Interactive Brokers: Expert Experienced Broker

Interactive Brokers (IBKR) is a robust platform that caters to novice and seasoned investors. Established over four decades ago, IBKR has carved out a reputation for providing comprehensive trading tools, competitive pricing, and access to global financial markets.

This forex trading broker review is designed to provide you with a comprehensive introduction. Whether you’re aiming to diversify your portfolio or searching for a dependable partner in the intricate realm of forex trading, this review will offer valuable insights and essential information to guide your decision-making process.

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Interactive Brokers: Overview

Interactive Brokers (IBKR) has established itself as a significant player in the brokerage industry, offering a broad array of trading platforms, market access, and pricing structures aimed at meeting the diverse needs of its clientele. Since its inception in 1978, IBKR’s transition from a small market maker to a global entity in securities and forex trading illustrates its growth and adaptability in a fluctuating financial landscape.

The core appeal of Interactive Brokers lies in its ability to provide traders with a blend of efficiency, flexibility, and comprehensive market access. It facilitates direct access to interbank forex quotes, which is a crucial aspect for traders seeking tight spreads and low commission costs.

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Regulation and Registration 

Interactive Brokers (IBKR) is a global brokerage firm with a comprehensive regulatory framework, ensuring a high level of investor protection and market integrity. Here’s a summary of its regulatory status and memberships in key regions:

Region	Entity	Regulatory Body/Membership
United States	Interactive Brokers LLC	– Member of NYSE, FINRA, SIPC- Regulated by the US SEC and CFTC
Canada	Interactive Brokers Canada Inc.	– Member of IIROC and CIPF- Execution-only dealer
United Kingdom	Interactive Brokers (U.K.) Limited	– Authorised and regulated by the FCA- Products covered by the UK FSCS in limited circumstances
Luxembourg	Interactive Brokers Luxembourg SARL	– Member of the Luxembourg Investor Compensation Scheme (SIIL)- Regulated by the CSSF
Ireland	Interactive Brokers Ireland Limited	– Regulated by the CBI- Member of the Irish Investor Compensation Scheme (ICS)
Central Europe	Interactive Brokers Central Europe Zrt.	– Licensed and regulated by the Central Bank of Hungary (Magyar Nemzeti Bank)
Australia	Interactive Brokers Australia Pty. Ltd.	– Licensed and regulated by the ASIC- Participant of ASX, ASX 24, Cboe Australia- Member of the Australian Financial Complaints Authority (AFCA)
Asia	Interactive Brokers Hong Kong Limited	– Regulated by the Hong Kong Securities and Futures Commission- Member of the SEHK and the HKFE
Singapore	Interactive Brokers Singapore Pte. Ltd.	– Licensed and regulated by the Monetary Authority of Singapore (MAS)

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Account Types of Interactive Brokers

Individual Account

• Client Description: A single account holder.
• Trading Access & Account Management: Full access; can add users with Power of Attorney.
• Margin: Cash, Reg T, and Portfolio Margin available.

Joint Account

• Client Description: Two account holders with shared ownership.
• Trading Access & Account Management: Both holders have full access; can add users with Power of Attorney.
• Margin: As per Individual accounts.

Trust Account

• Client Description: Legally established entity with assets held for beneficiaries.
• Trading Access & Account Management: Trustees have full access.
• Margin: Cash, Reg T, and Portfolio Margin options.

IRA Account

• Client Description: Individual Retirement account for U.S. tax residents.
• Trading Access & Account Management: Similar to Individual account.
• Margin: Cash, Reg T and Portfolio Margin are available.

UGMA/UTMA Account

• Client Description: Custodial account for minors in the U.S.
• Trading Access & Account Management: Custodian manages the account.
• Margin: Cash accounts only; no Margin.

Non-Professional Advisor Account

• Client Description: Advisors exempt from registration with up to 15 clients.
• Trading Access & Account Management: The Advisor has trading access; clients have account management access.
• Margin: Cash, Reg T and Portfolio Margin are available.

Family Office Account

• Client Description: Family office managers.
• Trading Access & Account Management: Manager has configurable access; clients can trade and manage funds.
• Margin: Cash, Reg T and Portfolio Margin are available.

Small Business Account

• Client Description: Small business entities.
• Trading Access & Account Management: Configurable user access levels.
• Margin: Cash, Reg T, and Portfolio Margin options.

Advisor Account

• Client Description: Registered advisors managing client assets and administration.
• Trading Access & Account Management: Advisor has extensive access; clients have management access.
• Margin: Cash, Reg T and Portfolio Margin are available.

Money Manager Account

• Client Description: Advisors managing assets on behalf of another advisor.
• Trading Access & Account Management: Trading access for Money Manager; asset movement managed by Wealth Manager.
• Margin: Inherits from the client’s Wealth Manager account; margined separately.

Broker & FCM Account

• Client Description: Registered brokers or FCMs providing marketing and advice.
• Trading Access & Account Management: Broker has most management functions; clients have full trading access.
• Margin: Cash, Reg T and Portfolio Margin are available.

Proprietary Trading Group Account

• Client Description: Entities engaged in proprietary trading.
• Trading Access & Account Management: Configurable access for users.
• Margin: Cash, Reg T, and Portfolio Margin available.

Hedge & Mutual Fund Account

• Client Description: Investment managers managing single or multiple funds.
• Trading Access & Account Management: Configurable for fund admins and users.
• Margin: Cash, Reg T and Portfolio Margin are available.

Compliance Officers

• Client Description: Organizations monitoring employees’ trading activities.
• Trading Access & Account Management: Broker employees control trading; compliance has access to activities.
• Margin: Not applicable.

