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Interactive Brokers Options Broker Review: Low trading commissions and fees in 2020

Interactive Brokers has been in business for nearly four decades and they have a stellar reputation in the industry for being one of the most competitive in terms of costs, margin and for having a great selection of international investments. They were founded with the goal of catering for advanced and active traders. This is largely due to their inactivity fees which are charged on a monthly basis. The company is listed on the New York Stock Exchange and they are well respected due to many of the aspects seen in this Interactive Brokers brokerage review.

Highlights
  • Targeted at experienced and active traders
  • Competitive fee structure
  • Offers a variety of investment types
  • Been in business for nearly four decades
3.
of 8 Options Broker
Interactive Brokers
InteractiveBrokers Erfahrungen
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Risk warning: Capital can be lost. Terms and conditions apply.
Headquarters and regulation

USA (FINRA / SIPC)

National fees

$0.005 per share

International order fees

$0.005 per share

Custody fee

$0

Services & additional benefits

ETFs
Certificates
Futures

Mobile Trading & Apps

Demo account

No

Premiums

Yes

Minimum deposit

$ 10.000

Services & additional benefits

Live
Hotline
E-mail

1. Trading Offer

1) Options Broker Trading Offer : Wide range of options

In this review of Interactive Brokers you will see that Interactive Brokers has a strong presence when it comes to investment products that are found in international markets. A lot of the leading brokers in the sector focus most of their attention on investments that are based in the United States rather than venturing further abroad to get a wide selection of investments for their clients. Through their single portal, you can make investments through 120 different market centres which are located in 26 countries. They offer everything from Interactive Brokers stock trading, ETFs, options, forex, bonds, futures, as well as CFDs.

Yes
Shares
Tradable
Yes
Futures
Tradable
Yes
Certificates
Tradable
Yes
ETF
Tradable

There is everything an experienced trade really needs when it comes to their approach to investing. Currently, they offer more than 4,300 mutual funds that have no commissions or fees attached to them and they also have 45 ETFs that are free from commission. While their mutual fund offering is up there with their competitors, there is a lack of commission free ETFs in comparison. While there is room to improve on the ETF front, they certainly make up for this in other areas.

Trader Rating
5/5
Interactive Brokersreview_summary_group_1_image
    Go to Broker
    Risk warning: Capital can be lost. Terms and conditions apply.
    2. Costs

    2) Options Trading Costs : Leader in Fee Competitiveness

    Throughout this review of Interactive Brokers, you will see how the broker compares with others in the industry. This is why it is useful to conduct a broker comparison to see which brokers come out on top in different situations as this will help you to make a better informed decision on which is best suited for your needs. When it comes to Interactive Brokers stock trading, as they are targeting professional traders, as well as institutions, it is vital that they have low commissions as they possibly can.

    20
    National
    Trading venues
    100
    International
    Trading venues

    They are an industry leader in terms of their margin rates, which could range anywhere from 2.66% to 1.66% for those who have at least $1 million as part of their account. There is no flat rate per share fee with Interactive Brokers, instead, they charge $0.005 per share. There is also no base fee when it comes to options trading, there is just a $0.70 fee per contract traded. The greater volume that you trade, the better of a discount you will get on these charges. As you can see, Interactive Brokers are up there on their own when it comes to the best commission and fee rates around.

    Trader Rating
    5/5
    Interactive Brokersreview_summary_group_2_image
    • Lowest margin rates in the industry
    • Best commission and cost structure around
    • No flat rates for share or options trading
    Go to Broker
    Risk warning: Capital can be lost. Terms and conditions apply.
    3. Account

    3) Accounts : Many different trading accounts

    As you will see in this review of Interactive Brokers, there is a massive range of different account types that you can choose from. For those looking to open a traditional Interactive Brokers brokerage account, you will be able to choose from an individual account, as a family office, small business or friends and advisory account. They have many different accounts for institutions also, whether it is a mutual or hedge fund proprietary trading group or a registered investment advisor. There are subsections to the different types of accounts which allow you to look after the likes of retirement accounts.

    There are different margin levels associated with different accounts, as well as a variety of different features. Interactive Brokers has clearly laid out what is contained in each of the accounts and what types of people are best suited to specific offerings. This eliminates a lot of the research out of the equation of you, as it makes the decision of which account you are going to open a lot more straightforward. For most individuals, the standard brokerage account will be the ideal option for your needs.

    Trader Rating
    5/5
    Interactive Brokersreview_summary_group_3_image
    • Many different types of accounts to choose from
    • Caters for both individual and institutional traders
    • Retirement account options available
    Go to Broker
    Risk warning: Capital can be lost. Terms and conditions apply.
    4. Platform

    4.) Trading Platform : 1 main trading platform

    You will see through this review of Interactive Brokers that there is one standout trading platform that is part of the Interactive Brokers offering. This is called the Trader Workstation and it is suited to make any type of trade of any type of investment product that you could possibly imagine. This includes a wide range of international markets which are well suited to experienced traders. There is a generalized version of this platform which is called Mosaic and there is also a classic version that is the original version. While there are so many different investments that you can make, everything is kept surprisingly clear and easy to navigate.

