Interactive Brokers review

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What is Interactive Brokers (IBKR)?

Interactive Brokers is a major US online automated electronic broker company. The financial broker is listed on the Nasdaq Exchange with ticker IBKR.

The firm operates in 135 electronic exchanges in 33 countries, and offer trading in 25 currencies. Interactive Brokers has more than 1 million institutional and retail customers. The recent retail investing boom has propelled IBKR’s business to new heights (see below).

Interactive Brokers Expert Review

IBKR is a reputable broker with a business edge in online trading, particularly in the US. Barron’s, a major financial publication, recently ranked Interactive Brokers the ‘Best Online Brokers for 2021’, ahead of TD Ameritrade and Charles Schwab.

To find out more about the ethos behind IBKR read our interview with InteractiveBrokers’ CEO Thomas Peterffy.

Source: Interactive Brokers 2020 Annual Report

Interactive Brokers Pros & Cons

  • Professional traders will find Interactive Brokers to be an excellent broker for trading equity, ETFs, futures and options due to its solid interface, low margin rates, wide selection of tradeable securities and execution capability
  • Interactive Brokers is cost-effective for investors interested in mutual fund and fixed income securities due to the large selection of bonds and no-transaction-fee funds
  • For UK-based investors, however, there is no ISA offering as the platform is geared towards trading activities
  • Fees can accumulate when customers take out multiple subscriptions such as data, research and news
  • Mobile app and customer service need improvement

Interactive Brokers Pricing, Charges & Fees

Commission  – For stock trading, IB offers two primary structures – tiered and fixed. Tiered pricing is dependent on trading activity. The fixed pricing is fairly straightforward. GBP trades has a minimum of £6 commissions for trade value less than £50,000 (see below). Higher valued order would cost incrementally more (0.05%). The choice of tiered and fixed commission structure is available for futures and options contracts.

IBKR Lite – In 2019, Interactive Brokers started to offer IBKR Lite – a commission-free way to trade stocks (related GoodMoneyGuide zero stockbroking article on this trend). This new category is to compete directly with zero-commission online brokers such as Robinhood. It has no account minimum or inactivity fee. This may be attractive to investors who are building up assets in the stock market. However, it is available to US customers only.

No Transaction Fee ETFs – Exchange-Traded Funds are actively traded in US exchanges. Interactive Brokers offers customers to trade a large number of ETFs without charging commissions. Only a handful of brokers offer this.

Inactivity fees – Some inactivity fees are imposed on IBKR Pro account when trading commissions are less than $20. For example, account balance less than $2000 the fee amounts to $20 minus commissions.  So if you’re a low-frequency trader, you might want to consider the Lite account.

Margin Rates – Aggressive traders often use margins to enhance trading returns. Margins are capital borrowed from brokers to increase the size of positions relative to equity. Margin providers charge a fee lending capital. For GBP margin rates, Interactive Brokers charges a tiered level of interest rates, e.g. first £80,000 is charged 1.583% and 1.083% from £80,000 to £800,000 and so on. These rates are highly competitive.

Withdrawal Fee – IB allows on free withdrawal request per calendar month. After that, there will be a charge depending on the currency.

Shorting Stocks With IBKR

Shorting stocks is a way to execute a bearish view on a particular market or securities.

Typically you borrow shares from the broker and sell it on the market. If prices do go down,  you buy the shares at a cheaper price and the difference is the profit. If on the other hand prices go up, you have to buy the stock back at a more expensive price. The difference is the loss. Shorting stocks is a highly risky activity because of the unlimited upside. This activity should only be done by experienced traders.

Interactive Broker’s electronic Securities Loan Borrow system lets clients search for availability of shortable securities. In the UK, for example, there is more than 3,000 shares available to short sell. Note there is a fee for borrowing the stock. Customers will need to post margins to be able short securities.

If you owned shares fully paid and have a cash account with equity greater than USD50,000, you might even consider lending out your shares for other traders to short sell for a fee. Interactive Brokers called this ‘Stock Yield Enhancing Program‘. This earns account holder additional income other than dividends.

IBKR Robo Portfolios

One of the newest areas of investing is robots advisors. Here Interactive Brokers is catching up with the trend.

“Interactive Advisors” helps to choose a portfolio based on your risk profile. The investment model blends diversification, growth, and macro factors to achieve the targeted return at the given risk, and offers auto rebalancing over a fixed duration. Assets that Interactive Advisors invests in are low-cost ETFs.

