IBKR Interactive Brokers Review
From a broker comparison you will find in the best case the test winner and the top broker that offers its investors the most favorable conditions and the most diverse trading instruments possible. In this article, we want to look at the Interactive Brokers experience. This is one of the largest online brokers that currently exist on the market for domestic and international trading. Accordingly, you can access a wide range of trading instruments. This includes ETFs, futures as well as stocks and CFDs, commodities and currencies as well as options. With this following guide, we would like to help you get started with Interactive Brokers and answer the most frequently asked questions.
Who is Interactive Brokers?
Interactive Brokers is abbreviated as IB. The predecessor of this online broker is Timber Hill. It is an American stock broker founded by Thomas Peterffy in 1977. Today it remains to say that Timber Hill was one of the first brokers to work on the American Stock Exchange market and the trading floor with the portable computers. The associated GmbH in Germany was founded in 1990. At that time, the main focus was on electronic trading with regard to the German Futures Exchange, or DTB for short. This became Eurex a little later. In 1993, Timber Hill and Interactive Brokers merged to form Trader Workstation – TWS.
Already in 1997, the volume of equity derivatives listed on the stock exchange at Timber Hill online included 5% worldwide. In total, the broker came up with 15,000 transactions. A respectable selection, considering that the digital market was still in its infancy at that time. Already in 2000, an average of 6% of the global volume was traded via this network. In 2001, Timber Hill GmbH changed its name to Interactive Brokers Group LLC.
In 2003, the company was already executing 12,000 of the world’s listed index and stock transactions. In 2007 the company went public. Per share, Interactive Brokers issued $30.01. Today, the company is listed on the NASDAQ with the abbreviation IBKR.Anyone who is extensively involved in securities trading and wants to learn more about the shares and international trading, can not get past the Interactive Brokers.
Top brokers in price and revenue worldwide
Time and again Interactive Brokers top the ranking for the cheapest brokers, the last time the broker climbed the podium in 2009 in terms of the cheapest brokers. This was the fifth time in a row. In 2009, the provider also launched its trading app iTWS, which was available for the iPhone. In the statistics, it came out that the prices keep improving when it comes to the US stocks and the options. Whereas the THG statistics is an independent analysis, which in turn is carried out by the company IHS Market.
In 2011 Interactive Brokers was selected among the largest US online brokers when it comes to the average yield of transactions per day. In technical terminology, we are talking about the so-called Daily Average Revenue Trades. For investors, it is precisely these revenues that play a decisive role. That with the most favorable online broker, which on the trading platform only small yields are made. Basically, investors want to get the maximum out of their assets with an online broker. According to relevant Interactive Brokers experience, this is easily possible with this provider.
Since 2011, there has been a new user interface on the Trader Workstation with the TWS Mosaic interface. In 2017, the broker received the award for the fifth time as the best online broker in trade magazines such as Barrons. Worldwide, more than 1400 employees work on the TWS Mosaic interface – every day, investors execute over 1 million transactions with this online broker. Thus, this provider alone has an equity capital of a considerable 5 billion US dollars. These are enormous values, with which almost no German online broker and certainly no Neo Broker can keep up. However, first and foremost, this provider is all about stability, years of experience and the wide range of products that traders benefit from.
This company is known for its very conservative approach and business policy. For this reason, Interactive Brokers has also not been directly affected by the financial crisis, making significant losses. For years, this company has been operating consistently and profitably, regardless of the political and economic movements on the world stage. This is remarkable and today it ensures that more and more users find their way to Trader Workstation.
What markets can be traded at Interactive Brokers?
One of the direct benefits is the market access to options, forex, futures and stocks as well as the fixed income securities, CFDs and ETFs. All this is possible only with an account at Interactive Brokers. In turn, the broker allows its traders to trade with over 125 international exchanges, spread across 31 countries. The most popular exchanges include Europe, North America, Asia and Australia. Interactive Brokers brings all these linking points together in the Trader Workstation.