    IOS
    Android

    At the moment, they have about 121 different indicators available, with their charting tools somewhat lacking at 9 different tools. There are 37 different options chains columns you can use 453 fields for your watch list. Over the year, they have added in useful tools to their offering such as a Trader Journal, IBot, Layouts Library to name but a few. They place an emphasis in monitoring portfolios and ensuring orders are properly managed through the WebTrader platform but it is usually best used alongside the classic platform.

    Trader Rating
    5/5
    Interactive Brokersreview_summary_group_4_image
    • One main proprietary trading platform
    • Easy to use and navigate
    • Suited for experienced traders
    Go to Broker
    Risk warning: Capital can be lost. Terms and conditions apply.
    5. Usability

    5.) Usability of the Website : Easy to use

    It is important that a website is very easy to navigate and find the information that you need. There is a very sleek colour scheme of black and white which is really classic and allows you to easily read all of the relevant text. The navigation is well laid out and the menu is detailed enough that you can find what you are looking for without too much work. They have useful tables and breakdowns for various aspects of their offering, whether it is detailing what types of accounts and their features that are no offer or the price structure that is seen on Interactive Brokers for different types of investments.

    Whatever the case may be, there are certainly no issues with regards to the readability of key information. They have all of their relevant legal information found in the footer of each of the web pages. With the footer being grey and the text a lighter grey, this is read easily and there is plenty of space between words that you can find what you are looking for without having to read tons of fine print.

    Trader Rating
    5/5
    Interactive Brokersreview_summary_group_5_image
    • Very clear legal agreements at the footer of each page
    • Very classic colour scheme
    • Quality navigation system that is adequately detailed
    Go to Broker
    Risk warning: Capital can be lost. Terms and conditions apply.
    6. Support

    6.) Customer Support : not available 24/7

    Unlike a lot of their competitors, there is no 24/7 availability of the Interactive Brokers customer support team. This is somewhat of a standard in the industry, so it is going to be disappointing for a lot of traders that the same level of customer support is not seen with this broker. There is phone support available Monday to Friday from 8am until 8pm and on a Sunday from 1pm until 9pm. EST. There are also support options through email and live chat. There are no retail branches where you can visit and talk with somebody in person about any of the issues or problems you may be experiencing.

    E-Mail
    Telephone
    Live-Chat
    On the spot

    There are broker assisted trades which will cost $30 each time you do so. As a whole, Interactive Brokers is less focused on the customer experience and rather they focus on providing the best tools and lowest commission for their users. They are catering for experienced traders who probably won’t require as much customer support compared to beginners and more casual traders. Having said all of this, when you did telephone the team within the outlined hours, you will find that they are well educated on the topics at hand and will be able to help you resolve any issues you may have.

    Trader Rating
    5/5
    Interactive Brokersreview_summary_group_6_image
    • No 24/7 support
    • Live chat, email and telephone options
    • No retail locations to visit in person
    Go to Broker
    Risk warning: Capital can be lost. Terms and conditions apply.
    7. Payment

    7.) Methods of Payment : One main option

    You will see a wide variety of methods used by brokers when it comes to funding options. When it comes to funding your Interactive Brokers brokerage account, there are only a couple of options for you to choose from. You are able to directly fund your account via a bank transfer. This will usually take a few working days in order for the funds to be fully processed. You should note that your bank may have some fees or charges that are associated with making this transfer. This is the option that Interactive Brokers usually recommended for their clients to load funds into their account.

    • banktransfer

    You are also able to transfer your current positions or even an entire account from a different broker. You can do so through the Automated Customer Account Transfer Service position transfer. You will receive a notification when your account has been updated with the cash or securities that you have deposited. If you are not using a secure login device that is from Interactive Brokers, you are only going to be able to make a deposit of max $20,000.

    Trader Rating
    4/5
    Interactive Brokersreview_summary_group_7_image
    • Your main option is a direct transfer into your account
    • You are able to transfer cash or securities from a 3rd party broker
    • An Interactive Brokers secure login device is preferred when making transfers
    Go to Broker
    Risk warning: Capital can be lost. Terms and conditions apply.
    8. Offers

    8.) Additional Offers : no bonus

    Unlike a lot of their competitors that have some form of deposit bonus, whether it is a certain amount of free trades or a cash bonus, there is no direct welcome bonus offered by Interactive Brokers. This is in line with their attention not really being focused on optimising the customer experience and instead focusing their effort son their actual offering. A lot of times, the institutions and experienced traders who will be signing up for this platform will not really be interested in these sorts of bonuses anyway.

