Founded in 1993, Interactive Brokers (aka "IBKR") has a streamlined approach to brokerage services that focuses on broad market access, low costs, and superior trade execution. Customers can trade stocks, options, futures, forex, bonds, and funds on 135 markets from a single integrated account. In late 2020, the company launched its Impact Dashboard, which helps you evaluate assets with a socially responsible investing (SRI) lens.
Overall, Investopedia has consistently found Interactive Brokers to be one of the best brokers for professional traders and sophisticated, active traders who want to take advantage of a powerful suite of tools and global access to a wide range of assets. We’ll take a deeper look at Interactive Brokers to help you decide whether it is the right fit for your investing needs.
Aside from this Interactive Brokers review, we've also reviewed the Interactive Advisors robo-advisor service.
- Interactive Brokers consistently scores high in our trading and low cost awards categories.
- Interactive Brokers offers an extensive range of asset classes (including stocks, options, futures, and bonds) in 135 markets across 33 countries.
- IBKR boasts an advanced trading platform with excellent technical and fundamental analysis.
- IBKR accepts clients from more than 220 countries and territories, with offices in the U.S., Switzerland, Canada, Hong Kong, U.K., Australia, Hungary, Russia, Japan, India, China, Luxembourg, Estonia, Singapore, and Ireland (the last two were new in 2020).
Who Interactive Brokers Is For
Interactive Brokers is ideal for institutional investors and sophisticated, active traders who want a robust trading platform and access to a long list of asset classes. The broker has attempted to broaden its appeal, introducing new products, services, and educational content aimed at less active traders and investors. However, IBKR's reputation as a professional-level platform may still scare off less-experienced investors. The company accepts clients from more than 220 countries and territories and supports trading on 135 markets across 33 countries, using 23 currencies.
Wide range of offerings around the world and across asset classes
Superior order execution
Excellent trading tools
Low margin interest rates
IBKR's SmartRouter not available to IBKR Lite clients
Can be intimidating to less experienced and less active investors
No backtesting of custom trading algorithms or automated trading
- Interactive Brokers supports an extensive lineup of trading products (including stocks, options, futures, forex, bonds, and funds) on 135 markets across 33 countries. In addition to direct access to global exchanges, IBKR supports a large inventory of fixed income products, including various European corporate bonds and Euro-denominated government bonds.
- IBKR's "SmartRouting" software provides clients with the best price execution in the industry. It searches for the best firm stock, option, and combination prices available when you place an order and seeks to immediately execute your order. A third-party transaction analysis provider determined that IBKR has a net price improvement of $0.62 per 100 equity shares.
- IBKR's Trader Workstation (TWS) platform is powerful enough for professional traders but designed for retail traders and investors, too. You'll find tons of technical analysis tools, Social Sentiment by Social Market Analytics, ESG scores from Refinitiv, and access to company fundamentals data on stocks and mutual funds through Fundamentals Explorer.
- IBKR's margin interest rates are significantly lower than the industry average. The company uses a blended rate based on tiers: For example, for a balance over $1 million, the first $100,000 is charged at the Tier I rate, and the next $900,000 at the Tier II rate.
- IBKR's SmartRouter is not available to IBKR Lite clients. The IBKR Lite order router prioritizes payment for order flow (PFOF), which IBKR does not share with customers. Additionally, IBKR Lite customers don't have access to the IBKR Web Trader platform or IBKR APIs.
- Interactive Broker's powerful platform can be intimidating to less experienced and less active investors. IBKR offers a lot—products, tools, resources, services, and so on—and the steep learning curve can be overwhelming at first.
- While IBKR is a very advanced platform, there are some gaps. Traders can't currently backtest custom trading algorithms (algos) or automate trading with the standard IBKR software. Advanced traders looking for these features will need to use a third party application programming interface (API).
IBKR's onboarding process has gotten easier in recent years. You can even open an account without funding it right away (you have 90 days to do so). The website is well-designed, and the Client Portal and IBot—an AI-powered digital assistant—can help you find what you need.
Interactive Brokers supports multiple trading platforms, including desktop, web, and mobile versions (IBKR Mobile), which are available for Android and iOS devices. The app has nearly the same functionality as the web platform, though neither is as robust as Trader Workstation (TWS), the company's flagship trading platform.
You can trade the same asset classes on any platform. Similarly, you have access to real-time streaming data, charting, drawing tools, research, and news on all the platforms. News is available from dozens of sources, including Benzinga, Dow Jones, Morningstar, Seeking Alpha, Thomson Reuters, Refinitiv, and in-house commentary. Premium news subscriptions are available for a monthly fee. Any mobile watchlists you create are shared with the web and desktop platforms.