Additionally, traders can trade ETFs in 26 countries. Commodities, futures and options are offered in 35 market centers worldwide. More than 15 trading options are available to the trader. In addition, the complex financial instruments such as CFDs are applicable to all available and common stocks, currencies and indices. Currently, the current offer in this area includes 7,250 stocks. With regard to Forex trading, Interactive Brokers scores with 100 currency pairs.
Security: How is Interactive Brokers regulated?
In fact, there is no minimum deposit at this online broker. You can get in from very low stakes, which should appeal to private investors in particular. At the same time, Interactive Brokers never puts the safety of its investors at risk. The Financial Conduct Authority is entrusted with the regulation and supervision of Interactive Brokers. Due to the legal and worldwide supervision, the common risks can be avoided. In this way, Interactive Brokers performs well in the test, as does Trader Workstation.
Attention: Currently there is no legally regulated deposit insurance. This is not because Interactive Brokers does not care about the safety of their investors’ deposits from Europe. It is a certified company from the USA, which does not fall under the legislation of Europe. According to it, all the accounts are managed as so-called segregated accounts. Interactive Brokers stores its own assets separately from the investors’ assets, thus providing massive security.
In addition to these segregated accounts between Interactive Brokers and equity – the US Securities Investor Protection Corporation (SIPC) steps in if the very unlikely event occurs and IB goes bust. All other non-U.S. territory positions and cash positions can be protected and hedged again through a U.K. company. Sudeck, the Financial Services Compensation Scheme (FSCS), protects the assets of 50,000 British pounds.
How can I register a demo account with Interactive Brokers?
It is very easy on the home page to open a demo account without any complications. This can be done directly from a menu bar at the top of the screen in the right corner. You can recognize the demo account by the inscription Free Demo. Next to it is the Open account button. This step should be taken later, when you are satisfied with the offer and trading and want to deposit your own money into the account.
Based on the Interactive Brokers test, the account opening process is straightforward and very fast online. For this, you need to have a few important information ready to completely fill out your personal account starting from the Interactive Brokers experience. This includes the name with the appropriate
proof of identity,
the address,
the place of residence,
the country of birth and
the date of birth and
citizenship.
Where are you resident for tax purposes? In addition to this, Interactive Brokers asks for your name and address from your employer and would like to receive information about your personal income and five assets. What are your securities trading experience and investment goals? The online brokers are required to put investors through their paces. This is to avoid the risk of a beginner simply putting a lot of money without knowing about each financial instrument, its features and risks.
The conditions at Interactive Brokers
At Interactive Brokers, investors are offered tight spreads, which are accompanied by strengthened liquidity and very good conditions. This applies, for example, to foreign exchange trading. A market share of more than 60% on the global Internet banking market speaks for this provider. In fact, through Interactive Brokers it is possible to provide the cost quotes with an accuracy of one tenth PiP.
Among the most popular traded products at this broker are.
ETFs,
warrants,
futures and
options and
stocks.
There are two different commission models at Interactive Brokers, such as the tiered model, where fees decrease as trading volume increases. Alternatively, Interactive Brokers allows investors to calculate and set a fixed price commission for each financial product. Alternatively, there is a percentage trade value that is recalculated depending on the trade value. Basically, it should be about bringing you the fixed terms through Interactive Brokers that fit your trading behavior and budget.
Pros / Cons
How much does it cost to trade through Interactive Brokers?
You can trade the US stocks from $0.05 per share. The mini malst of the fee is one US dollar. The fees for German stocks are 0.1% calculated on the transaction volume. Interactive Brokers charges a minimum fee of four euros per order and is therefore not the cheapest online broker in a direct comparison. The commissions for the options depend on the volume of the contract at Interactive Brokers. You can access the German stock options with this US online broker for a fee of 1.10 euros per contract. For example, Interactive Brokers offers the safe DAX, which comes with a commission of 1.70 euros.