    Demo Account
    Premiums / Promotions
    Training

    They do have a referral scheme in place whereby you will receive a fee in return for recommending Interactive Brokers to friends, acquaintances and contacts. You can decide on a transaction based referral fee or a flat fee based referral. There is a free trial option available at Interactive Brokers which allow you to try out various investment strategies and see what the offering at Interactive Brokers is like before you take the plunge and open up a full account. Looking at options broker comparison, not many offer free trials. As Interactive Brokers is one of the best options broker in terms of their offering, this perhaps should not be too surprising.

    Trader Rating
    4/5
    Interactive Brokersreview_summary_group_8_image
      Go to Broker
      Risk warning: Capital can be lost. Terms and conditions apply.
      9. Regulation

      9) Regulation & Deposit Protection : FIRA and SIPC member

      Just like with any other broker, there is no guarantee that you are going to make a return on the investment that you make through the Interactive Brokers platform. There is always risk involved when making investments, no matter how safe something may look to be. Interactive Brokers is part of the New York Stock Exchange, as well as being regulated by FINRA and SIPC. The United States Securities and Exchange Commission also is a key regulator, as well as the Commodity Futures Trading Commission.

      FINRA / SIPC
      Regulatory Authority
      up to $30 million and $1 million cash (SIPC and Lloyd’s)
      Dep. Protection

      This comprehensive form of regulation means that people will be confident when it comes to dedicating their funds to Interactive Brokers. As part of their SIPC affiliation, up to $250,000 in cash is protected in case insolvency or bankruptcy arises, with up to $500,000 worth of assets also protected. The brokerage aspects of Interactive Brokers are catered for under the subsidiary of Interactive Brokers LLC. They are also regulated in other jurisdictions across the world, which is why they are able to cater for such a range of international investments. They have a strong presence in the likes of Canada, India and Japan for example.

      Trader Rating
      5/5
      Interactive Brokersreview_summary_group_9_image
      • Regulated by the SIPC
      • Cash deposits of up to $250,000 protected
      • Securities valued as much as $500,000 protected
      Go to Broker
      Risk warning: Capital can be lost. Terms and conditions apply.
      10. Awards

      10) Awards : Numerous overall awards

      While Interactive Brokers is more focused on their offerings and competitiveness in their fee structure than providing a quality customer experience, they have won numerous awards over the years. They have long had a stellar reputation for being an ideal option for serious traders and institutions, having some of the best costs in the sector. They were the winner of the best online broker by Barron’s for 2018, receiving a 4.5 out of 5 stars rating by them. They were also highly ranked for the competitive fees, for their portfolio analysis and reports, their trading experience and technology as being the best for frequent traders and for their range of investment offerings.

      There are also other countless institutions in which they have won awards in 2018 for being one of the best online brokers in the space. It is clear how esteemed they are in the community and they are only going to go from strength to strength going forward. Frequent traders want to take advantage of as low fees as possible because they make so many trades that even the difference of a few cents adds up in the long term. This is why they have received so many of these awards.

      Trader Rating
      4/5
      Interactive Brokersreview_summary_group_10_image
      • Winner of numerous best online broker awards
      • Always highly ranked for the range of investments on offer
      • One of the most competitive brokers on the market today
      Go to Broker
      Risk warning: Capital can be lost. Terms and conditions apply.

      Conclusion – superb broker for experienced traders

      Through this Interactive Brokers stock trading review, their commitment to providing the most competitive fees and overall trading experience is clear-cut. They want to cater for experienced and frequent traders, rewarding them with low fees for committing to their platform. They have a standout trading platform that is preferred by many in the space and they are one of the best regulated brokers in the space thanks to their international presence. They are lacking somewhat in customer support, with no 24/7 support available.

      They also are a bit limited when it comes to their methods of depositing funds to your account, but they certainly have enough different types of specialised accounts to make up for this. Their lack of a welcome bonus may be a bit off putting to some, but it is not a big deal in the grand scheme of things. Overall, to conclude this Interactive Brokers brokerage review and determine if Interactive Brokers is good, the numerous awards they have won in recent years for being the best overall online brokers should be a testament to their quality. They may not be overly suited to beginners, but they certainly look after the needs of more experienced traders.

      Strengths

      • Vast order type options for experienced traders.
      • Low pay-per-share commissions.
      • Lowest margin rates in the industry.

      Weaknesses

      • Sophisticated trading platform for beginners.
      Test result
      Total
      94%
      Ratings
      25
      Broker
      Go to Broker
      Risk warning: Capital can be lost. Terms and conditions apply.
      Interactive Brokers
      Go to Broker
      Risk warning: Capital can be lost. Terms and conditions apply.

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