{"id":2498,"date":"2020-09-28T23:13:05","date_gmt":"2020-09-28T22:13:05","guid":{"rendered":"https:\/\/businessfinancenews.com\/?p=2498"},"modified":"2022-01-01T01:50:14","modified_gmt":"2022-01-01T00:50:14","slug":"interactive-brokers","status":"publish","type":"post","link":"https:\/\/businessfinancenews.com\/investments\/interactive-brokers\/","title":{"rendered":"Interactive Brokers"},"content":{"rendered":"\n

Interactive Brokers Review<\/strong><\/h2>\n\n\n\n

Interactive Brokers is a discount broker (1<\/a>) (2<\/a>) with a proprietary online trading system (12<\/a>). It was founded more than forty years ago and has licenses from many regulators (3<\/a>), not only in the United States but also in the United Kingdom (5<\/a>). It has several decades disclosing all its financial statements to the public (6<\/a>) and to the federal agencies (7<\/a>) (11<\/a>) that are in the jurisdiction of the financial regulatory activities in the United States (4<\/a>), such as FINRA (9<\/a>) and SEC (10<\/a>),  and other countries as well (8<\/a>).<\/p>\n\n\n\n

According to our editorial review, this is currently the best broker overall that we can identify and it is also the best one for futures and for day trading.<\/p>\n\n\n\n

It is regulated by the Security Exchange Commission (SEC) in the United States and in the United Kingdom by the FCA that is the Financial Conduct Authority.<\/p>\n\n\n\n

Pros And Cons Of Interactive Brokers<\/strong><\/h2>\n\n\n\n

The biggest advantage of Interactive Brokers is that it has the largest availability of products in their portfolio and a very wide number of markets range. It has a plethora of tools to perform research, it has a lot of educational resources, and as we anticipated above it is regulated by a good number of financial authorities worldwide. Excellent overall.<\/p>\n\n\n\n

A big pro is the IB Key available through IBKR Mobile. This two-step authentication that we have in Interactive Brokers is very good in comparison to other logins that incredibly offer only one step authentication availability.<\/p>\n\n\n\n

There are some cons anyway, and there we have to consider that the desktop trading platform is very complex even more than the one of Tastyworks<\/a>, that we regarded as one of the most complex to use.<\/p>\n\n\n\n

There is a negative side in Interactive Brokers, that we do not see very often in brokerage services, which are the inactivity fees. The fee is that you must pay $10 each month of inactivity fee if you have not generated at least ten dollars in commissions.<\/p>\n\n\n\n

Also, I find another con, that is that opening of an account is a cumbersome process and it is not so smooth as in other companies that we have reviewed already like Webull<\/a>, Tastyworks<\/a>, Robinhood<\/a>, and Firstrade<\/a> among others. The deposit and the withdrawal of funds are only performed via bank transfer.<\/p>\n\n\n\n

Interactive Brokers is recommendable if you are an advanced trader, but not if you are a beginner. In this review, we will go in detail through all the pros and cons that we just mentioned, and you will understand why this platform is suitable for very mature and advanced traders and not for beginners for whom I will recommend other options.<\/p>\n\n\n\n

I will also explain what you should be doing if you are a beginner, and you want to start your trading path with Interactive Brokers even when it is not the most user-friendly as a beginner.<\/p>\n\n\n\n

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THERE ARE MANY OPTIONS TO CUSTOMIZE THE DISPLAY OF CHARTS AND JUST LEAVE THE FUNCTIONALITY THAT IS REALLY USEFUL FOR US.<\/figcaption><\/figure>\n\n\n\n

Structure of fees<\/strong><\/h2>\n\n\n\n

When we discuss the fees of a certain broker in our reviews, we always utilize the same analysis so you can compare these features and attributes among all the available brokers.<\/p>\n\n\n\n

In regard to fees, we talk about direct fees and indirect fees.<\/p>\n\n\n\n

The direct fees let\u2019s call them better the \u201cdirect trading fees\u201d, are the ones that you have to pay related to a specific operation. The most typical example is the commissions: when you pay a commission for each operation that you perform. But there are also financing rates, like when you operate with margin. Also, you have spread and also in some cases conversion fees. Conversion fees that are charged in the cases that the transactional activity requires a currency conversion.<\/p>\n\n\n\n

The indirect trading fees, on the other hand, are the ones whose charge is unrelated to any specific trading operation. These are, for example, the fees for inactivity, like if you have your account dormant for some time. We also include among the indirect trading fees the monthly or annual maintenance fees, the fees for relative inactivity if you do not operate enough with your account, and do not generate enough commissions.<\/p>\n\n\n\n

Deposit fees that are charged to you when you fund your account, and also a good example of these indirect trading fees are withdrawal fees: these withdrawal fees are independent of a trading operation, and you are obliged to pay them when you transfer money from your broker cash account to your bank or financial institution.<\/p>\n\n\n\n

So now, with this distinction, let\u2019s discuss the fees for Interactive Brokers in separate paragraphs according to the classes of assets that they handle. So, let\u2019s go.<\/p>\n\n\n\n

Interactive Brokers direct trading fees<\/strong><\/h3>\n\n\n\n

The segmentation of fees in Interactive Brokers<\/strong><\/h4>\n\n\n\n

Since 2020, the clients that are United States residents can select a new plan whose name is IBKR LITE. These American clients may trade ETFs and United States stocks without being obliged to perform the payment of a Commission and without inactivity fees in case that their account is dormant for some time.<\/p>\n\n\n\n

We will discuss later, briefly, this plan that has two versions the pro (IBKR PRO) and the light (IBKR LITE). It is very convenient for US customers because they can be saving a lot of money in commissions and trading fees.<\/p>\n\n\n\n

In general, outside this relatively new plan that started to roll out in 2020, the customers can choose Interactive Brokers between a price plan that is by tiers or by fixed rate. Let\u2019s see both of them:<\/p>\n\n\n\n