IBKR's Client Portal is a good place to check on positions, get a real-time view of your accounts, and place basic trades. It's easy to access a trade ticket and set up trade defaults. That being said, most investors who are looking to make the most of an Interactive Brokers account will be using Trader Workstation (TWS).
TWS offers a lot more functionality and is designed for active traders and investors who demand flexibility and trade multiple products. You can define hotkeys to place orders quickly, and you have the option to stage orders for later execution—either one at a time or in a batch. You can set a date and time for an order to be transmitted or submit a conditional order that becomes active after specific conditions are met, such as when an existing order executes. You can even connect an application to TWS to place automated trades or subscribe to trade signals from third-party providers.
You can place, modify, and manage orders directly from the chart. You'll find streaming real-time quotes, charting, and news across platforms—even if you're using multiple devices simultaneously.
Mobile Trade Experience
You can trade the same asset classes and order types (including conditional orders) on IBKR mobile and TWS. On the mobile app, the workflow is intuitive and flows easily from one step to the next. The mobile platform offers the same research capabilities as the Client Portal, including screeners and options strategy tools.
Range of Offerings
Interactive Brokers has the largest selection of asset classes in the brokerage industry. It regularly adds new products based on customer demand and links to new electronic exchanges as soon as practical. Customers can trade nearly 35,000 mutual funds, about 8,300 of which are no transaction fee funds (all funds in its marketplace are no-load).
Here's a rundown of IBKR's offerings:
- Stocks long and short (about 16,500 available to borrow)
- OTCBB (penny stocks)
- Mutual funds (world's largest mutual fund marketplace with nearly 35,000 funds and 8,300+ no transaction fee funds)
- Bonds: corporate, municipal, treasury, CDs, international
- Single-leg and multi-leg options, up to 8 legs
- Futures and futures options
- Robo-advisory, Interactive Advisors, integrated into the website and IBKR mobile
- International (135 exchanges in 33 countries where you can trade stocks, options, futures, forex, bonds, funds, and contracts for differences from a single integrated account)
- Forex (23 currencies and 115 trading pairs)
- Fractional share trading on U.S. stocks listed on NYSE, AMEX, NASDAQ, ARCA, or BATS, as well as OTC Pink U.S. penny stocks with average daily volume above $10 million and market cap above $400 million. Non-U.S. stocks are not available for fractional shares trading. (Note: TWS Build Version 979 or later is required to trade fractional shares.)
- IPOs, warrants, and single stock futures
- Cryptocurrency (Bitcoin, Ethereum, Litecoin, Bitcoin Cash) in addition to cryptocurrency futures, indices, and ETFs
IBKR supports a flexible array of order types on the Client Portal and mobile app, as well as over 100 order types and algos on Trader Workstation. One-triggers-other (OTO) orders are supported on TWS with attached orders and on mobile as part of bracket order functionality. With one-cancels-other (OCO) orders, you can choose from and combine logical conditions from price, time, and volume variables (using <, =, > operators), as well as margin cushion, daily P&L, percent change, number of shortable shares, and rebate rate.
IBKR's SmartRouting technology incorporates both spray and sequential order routing methodologies, depending on the order and specific market conditions. A third-party transaction analysis provider shows that IBKR has a net U.S. dollar price improvement of $0.62 for 100 shares, which is $0.47 better than the industry average of $0.15.
Interactive Brokers' order execution engine reroutes all or part of your order to achieve optimal execution, attain price improvement, and maximize any potential rebates. To help provide price improvement on large volume and block orders—and take advantage of hidden institutional order flows—IBKR includes eight dark pools in its SmartRouting logic. For options traders, SmartRouting represents each leg of spread orders independently and submits each leg at the best possible venue.
Keep in mind that IBKR Lite customers don't have access to the company's SmartRouting technology. Instead, the order router for Lite customers prioritizes payment for order flow, which IBKR does not share with customers.
The TWS Portfolio Builder tool lets you analyze the historical performance of a set of stocks chosen using one of the available investment rules. However, you can't backtest custom algos or automate your trading using the IBKR software—you'll need a third-party API application if you want these features.
Interactive Brokers' pricing scheme is complicated. It includes three types of commissions for U.S. equities:
- Fixed per-share pricing of $0.005 per share traded with a $1.00 minimum and a maximum of 1% of the trade value. Includes all exchange and most regulatory fees.
- Tiered per-share pricing based on monthly order activity. This ranges from a high of $0.0035 per share for less than 300,000 shares per month to $0.0005 per share if you trade more than 100 million shares per month, with a minimum of $0.35 per trade. It does not include exchange and regulatory fees.