The cost of the futures options or the US futures ranks at around $0.85, which is per contract. For the German futures, you pay Interactive Brokers a fee of two euros per contract. The commissions that accrue when trading forex through this broker are again dependent on the amount traded each month. It is best to call up the current price-performance list directly from Interactive Brokers. In the Interactive Brokers test, the provider scores with transparency and a clear listing of the costs and fees that investors have to pay plus if you work with one of the market leaders.
Index CFDs cost from 0.005% at Interactive Brokers, which in turn accrue per execution. If the view goes to the European shares and CFDs, the commissions amount to 0.02% or else to 0.05%, which again applies to each execution of the broker. This is also true for CFD trading, here the fees you pay to Interactive Brokers are the same. If you hold the CFD positions beyond the close of the market, you will have to pay interest for each day. It is a blended rate that is payable depending on the amounts.
Interactive Brokers leverage and margin requirements.
There is a European Securities and Markets Authority since August 1, 2018, which are referred to as ESMA. This authority specifies so-called thresholds. In return, Interactive Brokers commits to liquidate these open positions and thus provide qualified capital. In addition, Interactive Brokers determines chief positions and margin requirements. This is the amount of collateral that an investor must bring to speculate with a certain capital and dispose of his money on the exchange.
In August 1, 2018, there are going out from Europe and the Securities and Markets Authority thresholds. These refer to the minimum inclusions. In this regard, Interactive Brokers undertakes to liquidate all open positions. This is the case whenever the qualifying capital of the CFD account falls below the 50% mark. What is meant is the margin requirement that applies to all CFD positions. In addition, there are the in-house requirements of Interactive Brokers from the UK. These go back to the historical volatility of the underlying assets as well as individual influencing factors. These are the main requirements that are attached to the trade. It doesn’t matter whether trading is done in Euros or USD. The margin requirements for all equity CFDs are set at 20% with regard to retail clients. The margin requirement also applies in this area. The minimum of the large in indices is 5%. Otherwise, the minimum requirements are 10%.
In addition, there are further margin requirements at Interactive Brokers Group as far as the major forex pairs are concerned. This is set at 3.33%. You can trade the smaller currency pairs starting from a margin of 5%. In addition, there are so-called exotic currency pairs at Interactive Brokers UK, which in turn oscillate between 10 and 15%.
For the DAX futures, for example, the margin requirements come to โฌ13,491 and with regard to the over night values to โฌ26,983. However, these values can also be adjusted depending on volatility. Thus, they can be higher depending on the daily level. For the US Dollar/Euro, the spread at the broker Interactive Brokers is 0.01 Pip. As for the competition, Interactive Brokers U.K. Limited can not be faulted in terms of service. Thus, as a customer, you do not pay a cent for the deposit and services. You can also trade securities with the staff on the phone and do not have to expect any additional costs here.
Does Interactive Brokers automatically deduct the final withholding tax?
With this provider, the final withholding tax is not withheld. This means for the traders, that you make your entire capital including profits and earnings available in full for further investments. In the following year, it is then the taxpayer’s responsibility to declare the investment income from Interactive Brokers in the personal tax return.
The custody account management at Interactive Brokers llc is carried out in Great Britain. This brings with it a distinct advantage: you do not have to pay the final withholding tax until the end of the year in your tax return. You do not need an exemption order at Interactive Brokers.
At Interactive Brokers there is a hedge fund portal. This is a portal in the online version, which is fundamentally different from the traditional Capital Introduction program. As a client of Interactive Brokers you can market the funds as a qualified buyer or investor. As one of the leading CFD brokers, the provider convinces all along the line with transparent services and a wide range of investment opportunities.
What about the experience with Interactive Brokers?
It remains to be said that the experience with this broker is very good. Traders are positive about the services and the offer as well as the security. They can trade stocks and CFD per order at a reasonable price and keep track while trading. Customers thus benefit from good support at this broker, which is available in many different languages. Each broker who is part of the team brings an experience of over 20 years.
