Interactive brokers review
Interactive Brokers, LLC is a famous firm that boasts of many things. Among these are being the best for international and day trading. Further, they are also famous for having low margin rates. However, there's more to this brokerage firm than just these things.
If you want to consider this firm for your investments, it can be an excellent opportunity for you. However, you may want to learn more about it.
In this article, we'll cover an in-depth take on Interactive Brokers. This way, you can grasp and see if this company suits your investing goals and preferences.
Without further ado, let's get into it!
What are Interactive Brokers?
In essence, Interactive Brokers LLC (IB) is an American multinational brokerage firm. It manages the largest electronic trading platform in the U.S. by daily average revenue trades.
The company brokers offer an array of products. Among these are stocks, options, futures, EFPs, futures options, forex, bonds, and funds. It is available in 125 markets in 31 countries, using 22 currencies.
The firm has offered fractional share trading for several years. It also boasts of an excellent platform for intermediate investors and experienced traders.
In general, the firm attracts active traders with many things. Among these are low per-share pricing, an advanced trading platform, and a large selection of tradable securities. It includes foreign stocks and low margin rates.
It has a new offering called IBKR Lite. This product offers commission-free trades of stocks and ETFs.
What can you buy with Interactive Brokers?
As I said earlier, Interactive Brokers offer a wide range of products suitable for all kinds of investors. Among these are the following:
Interactive Brokers offer ETF products or Exchange-Traded Funds. It will give you the diversification of a mutual fund with the trading flexibility of stocks.
The firm also offers stocks that you can trade in 135 markets. They boast a unique suite of advanced order types, algorithms, and sophisticated trading tools.
Options are ideal for traders who are serious about their results. With it, you'll see significant benefits in your investment.
You can also trade futures, commodities, and futures options on more than 35 market centers worldwide.
You can trade 23 currencies worldwide with no hidden price spreads, no markups, just low, transparent commissions.
You can get access to metals. IBKR Spot Gold and IBKR Spot Silver give access to the London bullion market. It is the center for the international over-the-counter (OTC) market for gold and silver.
Interactive Brokers offers low and fully transparent commissions on bonds. It also comes with no mark-up on bond prices.
IBKR provides access to 39,000+ funds from over 380 fund families around the world.
Hedge Fund Investing
You can also invest in hedge funds through Interactive Brokers, as this firm offers such.
The firm has over 60 actively and passively managed portfolios. They come with annual management fees ranging from 0.08% to 1.5% and minimums starting at just $100.
How to buy ETFs on Interactive Brokers?
If you want to buy ETFs on Interactive Brokers, it is quite simple as it works like other firms.
You can open the Trade window using the Trade button from the top right of the interface. You can also type VOO or the name of the ETF you wish to buy.
As you do so, the firm may propose several options. It can be ETFs of stocks, futures, options, or contracts for difference.
Are Interactive Brokers a good broker?
Interactive Brokers have positive feedback, and they receive reviews as one of the best brokers.
They also boast of their outstanding services for international and day trading. Moreover, they are famous for having low margin rates.
Another thing to note is they have a wide array of asset classes. It includes stocks, options, futures, and bonds.
Lastly, they are available in 125 markets in 31 countries, using 22 currencies.
Are Interactive Brokers good for beginners?
While many clients of Interactive Brokers are well-oriented, the firm offers products that are ideal for beginners.
For instance, they have free trades with IBKR Lite. With it, even casual traders may find the firm a great option to consider.
Still, beginner investors should prefer a broker that offers a bit more. If you are a beginner, you may want a firm that offers more hand-holding and educational resources.
Are Interactive Brokers a discount broker?
Yes, Interactive Brokers is a discount broker. In fact, it is one of the biggest US-based discount brokers.
It gets regulated by several financial authorities globally. It includes top-tier ones like the UK's Financial Conduct Authority (FCA) and the US Securities and Exchange Commission (SEC).
How much money do you need to open an Interactive Brokers account?
The firm doesn't require a large sum of amount to open an account. In fact, Interactive Brokers need a minimum amount of $100 to open a brokerage account.
For this reason, you can set up an account even if you only have a hundred dollars in hand.
Do Interactive Brokers have hidden fees?
Interactive Brokers boast of having low trading fees. For US-based clients, stock and ETF trading is free.
However, it would be best to note that they have a high inactivity fee for non-US clients. Thus, always be mindful of such if you're not from the US.
How do Interactive Brokers make money?
In 2019, Interactive Brokers earned 93% of its $1.94 billion revenue. It all came from commissions and net interest income.
Aside from the commissions and net interest, the firm also generates revenue from the payment of order flow. Still, it's not one of their critical business segments.
How to withdraw money from Interactive Brokers?
If you want to withdraw money from Interactive Brokers, you can follow these steps.
First, you may need to complete a withdrawal request on the Transfer Funds page in the Client Portal.
IKBR allows one free withdrawal request every month. Any other withdrawal transactions would cost fees.
Who owns Interactive Brokers?
Interactive Brokers, LLC is a subsidiary of the Interactive Brokers Group Inc. It was founded by Thomas Peterffy, an early innovator in computer-assisted trading.
The company's headquarters is in Greenwich, Connecticut. However, it has other offices in four other cities.
What bank do Interactive Brokers use?
Since Interactive Brokers is a Brokerage Firm, it's not included among the insurance of FDIC. For this reason, you may lose your assets if the firm goes bankrupt.
Still, the SIPC guarantees a certain amount for every investor. It may cover up to $250,000 of your cash, and you can get it if the firm goes bankrupt.
Interactive Brokers User Reviews
Interactive Brokers, LLC is an excellent opportunity for investments. Still, it's worth considering the reviews of its clients.
Here's an overview of the reviews in TrustPilot. Out of 907 reviews, the company earns this review:
- 31% says it's excellent
- 19% says it's great
- 8% says it's average
- 6% says it's poor
- 35% says it's bad
On the other hand, only 11 people said it was excellent, and another seven people said it was great.
Most of the comments circle in problems regarding the management of their account. Some say they can't open their account and they can't communicate with the customer service.
Of course, it will only go as far as the reviews. Since many people have said so, it's one thing to ponder as you go on.
For this reason, it would be best not to get involved unless you know your way around it.
Interactive Brokers is one of the biggest brokerages in the world. Moreover, they boast of their outstanding performance and their large assets under management.
Still, it would be best to research your own and consider what other people say about the company. This way, you'll get to understand it more and know your way in it before you place your hard-earned money.
Isn't Interactive brokers right for you? Check its best alternatives.