- The IBKR Lite program, which offers free trades for U.S.—listed equities and ETFs (via the Client Portal and IBKR Mobile). Trades are routed to generate payment for order flow.
Here's a closer look at IBKR commissions and fees, assuming you use the fixed rate per share system:
- A transaction for one share or less (for those trading fractional shares) generates the lesser of 1% of total trade value or a minimum charge of $1.00. Trading 1,000 shares costs $5.00 (free for IBKR Lite clients).
- The same fees are charged for OTCBB (penny) stocks, though you must meet specific requirements to trade this asset class.
- There is no per-leg fee for trading options. You'll pay $0.65 per contract for options trades with a minimum commission of $1.00. Low value contract fees drop to $0.50 (premium $0.05–$0.10) or $0.25 (premium under $0.05).
- Trading a single contract is $1.00. Trading 50 contracts costs $32.50.
- Covered call trade of 500 shares plus five contracts costs $5.75.
- Mutual fund fees are the lesser of 3% of trade value or $14.95 for funds that aren't on the no-transaction fee list. 4.95 Euros for international funds.
- Margin interest for Pro customers is 1.59% for balances up to $100,000 and 2.59% for Lite customers. These are the lowest interest rates among the brokers surveyed. Margin interest for Lite customers is 1% higher than the Pro rate.
- No fees to close or transfer an account.
- No inactivity fees on any accounts as of July 2021.
- No fee for exercise and assignment or voluntary reorganizations.
- Clients can send one wire per month at no charge; there is a fee of $10.00 for each subsequent wire sent. There's no fee to receive a wire.
- Clients can send one paper check per month at no charge; there is a fee of $4.00 for each subsequent check sent.
- Futures trades are $0.85 per contract (plus exchange and regulatory fees). Volume tiered between $0.25 and $0.85 per contract.
- Forex trades cost between 0.20 and 0.08 basis points, depending on volume.
- 96 ETFs can be traded with no commission for clients on the fixed or tiered commission plans—otherwise, it's $0.005 per share with a minimum of $1.00 per order.
- Broker-assisted equity trades are $30.00 and are limited to closing trades. Clients can place trades through a live broker for large block orders and for fixed income transactions; fees vary.
How This Broker Makes Money From You and for You
The fees and commissions listed above are visible to customers, but there are a few behind-the-scenes ways IBKR makes money from you (and for you):
- Interest on cash: Like most brokers, IBKR generates interest income from the difference between what you are paid on your idle cash and what it can earn on customer cash balances. Some brokers pass part of these earnings on to customers. As of April 2021, IBKR clients earn no interest on any cash balances.
- Payment for order flow: Many brokers generate income by accepting payment from market makers for directing orders to those trading venues. This is called payment for order flow. As of 12/31/2019 (the most recent data provided by Interactive Brokers), IBKR received an average of $0.0167 per share in payment for order flow on orders in U.S. exchange-listed equities. For options, IBKR received an average of $0.3612 per contract.
- Stock loan programs: Stock loan programs generate revenue for brokers when stocks held in customer accounts are loaned to other traders or hedge funds, usually to sell that stock short. IBKR pays you 50% of the income it earns from lending the shares. The program is available to customers who have been approved for a margin account or have a cash account with at least $50,000.
- Price improvement: IBKR's smart order router seeks out price improvement and attains an average of $0.47 per 100 shares traded.
- Portfolio margining: Eligible IBKR clients can apply for portfolio margining, which can lower the margin you need based on the overall calculated risk. Typically, portfolio margining works best for customers who trade derivatives that offset the risk inherent in their equity positions.
Account and Research Amenities
Interactive Brokers has numerous screeners, tools, calculators, idea generators, and research to help you find your next trade.
Stock and ETF Screener
The TWS Market Scanners tool lets you scan global markets for the top instruments (including stocks, ETFs, options, futures, bonds, and indexes) based on the parameters and filtering criteria you define. You can use the 49 predefined scanners or create a custom one. It's possible to transmit orders directly from a scanner and save a scan as a template to use again. The Fundamentals Explorer (on both TWS and Client Portal) dives deep into hundreds of data points covering historical trends, industry comparisons, key ratios, forecasts, ratings, ownership, and more. There's a stock scanner on Client Portal, but it's not as powerful as the one on TWS.
IBKR offers several tools to help you find your next options trade. The Probability Lab translates an equity's option price into the market's price forecast for that equity. Customers enter a price forecast, and the Lab provides strategies with the richest Sharpe ratio. The Option Strategy Lab generates option strategies based on price and volatility forecasts for a stock. The Option Strategy Activity Scanner scans most active multi-leg option strategies for a given ticker, or you can search by other options-related metrics such as volume and open interest.
