What is Interactive Brokers?
Interactive Brokers is a broker that is popular among advanced traders, but due to their recent change, new traders will also be attracted to them. They recently launched IBKR Lite, which allows you to trade stocks and ETFs for free. This will surely appeal to the new traders while their IBKR Pro offering takes care of the advanced traders.
Thomas Peterffy is the founder, Chairman, and CEO of Interactive Brokers Group, Inc. They recently completed their 41 years as a broker/dealer. It is rare to find a broker that has been around for so long, so it certainly increases their reliability in my eyes.
Pros
- Versatility: They have now become suitable for beginner traders. They have different offerings for different experience levels of traders. You can also find versatility in their investment products.
- Free Trading: Free trading is not just loved by beginners but active traders as well. Unfortunately, active traders won’t get access to IBKR Pro when they want to get the benefit of free trading. The commissions are pretty low, so you can pay them if you want the additional features.
- Active Trader’s Dream: Active traders have always preferred this platform. With plenty of offerings, versatile tools, advanced charting, and other features, this broker is hard to pass up if you are an active trader.
Cons
- Activity Fee: If you are not active and generating a certain level of commissions for them, then they will charge you a monthly activity fee. This fee won’t break your bank, but it can still bother some people.
How does Interactive Brokers work?
Let us take a look at the most useful features of this broker.
Investment Products: You can invest in stocks, options, futures, forex, metals, ETFs, mutual funds, and much more. Their range of investment offerings is impressive and offers something for every trader.
Trading Platforms: IBKR Lite offers free trading, but it is limited when compared to the IBKR Pro. It gives you access to their Client Portal, which is used for managing your account and placing trades. You also get access to their mobile app for trading and monitoring on the go.
One interesting tool present inside the Client Portal, mobile app, and Trader Workstation for desktop is IBot. IBot allows you to find the information that you need by using text and voice commands. You can also place orders by using voice commands.
Now, let us focus on the IBKR Pro, which is best for professionals who don’t want to compromise on advanced trading features and tools. You get everything that they offer in IBKR Lite. In addition to that, you get access to IBKR WebTrader, IBKR APIs, Trader Workstation (TWS), paper trading, and much more.
Trader Workstation or TWS is their flagship trading platform with powerful features such as interactive and customizable charts, watchlists, third-party research, customizations, and trading tools. Their tools are very impressive, and you get to choose from 25 tools based on your needs.
ChartTrader is one of the tools that they offer. It allows you to analyze multiple charts using more than 120 technical indicators. Option Strategy Lab is a tool that allows you to create and submit either simple or complex multi-leg option orders based on the forecasts of price and volatility entered by you.
IBKR Pro will give you access to everything that they offer and make trading a lot better.
Research: They provide research from Morningstar, Zacks, Market Realist, TipRanks, ValuEngine, Dow Jones, and other reliable providers. Premium research is also available at a discounted price, but I think that most people will be satisfied with free research.
Education: They have Trader’s Academy for people who want to learn about using their platform as well as trading in general. They provide education through webinars, quizzes, notes, and videos.
What do the traders think about Interactive Brokers?
A broker like this one can’t be expected to have perfect reviews, and it doesn’t. Still, it has an A+ rating on Better Business Bureau, and the majority of reviews on Trustpilot are positive. People are impressed by their quick execution, reasonable commissions, the ability to invest even as a foreigner, complete platform, and quality tools.
Like most big brokers, they have issues with customer service. The truth is that people who have issues with customer service are very likely to post a bad review while people who have a great experience don’t usually post one. So, you can find a lot of reviews complaining about bad customer service.
Overall, they have managed to satisfy the majority of traders. I think that they should improve their customer service to become better.
Who should try Interactive Brokers?
This broker has always been a safe bet for active traders so that they can try it without any hesitation. You can even switch between IBKR Lite and IBKR Pro and see what suits you the best. Beginners can’t be pushed into trying this platform because it is not very newbie-friendly. It will take you some time to figure things out, and you may feel intimidated by the various tools that it offers.
In my humble opinion, this platform is not ideal for beginners, but you can certainly try it if you want. Maybe, you will like it and decide to stick around. If you are someone who wants to use a simple platform and don’t like to take any unnecessary risks, then it might be wise to stay away.
Final Thoughts
Interactive Brokers is a great broker for active traders. They can be great for beginners as well if they improve their monthly activity fees and make the platform more friendly for low volume and new traders. With so many great tools, you can hope to have an awesome time trading on their platform.
Their research is great, and you can count on their support most of the time. They can certainly improve, but they are still a broker that is worth considering.