method under Badge # 549.

In 1993, the group was renamed to Interactive Brokers Inc, the one they use up to this date. This time, they made Timber Hill execution services for all, as well as, their electronic network was open to its customers. It rose to be one of the most distinguished security firms with around $6 billion equity capital. With such numbers, it has power and ability to facilitate broker business in around 120 markets. They provide the most packed techniques and methods for professional traders including custody, execution and clearing, as well as reporting.

What they live by is offering Interactive Brokers services with lower commissions and no ticket charges. They do not have minima or fees for any of their platforms, apps, software or technology. On top of it all, they have very small interest rates.

What Services or Products Do Interactive Brokers Offer?

Below are the products Interactive Brokers offer:

TWS (Trader Workstation). Pioneering the use of computer generated fair value sheets in late 70’s, Interactive Brokers provides TWS, a trading platform which makes trade executions quick and more efficient. It is the standard-bearer trading platform providing a wide array of technology centered on the products with the following features:

OptionTrader and Probability Lab with single and complex multi-leg option trading.

FXTrader which is laid out for forex traders.

Mutual Fund/ETF Replicator manages traders to find lower cost ETF substitutes and mutual funds

TWS is available in different platforms with most powerful and flexible breadth in Desktop, in terms of tools and asset layouts, technical analysis and risk tools. It can also be accessed via Mobile, iBot and webYtader. In Mobile, it can be downloaded for both iOS and Android devices.

Mobile – designed for smart devices. It allows you to trade and monitor your Interactive Brokers account while on the go. Works with iOS and Android devices. iBot is a text-voice trading solutions which knows basic English commands. Add-ons can be matched on both Desktop and mobile versions.

Securities Trading

There are two accounts involved in the Interactive Brokers group platform, enabling traders to trade stock, options, bonds, forex, futures, CFDs, ETFs and more. Sign up for these accounts:

Trader and investor accounts – for individual investors, small businesses, friends or family office.

Institution accounts – for registered advisors, money manager, hedge or mutual fund, trading group, etc.

Registration does not cost a dime. Verify your account and start trading. A free trial account is available for beginners, without any commitment. This is where beginners can test their strategies for trading, access the tools of trade, boost financial instruments and customize the UI, analyze and compare commissions.

Required Minimums

Opening account has set minimums, which needs to be met before you can trade.

It ranges from $3,000 to $5000 or INR 100,000 – 500,000, depending on parameters such as age, Indian account if Indian residency or US account. Individual accounts require Trading Group Masters and Broker Masters a deposit of $10,000.

Interactive Brokers Benefits:

  • Commissions are high and competitive, fixed and tiered pricing
  • Access to international marketa
  • Flexibility of trading various account types such as IRA, joint, single-registered.
  • Various trading options, investment and asset classes
  • Robust TWS with featured tools
  • Access to direct market
  • Free in-the-moment trading account to test your strategy in trading, simulating trading environment
  • Solid online educational program, tutorial system for software technical analysis and usage
  • Platform pricing is competitive
  • Excellent options for analytics tools and pricing
  • Works great with Smartphone apps

Interactive Brokers Caveat

  • Required minimum equity is bigger, used in opening trading account compared to other brokers.

Interactive Brokers Disadvantages

  • Higher required minimum equity to open trading account than some of the other brokers($10,000)

Conclusion

All in all, Interactive Brokers is one of the most recommended trading platforms and a top choice for international traders if they want to enter the US stock and option markets.

It is a good starter pack for beginning traders with ample capital. At first, the TWS platform can be a bit intimidating but once you pick up the basics and learned how to use the software, it will be a lot of help for you and you’ll get the hang of it.

There is also flexibility of trading from IRA or other account types which is not permitted in US based brokerages.

Commission structure is fixed or tiered depending on volume. Fixed pricing is most effective for  traders.

Interactive Brokers are advocates of transparent pricing so you pay the exact amount you purchased.

If you’re not trading huge amount, cost of actual trading is for the most part. The flexibility of switching from Forex to options to equities or futures and other types of trades, are diverse instruments, which can be very appealing for investors.

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