Mutual Fund Screener
You can search for mutual funds and filter using over 170 variables with IBKR's Mutual Fund scanner (added in 2020), available in both Mosaic and Advanced Scanners in TWS. There's also a Mutual Fund Replicator, which scans the market for lower-cost ETFs that replicate the performance of a specific mutual fund. IBKR has more than 26,500 mutual funds and about 1,200 ETFs available to search. Customers can also use the Fundamentals Explorer tool to get detailed information on mutual funds, including expenses, performance, Lipper ratings, and more.
Fixed Income Screener
Bond Scanner, created in 2019, explores IBKR's entire fixed-income inventory, which is vast. You can search by asset class, include or exclude specific industries, find state-specific munis, and more. This tool is not available on mobile.
Charting helps you process market data into something meaningful. IBKR's charts are fully customizable, and you can set chart parameters, modify them from within a chart using the Edit menu, and save a chart layout as a template. You can choose the time period, primary display, bar type (TWS native charting offers Line, Bar, Candle, Historical Volatility, Implied Volatility, Option Open Interest, Option Volume, Heikin-Ashi, and Hollow Candles), volume plot height, dividends, number of bars to display, and the vertical scale—plus dozens of additional chart parameters. Technical traders will enjoy more than 120 technical indicators and a suite of easy-to-use drawing tools.
Tools and Calculators
Numerous calculators are available throughout the platforms, including options-related calculators, margin, order quantity, interest, and financing.
Trading Idea Generator
IBKR customers can use Capitalise, IBKR Market Signals, Benzinga, and Refinitiv Significant Developments for idea generators. The blogs contain trading ideas as well.
Dozens of real-time news sources are available on all platforms. The list includes 24/7 Wall Street, AccessWire, Benzinga Pro News, Benzinga Crypto News, Briefing.com, China Perspective, China Investment Insight, Dow Jones North American Briefing, IBKR Market Signals, IBKR Quant Blog, IBKR Traders' Insight, Insider Insights, Market Realist, Morningstar Insider Trade Log, Seeking Alpha, StreetInsider.com Top News and Analyst Actions, TalkMarkets, The Motley Fool, Thomson Reuters Global Financial Market News, TipRanks Market News, Refinitiv Briefs, Refinitiv Transactions, and Zacks Investment Research Newswire. Premium news subscriptions are available for a monthly fee.
IBKR customers have access to dozens of free and premium market research and news providers, including AltaVista Research (ETF and mutual funds), Edison Investment Research, EventShares Research, ETF Guide, Morningstar Equity Ownership, Reuters Stockreports+, ValuEngine, and Zachs.
The redesigned Fundamentals Explorer is available on all IBKR trading platforms. This tool lets you dive deep into hundreds of data points covering historical trends, industry comparisons, key ratios, forecasts, ratings, ownership, and more. You can see how a company compares to competitors and industry averages across various data points, as well as how the company has performed over time with historical trends.
Dividend Reinvestment Program
IBKR Clients can set an account-wide default for reinvestment of dividends on qualifying stocks.
IBKR doesn’t provide a cash sweep program and there is no interest paid on idle cash balances.
SRI/ESG Research Amenities
The Impact Dashboard—available on TWS, Client Portal, and the mobile app—helps you evaluate and invest in companies that align with your values. Select your investment criteria from 13 impact values and principles, including clean air, pure water, ocean life, land health, consumer safety, ethical leadership, gender equality, racial equality, LGBTQ inclusion, company transparency, sustainable product lifecycle, mindful business models, fair labor, and thriving communities. You can also exclude investments based on 10 categories: animal testing, business ethics controversies, corporate political spending and lobbying, energy-intensive, fossil fuels, greenhouse emissions, hazardous waste, high water usage, tobacco, alcohol and gambling, and weapons and gun manufacturers.
IBKR's PortfolioAnalyst consolidates, tracks, and analyzes your complete financial performance. You can link your investments, checking, savings, annuity, incentive plan, and credit card accounts to get an overall view of your financial situation—and plan for the future. The tool is free for all to use (even if you don't have an IBKR account), but only customers get to use PortfolioAnalyst's advanced features and real-time portfolio updates.
All balances, margin, and buying power calculations are in real-time. You can calculate your internal rate of return in real-time, as well. IBKR's proprietary Tax Optimizer tool lets you set a default matching method, which you can override for specific symbols if desired. To help you maximize tax efficiency, the Tax Optimizer provides a "what-if" capability, which provides a preview of P&L for each of the matching methods.