Fees for these robo portfolios are competitive (0.12%), as compared below. There is no fee for uninvested cash.

Alternatively, customers can choice with type of portfolio they would like to invest in. Interactive Advisors becomes the intermediary for a wide variety of portfolios managed by external firms such as Legg Mason.

IBKR International Investing

Interactive Brokers’ customers can trade many international stocks and funds. US-based accounts have access to multiple trading venues in different currencies. FX spread is tight which makes the currency conversions competitive. It has access to about 135 exchanges and you can gain access to stocks, futures, and options with relative ease. Bear in mind that trading commissions will vary across exchanges.


Interactive Brokers Education & Research

Research is an important facet of investing and trading. Breaking news, comprehensive stock reports, trading signals – can improve the edge of a trader.

Interactive Broker hosts a large number of research tools and news channels. This allows traders to access a large selection of market-moving events at real-time. IBKR’s screener/filter is also particularly good. However, some premium news channels require a subscription. For example, IBKR’s Profession Data Bundle costs $155 per month (see below). When you total all these costs, it can become quite pricey over time.

Interactive Brokers maintains and sponsors a website – TradersInsight – where you can access an array of news and market-related articles by a variety of contributors.

Source: Interactive

On education, I find Interactive Broker’s Trader’s Academy ( particularly interesting because it covers a lot of ground for new and intermediate traders. The amount of material on the website is large and sorted into Beginner, Intermediate and Advance levels. Many examples used are drawn from the company applications. Webinars are also available to registered users. In addition, traders with a more advanced technical skill may find its IBKRQuant site useful.

Interactive Brokers (IBKR) Customer Reviews

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Interactive Brokers
Average rating:  
 2 reviews
 by Haroldo Mac Dowell

Trading Platform 5/5
Customer Service 4/5: faster response time
Mobile Apps N/A
Spreads & Pricing 5/5
Market Range 5/5
Trade Execution Speed 5/5
Added Value 5/5

Has been the best for a while

(Trading stocks, indices, forex, commodities and fixed income with Interactive Brokers for over 5 years on a daily basis)

 by Rob

Trading Platform 5/5
Customer Service 4/5: faster response time
Mobile Apps N/A
Spreads & Pricing 5/5platform fees
Market Range 5/5
Trade Execution Speed 5/5
Added Value %/5

Fantastic broker,providing access to global markets

(Trading stocks with Interactive Brokers for 2-5 years on a weekly basis)

Interactive Brokers (IBKR) FAQ:

Is Interactive Brokers safe?

Interactive Brokers (U.K.) Limited is authorised and regulated by the Financial Conduct Authority – reference Number 208159. Client money is segregated from the firm’s. According to IBKR’s website, ‘Client money is ring-fenced in separate bank accounts which are held in trust on behalf of the clients.’

Can you short stocks on Interactive Brokers?

The traditional method of borrowing shares and short them on the market is available on IBKR’s platform. Shorting stocks entails higher risk, especially for hard to borrow stocks. You also need to be aware of the margin requirements and fees. Alternatively, you can place bearish CFD bets on the instruments.

How does Interactive Brokers make money?

Interactive Brokers makes money from executing clients orders and charging fees from a variety of trading activities such as credit provisions. The more higher the client activities, the larger the fees. Investment management is another growing area of the business.

Is IBKR a good app?

The app is fairly and highly functional. Many functions found on its desktop version are available on the app. However, there are certain issues and glitches and the firm needs further investment in improving them.

Interactive Brokers Facts & Figures

Interactive Brokers review
Visit IBKR
Interactive Brokers Reviews
IBKR Total Markets
Forex Pairs100
UK Stocks500
US Stocks3500
IBKR Key Info
Number Active Clients1400000
Minimum Deposit$0
Inactivity Fee$0
Public Company✔️
IBKR Account Types
CFD Trading✔️
Forex Trading✔️
Spread Betting
DMA (Direct Market Access)✔️
Futures Trading✔️
Options Trading✔️
Investing Account✔️
IBKR Average Costs
FTSE 1000.005%
DAX 300.005%
S&P 5000.005%
Crude Oil0.0007%
UK Stocks0.02%
US Stocks0.003%
Table last updated: 24th November 2021 2:36 pm
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