Interactive Brokers

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Interactive Brokers (IBKR) is an online discount brokerage firm founded in 1993.[1][2] The firm was founded by Thomas Peterffy,[2] who is credited as the father of digital trading by Forbes.[3]

IBKR platform provides access to 135 market centers in 33 countries and 23 different currencies.[4] As of March 2021, 38% of IBKR client accounts were from Asia, 36% from the Americas and 26% from Europe.[5]

Interactive Brokers Group has a market capitalization of $26 billion as of July 2021.[6]

Cost structure

Interactive Brokers offers 2 primary pricing options: IBKR Pro and IBKR Lite. IBKR Pro is available to all clients while IBKR Lite is limited to US-based clients.

  1. IBKR Pro - This is the firm's standard pricing plan.[note 1] Although a small per-share commission is charged for transactions, this plan offers better interest rates on cash and margin loans and potentially better trade execution quality.
  2. IBKR Lite - This is the firm's commission-free offering for US stocks and ETFs. Orders under this plan are typically sent to market makers for executions instead of public exchanges.

Clients can switch back and forth between both plans. For more information on these pricing plans, see: Which Plan is Best for You from Interactive Brokers.

Interfaces for trading

Interactive Brokers offers multiple trading platforms including:

  1. IBKR Mobile - Android or iOS
  2. Client Portal - Desktop Web Page
  3. Trader Workstation - Flagship platform for active traders
  4. IBKR APIs - Automating trades for active traders
  5. IMPACT - Android app for sustainable investing
  6. IBKR GlobalTrader - Android app for global investing

IBKR Mobile and Client Portal are the simplest and thus most suitable for passive investors.

Multiple portfolios

You can create multiple portfolios by creating linked accounts. This can be done from your account page and creates a virtual type of account that shares the same user and password as your main one.[7]

Mutual funds

Approximately 300 Vanguard fund tickers can be purchased through Interactive Brokers. In total, more than 40,000 mutual funds from 400 fund families are accessible through Interactive Brokers as of July, 2021.

Although most funds are US based, several European domiciled funds are also available through Interactive Brokers. For a complete list of North American funds, see: Product listings from Interactive Brokers.

Interactive brokers charges $14.95 per Mutual Fund trade for US residents and €4.95 for non-US residents. The firm also offers more than 7,700 No Transaction Fee (NTF) funds where the broker is compensated with a 12b-1 fee rather than a trade execution fee.

ETFs

Interactive Brokers provides access to thousands of ETFs from 15 different countries including Irish domiciled ETFs.

For the US market, the execution fee is $0 under IBKR Lite plan while commission is $0.0035/share with a minimum execution fee of 35 cents under its tiered pricing structure under IBKR Pro plan. In addition, Interactive Brokers offers commission free trading for several ETFs for clients under IBKR Pro plan.

Product availability and international investing

The majority of Interactive Brokers clients are located outside of United States.[8] Clients can trade in over 135 market centers in 33 different countries through its platform. Interactive Brokers has offices in the USA, Switzerland, Canada, Hong Kong, UK, Australia, Hungary, Russia, Japan, India, China, Estonia, Ireland and Singapore.[note 2][9][10][11]

The following table illustrates the breadth of Interactive Broker's products offering. Note that local regulatory restriction may affect a client's trading permissions in any specific market.

Market country Stock ETF Mutual funds Bonds Options Futures Future option Single stock futures Warrants Structured products Forex Metals Indices CFDs
United States
Canada
Mexico
Austria
Belgium
Czech Republic
Denmark
Finland
France
Germany
Italy
Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom
Australia
Hong Kong
China - Shanghai-HK Connect
India
Japan
Singapore
South Korea

In addition, Interactive Brokers allows the following currencies for account funding or withdrawal.

  • AUD - Australian Dollar
  • GBP - British Pound
  • CAD - Canadian Dollar
  • CHN - Chinese Offshore Yuan
  • CZK - Czech Koruna
  • DKK - Danish Krone
  • EUR - Euro
  • HKD - Hong Kong Dollar
  • HUF - Hungarian Forint
  • ISL - Israeli Shekel
  • YEN - Japanese Yen
  • KRW - Korean Won
  • MXN - Mexican Peso
  • NZD - New Zealand Dollar
  • NOK - Norwegian Krone
  • PLN - Polish Zloty
  • RUB - Russian Ruble
  • SGD - Singapore Dollar
  • ZAR - South African Rand
  • SEK - Swedish Krona
  • CHF - Swiss Franc
  • TRY - Turkish Lira
  • USD - United States Dollar

Notes

  1. Effective July 1, 2021, Interactive Brokers removed its $10/month inactivity fee for accounts below $100,000. See: Bogleheads® forum topic: Interactive Brokers gets rid of monthly fees & minimal account values, member 'assyadh'. July 8, 2021, and Bogleheads® forum post: Re: Interactive Brokers (Best Kept Secret), member 'assyadh'. July 8, 2021
  2. For a complete list of countries available, see: Available countries from Interactive Brokers.

See also

References

  1. "Interactive Brokers LLC". Retrieved March 6, 2021., Official website
  2. 2.0 2.1 "About the Interactive Brokers Group". Interactive Brokers LLC. Retrieved March 6, 2021.
  3. "Forbes Profile - Thomas Peterffy". Retrieved December 29, 2020.
  4. "Global Access". Interactive Brokers LLC. Retrieved July 9, 2021.
  5. "1Q21 IBKR Presentation" (PDF). July 7, 2021. p. 10. Retrieved July 7, 2021.
  6. "Interactive Brokers LLC Due Diligence Memo" (PDF). July 17, 2015. p. 1. Retrieved December 29, 2020.
  7. Bogleheads® forum post: Re: Multiple portfolio / strategy in Interactive Brokers, Mindhacker. August 27, 2019
  8. "Investor relations presentation" (PDF). June 2015. Retrieved December 29, 2020. Slide 17.
  9. "Why Invest Online with IBKR?". Interactive Brokers Group. January 1, 2017. Retrieved November 26, 2017.
  10. "About the Interactive Brokers Group". Interactive Brokers Group. January 1, 2017. Retrieved November 26, 2017.
  11. "Interactive Brokers 2014 Annual Review, 10K Filing" (PDF). p. 36. Retrieved December 29, 2020.