IBKR's TWS offers the Trader's Journal, a note-taking feature that lets you record and save trading notes and ideas on any product. You can save screenshots as part of a note, attach notes to trades, and configure charts to display both orders and executed trades. This is one of the more comprehensive trading journals available from any brokerage.
IBKR provides a broad range of investor education programs for customers and the public. Traders Academy (revamped in 2020) is an online, on-demand resource that features a structured, rigorous curriculum intended for financial professionals, investors, educators, and students who want to learn about asset classes, markets, currencies, tools, and functionality available on IBKR's trading platforms.
Quizzes and tests benchmark student progress against learning objectives and allow students to learn at their own pace. Examples of course offerings include introductions to asset classes such as options, futures, forex, international trading, and bonds, and how to use margin. Some courses cover the various IBKR technology platforms and tools. The website includes a trading glossary and FAQ.
IBKR and industry experts offer daily webinars. These events cover various topics, including how-tos for platforms and tools, options education, trading international products, and more. There are hundreds of recordings available on-demand in multiple languages, including English, Spanish, Chinese, Italian, and French.
IBKR has long been considered short on customer service, but the company is working to improve its reputation. One feature it added a couple of years ago is an IBot service, powered by an artificial intelligence engine, which answers questions asked in plain English. IBot is available throughout the website and trading platforms and can help customers find answers—without having to endure long wait times.
- Toll-free telephone support is available 24 hours a day, six days a week
- Callback service lets you request a call back if you need to hang up and don't want to lose your place in line
- Online chat with a human agent (available from within the trading platform or website)
- Secure message center (available from within the trading platform or website)
- AI-powered IBot directs customers to online FAQs and resources
Security and Reliability
IBKR meets or exceeds industry security standards. This includes:
- Mobile app users can log in with biometric (face or fingerprint) recognition.
- Multiple forms of two-factor authentication.
- Client securities accounts at Interactive Brokers LLC are protected by the Securities Investor Protection Corporation (SIPC) for up to $500,000, with a cash sublimit of $250,000. Excess SIPC coverage provides up to an additional $30 million (with a cash sublimit of $900,000), subject to an aggregate limit of $150 million.
- Interactive Brokers' Bank Deposit sweep program enables clients to supplement their existing $250,000 SIPC coverage with $2,500,000 of FDIC insurance on eligible cash balances.
- Interactive Brokers reported it had no serious platform outages in 2020. In March, IBKR experienced issues with its European systems, which caused login problems and outages for under 90 minutes on Trader Workstation; IBKR Mobile was down briefly that day. The company notes that during that time, however, clients had access to other trading platforms. In November, when several brokers experienced outages, some clients experienced a slowdown on some IBKR platforms. The company advised clients to use Trader Workstation during the brief period the slowdown occurred.
- Through 2020, there were no significant data breaches at any IBKR location reported by the Identity Theft Research Center.
- The IBKR Securities Class Action Recovery service launched in May 2020. It's an automated service designed to remove the administrative burden of participating in a securities class action lawsuit. The service automatically detects if you are eligible to file a claim for securities you bought or sold at IBKR in the past. When applicable, the service submits filings to claims administrators on your behalf and seeks to recover funds for compensation. Any recovered amounts are electronically deposited to your IBKR account—less a 20% contingency fee.
On August 10, 2020, the Financial Industry Regulatory Authority (FINRA) announced it had fined Interactive Brokers LLC $15 million for widespread failures in the firm's anti-money laundering (AML) program. The same day, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) also announced disciplinary actions and fines, resulting in a total of $38 million in penalties paid to the three agencies.
IBKR's pricing structure is complex, but details are readily available under the Pricing menu on the website. Commissions are broken down by asset class (e.g., Stocks, ETFs, and Warrants; Options, Futures, and FOPs) and by plan—whether that's tiered, fixed, or free (IBKR Lite) pricing.
Interactive Brokers offers a lot in terms of products, tools, and technology. Overall, we found IBKR is best for professional traders and sophisticated, active traders who want to take advantage of a powerful suite of tools and global access to a wide range of assets. It's worth noting that you can trade any of those assets from a single, integrated account, a convenience that many brokers can't offer.
While IBKR is making its technology more appealing to the mass market, the abundance of tools and resources may still intimidate many new investors. Still, if you have outgrown your current broker's offerings—or if you will soon—Interactive Brokers could be a natural next step.
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In addition, every broker we surveyed was required to fill out an extensive survey about all aspects of its platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of its platforms at our offices.
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