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Interactive Brokers

Is This Your Business?
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LAST UPDATED: June 27th, 2019

Founded in 1993, Interactive Brokers is a renowned brokerage firm that's won awards for its technology and specific services. The company is mainly known for two of its key features, international investing and competitive commission rates. They compete in various categories such as price, size, speed, diversity of products, and advanced trading tools. Today, the brokerage firm provides a comprehensive range of funds and securities for active and advanced traders. The company's portal offers more than 100 market centers in 24 countries around the world. The platform meets the needs of professional investors who don't require the additional educational resources and assistance to guide their investments.

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The Good

  • Convenient platform
  • Secure transactions
  • Mobile app
Interactive Brokers caters to frequent, hyperactive traders by attempting to keep commissions low. The brokerage firm offers one of the lowest rates in the industry that is dependent on the volume that investors choose to trade. Stock trades, for instance, are about $0.005 per share with a flat rate minimum of $1. Options are $0.70 per contract with no minimum fee. Active traders will thus enjoy some of the cost friendly perks of frequently trading with Interactive Brokers. Benefits of the service include:

Convenient Platform

The brokerage firm offers an online trading platform, WebTrader, and an advanced, downloadable platform, Trader Workstation (TWS). Both platforms are offered at no additional cost to Interactive Brokers' clients. Users on WebTrader enjoy the ability to customize the entire page by selecting what they wish to view and how they'd like to view it. TWS, however, is the prime platform that investors and critics alike, tend to gravitate toward. It's an intricate system that trades numerous securities, funds, and global assets. It's perfect for market-savvy individuals who want a functional system to place trades, rethink orders, and manage their watch lists. Critics hail the system for its seamless approach and for the fact that investors can make trades straight from the platform. It's no wonder Barron's magazine awarded the firm 4.8 starts in 2015 for the Best Trading Experience and Technology.

Secure Transactions

The firm's security features are also one of the company's strong suits. The account login feature requires investors to enter a code in order to log in. While it may take longer for users to access their accounts, the general consensus on this feature is it's a great way to garner some peace of mind.

Mobile App

Interactive Brokers' mobile app has also garnered it great accolades. It's available on all popular devices and even on Nokia smartphones. Traders on the go can rest assured knowing the app will allow them to place trades, get quotes, and view real-time changes in the market. One of the greatest features of the mobile app is its full demo. It gives users $500,000 of playing money so that investors can experiment with placing trades and monitoring stock performances before trusting the app with their real money.

The Bad

  • Platform limits
  • Account access
  • Client support
New clients should be aware of the hidden fees and minimums associated with Interactive Brokers. To start with, the brokerage firm requires a $10,000 minimum funding account in order to open an account. Additionally, users should learn that if they fail to place a trade and thus become inactive investors, they'll be charged up to $20 or more for inactivity. While Interactive Brokers offers competitive stock and ETF prices, extremely hyperactive traders who trade several thousand shares or more could find these fees too costly to justify. Drawbacks include the following:

Platform Limits

The two platforms that the brokerage firm offers are exceptional but not without their own downsides. The web-based platform, WebTrader, is exclusively for placing trades. While users can perform some research on the platform, it's very bare bones, where they can only access their portfolios and view trading positions. The downloadable Trader Workstation, on the other hand, provides a variety of data, but it can be overwhelming and difficult to navigate. This heavy learning curve is evident for anyone trying to use the platform for the first time and it can put off beginner and some intermediate investors. To make up for the confusing platform, Interactive Brokers began offering a more user-friendly version called Mosaic. Both platforms can run at the same time, however, this can create yet another element of confusion for beginners new to the brokerage firm.

Account Access

Current users of the brokerage firm complain about their ability to easily access separate parts of their account, such as reports and statements. In order to access these parts, investors have to go into a separate account management section and log in again. This poses a major disadvantage to using Interactive Brokers since a lot of its competitors offer a more streamlined, unified system that allows users to access everything they need, in one location.

Client Support

While the brokerage firm has positive reviews about most of its services, unfortunately, customer service isn't one of them. Many users complain that the customer service, via phone and email, is unreliable. Clients criticize the long wait times they endure after making a call before being connected to an actual person. Then, the representatives they're connected to tend to have difference experience levels and courteousness, which is another inconsistency in the brokerage firm's customer service.

The Bottom Line

Interactive Brokers offers competitive rates, access to countless funds and securities, trading in 24 countries and an intricate platform to accommodate professionals. Experienced investors who understand the market and require little additional resources will enjoy Interactive Broker's services. The brokerage firm also distinguishes itself from the competition with its access to 100 international markets and its advanced trading technology. It's no wonder it has garnered numerous awards from the likes of Barron's magazine, FX Week, and CTA Intelligence, to name a few. The brokerage firm's advanced trading tools and platforms are ideal for high-frequency traders. While the Trader Workstation software has a high learning curve, investors with expertise will have no problem mastering it in a few days. That being said, new users, especially beginner investors, will have a difficult time navigating the sophisticated services. Since the brokerage firm offers little assistance by way of educational resources, beginner investors and new clients could be turned off by the site's general do it yourself approach.
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