Administrators

• Client Description: Organizations providing third-party administrative services.
• Trading Access & Account Management: No trading access; administrative functions only.
• Margin: Not applicable.

Institutional Hedge Fund Investors

• Client Description: Institutions investing in hedge funds.
• Trading Access & Account Management: Not applicable.
• Margin: Not applicable.

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Deposit and Withdrawal

Interactive Brokers offers flexible and convenient methods for funding your account, tailored to meet the diverse needs of its global clientele. Interactive Brokers does not require a minimum deposit to open an account. However, to start trading, a deposit of at least $100 is needed. If you wish to trade on margin (i.e., use leverage), a minimum deposit of $2,000 is required​​.

For withdrawals, Interactive Brokers allows the first withdrawal of each month to be free of charge, while subsequent withdrawals within the same month may incur a fee. The specifics of these fees depend on the withdrawal method and currency​​.

Note: Funding channels and associated fees can vary significantly based on your country of residence. For the most accurate and up-to-date information, please visit Interactive Brokers’ funding page.

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Products in Interactive Brokers

Interactive Brokers (IBKR) is renowned for its extensive range of financial products, catering to the diverse investment needs and strategies of traders and investors worldwide. Here’s an overview of the key products available through IBKR:

• Stocks
• Options
• Futures
• FOPs
• ETFs
• Warrants
• Structure products
• SSFs
• Forex
• Indices
• Fixed income
• Mutual funds
• CFDs

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Trading Platform of Interactive Brokers

Interactive Brokers (IBKR) provides a trading platform known as Trader Workstation (TWS). TWS is celebrated for its comprehensive suite of tools, advanced trading capabilities, and customizable interface. Beyond TWS, IBKR offers a variety of platforms to accommodate diverse trading needs, including

• IBKR Trader Workstation
• IBKR Desktop
• IBKR Mobile
• IBKR GlobalTrader
• IBKR Client Portal
• IBKR API
• IBKR IMPACT

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Fees of Interactive Brokers

Interactive Brokers offers two pricing plans, IBKR Lite and IBKR Pro, for trading in U.S. markets. IBKR Lite provides commission-free trades on U.S. stocks and ETFs for U.S. residents. In contrast, IBKR Pro offers a tiered and fixed commission structure, with rates ranging from $0.0005 to $0.0035 per share for stocks and ETFs. 

Specific options and futures contracts start from $0.15 and $0.25 per contract, respectively. Spot currencies, bonds, and mutual funds have their own fee structures, including tight spreads for currencies and a percentage-based fee for mutual funds.

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Interactive Brokers Promotions

Interactive Brokers is currently running a promotion where you can get $200 for referring a friend. This offer is designed to reward existing clients for introducing new traders to their platform. 

For detailed terms and conditions of this promotion, including eligibility and how to participate, please visit their Interactive Brokers Refer a Friend.

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Customer Support 

• Email: Available in the website’s IBKR Support.
• Live Chat: 24hrs. (Mon – Fri) 13:00 – 19:00 US Eastern Time (Sun)
• Phone: Availability in Europe, Asia, and America with the phone number below: 

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Pros & Cons 

Pros Explained

• Interactive Brokers’ vast array of tradable securities, including options, futures, mutual funds, and international stocks across numerous exchanges, enables investors to diversify their portfolios extensively. This broad selection caters to various investment strategies and preferences, offering opportunities in both local and global markets.

• The platform’s comprehensive suite of research tools and resources supports informed trading decisions. Interactive Brokers provides access to advanced charting, market data, and analysis tools that cater to both novice and experienced traders, ensuring users have the necessary information to execute trades effectively.

• Interactive Brokers offers access to a wide range of mutual funds without transaction fees.Investors can manage and adjust their investment strategies without incurring additional costs. This feature is particularly beneficial for long-term investors looking to build and maintain a diversified mutual fund portfolio.

• Interactive Brokers’ commitment to high-quality trade executions ensures that orders are processed efficiently and at the best available prices. This can lead to better trading outcomes and is critical for active traders who rely on timely and accurate order execution.

Cons Explained

• Interactive Brokers offers a diverse range of account types, catering to various investor profiles, including institutions, professionals, and active traders. However, the array of options might overwhelm retail traders, with only a select few account types being ideally suited to their needs.
• The account setup at Interactive Brokers can be intricate, given the multitude of account types, customer groups, and plans. This complexity stems from the need to match each trader with the most suitable account configuration based on their trading activity, financial goals, and regulatory requirements.
• Interactive Brokers imposes fees on withdrawals beyond the first free withdrawal each month. This policy could affect traders who prefer or need to make multiple withdrawals within a single month, especially retail traders managing their cash flows tightly.
• The absence of popular trading platforms MetaTrader 4 (MT4) and MetaTrader 5 (MT5) means traders who prefer or are familiar with these platforms will not be able to use them with IBKR, limiting their trading platform options.

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Is Interactive Brokers Worth Considering?

Interactive Brokers is a good choice for people who want to trade a lot and save money on fees. It gives you access to many types of investments all over the world and doesn’t charge a lot for trades, especially if you pick the IBKR Lite option, which allows you to trade U.S. stocks and ETFs without any commission. The platform is packed with tools and information to help you make smart trading choices and even allows you to earn some interest on the money you’re not using for trades, as long as you have enough in your account.

However, the benefits come with considerations. These include the fact that opening an account can be tricky, and there is limited support for third-party platforms, notably MT4 and MT5. These aspects might deter traders looking for simplicity and specific technical tools. Also, the withdrawal fees after the first free monthly withdrawal and reliance on proprietary technology could influence the platform’s suitability for some. Despite the cons that this Interactive Brokers review mentioned, they could still be a great option if you’re looking for low costs and access to many markets.

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FAQs

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