Especially in the area of custody, pricing and execution, the platform scores with strong services for all German customers and on the international level. This leads to consistently positive experiences, which is not least due to the comprehensive offer for all customers.
Especially in the training area, you can take seminars, webinars and tutorials without fees. A free demo account forms the rounding off, for all beginners who first want to get an overview of the securities, index CFD investments and Forex investments. A customer does not have to pay any fees with a demo account yet and can benefit from the comprehensive range in the securities account and on the platform.
Contact the customer service of Interactive Brokers
Every customer has the possibility to contact the German trading platform directly via email and receive an answer from the support within a few hours. In addition, there is the possibility of contact via chat, telephone and digitally. Of course, the trade desk is also available at any time. In this way, questions and problems should be resolved as quickly as possible. The platform is logically and intuitively structured, so you will find comprehensive information on the individual CFD options and investment opportunities.
Deposit and withdrawal at Interactive Brokers
Based on the current experience, the management of the Forex account is smooth, which also applies to the deposit and withdrawal. You need a deposit memo to deposit money into your account. You set this note directly in the account management. In most cases, the deposit will take no longer than two business days to be credited to a securities account. For withdrawal you need a reference account at Interactive Brokers, which you specify when opening the account. When trading, you can make a withdrawal at any time. The duration of the transfer depends on the credit institution or bank you are a customer of. Interactive Brokers offers a comprehensive and customer-friendly service, which stands for short times and quick solutions.
On the German trading platform you really use very practical trading tools for free. For example, Interactive Brokers offers the trading software Trader Workstation – TWS for short. In this context, numerous analysis options are available to you. With it, you can, for example, observe the development of the prices and how the stocks and futures as well as the Forex investments change. Let the platform show you the key figures and profiles and the Forex data to analyze them and draw conclusions for your own strategies when trading. In addition, you have insights into the order book and time and sales at any time.
When trading, you can also use Chart Trader. It is a real-time chart that you can adjust to your needs via 70 indicators. Another beginner-friendly tool in trading is Book Trader. Through it, you can quickly enter and submit your orders. It only takes a few clicks for you to select an order in the order book and then submit it to the appropriate exchange. Basket Trader is a trading tool that allows you to create an index of securities and trade them simultaneously. You can change all the values in a basket or in an index at any time. Thus, the tool is suitable for the investors who trade different positions simultaneously at regular intervals through the platform.
In addition, you can use the Portfolio option. This tool is a kind of risk profile that allows you to keep an eye on the Forex options. You can set your some goals and analyze the data based on that.
In addition, Interactive Brokers has a programming interface – API for short. With it you can create your own trading software. In most cases, however, you will need several years of experience and knowledge in the programming language and in terms of programming protocol in trading.
For those who want to trade on the go, iBot is recommended. This is a text-based or voice-based interface, but it is only suitable for desktop trailers with corresponding years of experience. You get all the information you need through this platform in the test. In this way, you have the opportunity to complete trading and place your own orders with your own voice.
The iBot understands voice commands and text commands if they are in an easily understandable language. In the test, it then immediately delivers the information. You do not have to use a specific sentence structure or technical language for this. In principle, CFD trading and social trading is about using such tools to make trading even easier and more enjoyable.
Trader Workstation TWS & the Option Trading
A powerful tool allows you to trade options at will. We are talking about Trader Workstation TWS. You make the analyses according to any price criteria and can have the data displayed visually. This includes the respective risks and Cinar Yen with regard to the call and put options, which they set for the maturity and for certain time periods. Interaktiv Brokers offers a matched returns and risk profile for individual trading strategies with this options portfolio and algorithm. Cost-effective social trading solutions are to be found above.
