Interactive Brokers

Interactive Brokers has been playing an influential role in the investment decisions of the people since the 1980s. Read more about its working, pros, and cons of selecting it as your broker.

Interactive Brokers Overview

Did you know that 2020 saw a 116% growth in fundraising through the public equity markets than that in the calendar year 2019? In 1978 Interactive Brokers were an online platform for traders, investors, and advisors for stocks, futures, options, currencies, bonds, and funds. Interactive Brokers have gained a lot of trust and popularity in the Singapore Financial Market, thanks to SGX (The Singapore Exchange). The SGX operates Asia’s Largest offshore futures market, providing access to a broad range of derivative products, including options and futures on interest rates, equity, and dividend indices.

What Services Does Interactive Brokers Offer?

Here are the major services offered by Interactive Brokers:

  1. Cryptocurrency exchange/ trading: One of the few companies that allow trading and futures on one platform. Interactive Brokers charge a meagre trade value commission (0.12%-0.18%) with no added spreads, markups, or custody fees.
  2. Stocks/EFTs: This feature allows the user to trade stocks globally over 80+ markets and offers one of the lowest financing rates in the industry.
  3. Mutual Funds, Hedge Funds, and Bonds: The platform offers more than 40,000 mutual funds to choose from, with over 7,700 funds with no transaction fees. The platform allows the user to connect with the Hedge Fund directly. The platform also has more than 1 million bonds to choose from.
  4. Spot Currencies: The platform offers deep liquidity and real-time quotes from 17 of the world’s largest FX dealers with more than 100+ currency pairs available. With professional FX trading tools, the platform has tight spreads as narrow as 1/10 PIP.
  5. US Spot Gold: The platform allows users to trade US Spot Gold with other asset classes from a single integrated account. The commission charged is low as compared to the rest.

Reasons To Choose Interactive Brokers

A pioneer in the stocks and equity market for decades, Interactive Brokers is unarguably one of the best platforms for asset management and global investment. The ease of using a single integrated account for stocks, cryptocurrencies, mutual funds, hedge funds, and bonds makes the platform unique. A user can connect with multiple advisors, institutions, and third-party services for business. Interactive Brokers is a listed NASDAQ company and has equity worth $9.93B, out of which 78% is held privately. Some key features which give Interactive Brokers an edge over other platforms are as follows: 

  • Trusted Platform: Globally trusted platform with more than 1.4M client accounts. It has won multiple awards.
  • Allows free Advertisement: Allows the users to advertise their services globally at zero cost.
  • Cost-Free Tools: Free trading tools for result analysis and better account management.
  • Low Trading Costs: Extremely low trading and financing costs. The platform offers the lowest margin loan interest rate.

Types of Portfolios Offered By Interactive Brokers

Interactive Brokers offer multiple types of portfolios, which are user-specific and embedded with unique features. Be it an individual or an institution; Interactive Brokers has made investment management precise and straightforward with their multiple dashboard features. Some key offerings include:

  • Institutional Investors get a robust and sophisticated platform with a long list of assets at great prices
  • Educational content for less experienced and small traders to keep them engaged and features like IKBR Lite with smart trading tools

With over 100 types of orders available and algos on Trader Workstation, Interactive Brokers provides a flexible trading method across its website and mobile app.

Interactive Brokers Fees

Interactive Brokers currently offers three kinds of commission schemes for U.S. equities which are as follows:

  1. Tiered per share: The pricing is based on monthly order activity. A very minimal commission of $0.0005 per share on theing>100 million shares per month.
  2. Fixed per share: A fixed price of $0.005 per share traded with a $1.00 minimum trade value.
  3. IBKR Lite: This scheme offers free trades for US-listed equities and EFTs using IBKR mobile app and web portal. You can click here to know the fees in detail.

Upsides Of Using Interactive Brokers

The following are the pros of using Interactive Brokers over other platforms:

  • “Smart Routing” software allows clients to trade at the best prices. It automatically recommends the best options and charges a minimal fee when the order is being placed.
  • TWS (Trader Workstation) platform for advanced traders. A superior tool for deep analysis and access to the company’s fundamental data for better research.
  • Aggressively lower margin interest rates than the industry average.
  • Supports multiple payment systems like credit/debit cards and multiple currencies.

Downsides Of Using Interactive Brokers

The platform has some notable cons, which are as follows:

  • Interactive brokers platform does not support automated trading and currently does not offer backtesting for custom made trade algorithms.
  • The platform is not beginner-friendly as it has multiple advanced tools, which might be difficult for beginners and intermediate traders

Final Words

When it comes to having a platform loaded with technology, advanced trading tools, secure payment gateways, and numerous offerings, Interactive Brokers has proven its worth over the years. Trusted by users in over 135 markets and 33 countries globally, it gives an edge to Interactive Brokers over other platforms in terms of reliability. The platform is best suited for intermediate and advanced traders as it offers a wide array of analytics and tracking tools such as IBKR Lite and Smart Routing software. Availability of a huge number of mutual funds, stocks, equities, US spot gold, futures and futures options, indices, and warrants on a single platform makes Interactive Brokers unique and extremely usability. With multiple platforms available online, competing neck to neck for best margin rates, secure fund management, numerous services, and keeping customer support in check, Interactive Brokers have managed all of it with ease. It is safe to say that Interactive Brokers could become the go-to platform for investments and trading purposes for many more users worldwide.

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