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Interactive Brokers Review and Profile

About.com Rating 4.5 Star Rating
User Rating 2 Star Rating (3 Reviews)

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The Bottom Line

Interactive Brokers, commonly called IB, was one of the first brokerage firms to spearhead electronic trading and they did it in a big way. The result is a brokerage firm that trades virtually every major market in the world on a very technically advanced trading platform. And you, the trader, benefit with very low commissions and a solid electronic trading platform.

Pros

  • Extremely low commissions.
  • Able to trade more than 60 global markets.
  • Interactive Brokers provides an abundance of education and research.

Cons

  • As you might expect with the lowest commission rates, their customer service is not the best.
  • Their trading platform is not the most advanced and charting capabilities could use an upgrade.

Description

  • Interactive Brokers may have the lowest commissions among online futures brokers.
  • Excellent research to learn about the commodity markets and trading and they offer many regular webinars.
  • Many futures brokers specialize in the U.S. markets. IB is very appealing for those who want to trade international markets.

Guide Review - Interactive Brokers Review and Profile

Trading Platform / Software

Interactive Brokers’ trading platform is the Trader Workstation. You have the option of using the browser-based version or you can download their software and run from your PC. You are able to place virtually every type of order through their software and their system is excellent at tracking trades in your portfolio. The main feature of the Trader Workstation is speed. The whole platform was designed for quick placement of trades with programmable “hot keys” and one-click order entries. You are also able to trade stocks, futures and options from the same platform.

Commissions

Commission rates are always a hot button with commodity traders. You can look all you want, but I am afraid you will have a hard time beating their commission rates. For example, they charge less than $5.00 per round-turn on most of the electronic markets like the e-mini, which includes the exchange and regulatory fees. Pit-traded order average about $8, which includes fees. Those fees are so low, they are below the cost of what many brokerage firms pay to have their trades executed.

Opening an Account

Do not expect a lot of hand holding here. Online support is encouraged, since they obviously need to keep their costs down. IB specializes in low rates and quick trade executions. More active futures traders who are comfortable trading on their own may be better suited for this online futures broker than a new trader. You can fill-out their online application to open an account, which is a very thorough application. The initial deposit to trade futures and futures options is $5,000. It is highly recommended that you read the online manual to learn how to work their trading platform before you begin trading.

Website: Interactive Brokers
Phone: (877)442-2757

User Reviews

Reviews for this section have been closed.

 1 out of 5
Thinking about using IB? Think again!, Member hanksobe

First of all, these guys have no regard for their customers or their welfare. They failed to exercise options worth $8000, supposedly as risk prevention. I am not an inexperienced trader disgruntled over a bad trade. If you understand how GIVING AWAY YOUR MONEY somehow protects your account, you are smarter than me. Note, I am not talking about market priced liquidations. I am talking about failure to exercise options of considerable value, and getting nothing in return. Second, the Web Trader product is unreliable and borders on unusable. I have actually witnessed it change terms of my order entry on its own. That is, it changed my sell orders to buy orders, and vice versa. This can prove very costly, easily offsetting commission savings. In addition, the site constantly runs slow and frequently becomes completely unresponsive. It is almost amazing that this can happen at an online broker site. Third, the company recently adopted a policy of ""preemptive liquidation"". This means that even if you are in margin compliance, they might still liquidate you if they think you MAY not be in margin compliance the next day. This is bad. There is no way for you to know what IB's algorithms are ""thinking"". Worse, if you call Interactive Brokers and ask them which positions they are concerned about, or which positions may be liquidated, they can't tell you. IB engages in this practice even at the same time claiming it cannot accurately predict future margin requirements. In fact, more times than not, in my personal experience, IB's pre-emptive liquidations have not only failed to reduce margin requirements, but actually served to INCREASE them. I found myself constantly throwing away money trying to anticipate and ward off these pre-emptive liquidations. Why put up with this? Fourth, after putting up with this kind of treatment for too long, i tried to transfer my assets to another broker. Interactive Brokers was not cooperative with this process. There are a host of other reasons to not use Interactive Brokers, and i will add to them at a future time. Yes, their commissions are low, but in the long run, you will pay if you choose IB.

18 out of 18 people found this helpful.

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