In 2017, Barron’s rated Interactive Brokers as the Best Online Brokerage, Best for Option Traders, Best for Frequent Traders, Lowest Cost Broker Rating, and Low Cost for the 16th year in a row.
Interactive Brokers has a broker dealer agency business, as well as providing direct access online trade execution and clearing services to individual clients.
Interactive Brokers is headquartered in Greenwich, Connecticut and has over 1,100 employees in its offices in the USA, Switzerland, Canada, Hong Kong, UK, Australia, Hungary, Russia, Japan, India, China and Estonia.
Interactive Brokers is regulated by the SEC, FINRA, NYSE, FCA and other regulatory agencies around the world. However, FCA regulation does not extend to offshore clients because of territorial limitations in the FSMA 2000.
Interactive Brokers’ platform based in the US comes under US Securities and Exchange Commission, and the Commodity Futures Trading Commission regulation.
The company’s service is extremely comprehensive, providing direct market access to stocks, options, futures, forex, bonds, ETFs and CFDs from a single IB Universal Account. It covers 100 markets, 24 countries and 22 currencies.
However, the service is more geared towards professional traders, investors, advisers and fund managers rather than retail clients.
Not all of these instruments may be legally available however, due to foreign fund marketing rules and local licensing requirements to residents in certain countries. Professional advice should be sought if you are unsure regarding local compliance rules.
The trading platform is mobile, web and desktop compatible, offers research, news and updates, as well as boasting algorithm and trading tools. Other features include portfolio margining and watch list tools. The platform allows easy viewing of holdings, but not simplified viewing for retail investors.
International investors can open accounts online, and pricing is competitive. Interactive Brokers claim that their charges are 87% lower than their competitors.
Full details of the charging options and structures can be found HERE.
The platform charges a complex commissions structure, with trade costs dependent on your country of residence. Broadly, ETFs and stocks can be traded at a minimum of $4-$8 under the fixed pricing structure.
High volumes of trades are rewarded, but on average, the occasional trader is likely to pay $20 per month according to the site. However, their definition of ‘occasional’ is 8 trades per month - which is fairly high for the long-term passive investor!