Interactive Broker Experience: The strengths at a glance
Interactive Brokers offers US stocks and indices. The IB Risk Navigator is available for comprehensive security. It is a risk management platform. You can take a look at trading through it. In addition, the Interactive Brokers algorithm takes a look at the current risk situation. Especially about the options portfolio, the algorithm allows an extremely cost-effective solution to achieve your set goals in trading. Furthermore, Interactive Brokers has Securities and Exchange Commission for comprehensive security and Commodity Futures Trading Commission – which in turn ensures control and regulation over the EU.
Continuously, the algorithm knows the entire market and then provides the latest results every 30 seconds. This way you can’t miss anything. With this CFD broker, you can be sure that the best results will always appear on the dashboard. For German customers, this is an absolute must, because in the test you only trust the safest brokers. In the data query you have the possibility to change the details again and again and automatically adjust the list of results. Attention, you will lose money with any Forex broker if you do not inform yourself about the risks beforehand.
Deposit protection is available via the mobile version and the desktop version of Interactive Brokers is available. This includes EU regulation and protection of their personal assets. In the event of insolvency, your financial assets are fully protected to a certain extent via the deposit insurance. You do not run any risk here with the certified brokers like Brokers Interactive. In addition, you use their depot free of charge.
Analysis & optimization of trading options
Among the complex option orders is the option strategy lab. These, in turn, work on the basis of prices and volatility. Based on this, you create forecasts that help you to assess the dangers logically and place your money effectively via a test. Based on this, a list of acute trading strategies appears online for German clients. In the current test, you have the option to order the results according to different criteria with the CFD broker. Filter by the respective strike price and maturity date, as well as the premium.
If you the potential profits and losses over the scan results off. About it you get an overview of the ratios of risk and return in the practical test. The CFD broker offers you via this chart a comparison option for the current performance and the Forex strategies that sSe can be displayed graphically.
This includes components for the strategy and for the details and parameters that affect a Forex or CFD order in the test. Pay attention to how the fees are in terms of currencies. For example, it makes a difference whether you use Euros, US dollars/ USD or British pounds. Depending on how many USD per order you sit, you can then determine the losses or gains when translating to the other currency consequently. With regard to USD, you have the possibility to start from 0.65 Euro per order. A minimum deposit of 10,000 USD is associated with these stakes.
IB Test: Research and Extras
Another unique selling point with this broker is the comprehensive market analysis and news subscriptions. This is accompanied by a handy research platform through which the CFD broker helps its investors to invest the money in the most profitable way. TWS is such a practical feature through which the CFD broker summarizes and makes available its most important news and data. In addition, practical research services are available for you to choose from free of charge. Of course, you can use these as a beginner via the demo version right after opening the account with this Forex broker.
Beware: you will lose money if you do not inform yourself sufficiently about CFD investments and the impact of margin beforehand. Anyway, you should only use free capital. About the deposit insurance, the assets are protected. However, you can always lose your money if the prices and the order do not turn out as you expected.
Interactive Brokers Experience & Education
Online, the platform offers not only deposit protection and EU regulation, this broker scores with a wide range of education. Take a look at the Trader Academy, this is peppered with helpful services and products. In the education center you can access practical digital tools as well as a filter bubble, in which difficult terms are explained.
At the latest when you have taken a look at the Trader Education Center at this Forex broker, you will understand the digital tools around financial products as well as regulation and margin much better.
In the courses you can acquire a comprehensive knowledge. To do so, access the technical analysis and fundamental analysis section. Here you will find various practical tools that will help you navigate the platform.
You gain access to Interactive Brokers webinars as soon as you open a securities account on the platform. Here, the most common trading topics are available to you. You can actually have all the world markets explained to you in a few minutes. In addition, you should use the IBKR video tutorial for yourself. Behind it are a variety of different courses in which you can learn more about various topics, such as the Trader Workstation or the various TWS trading tools. Furthermore, you can learn about stocks, options, futures, securities and bonds in this area. Get to know the individual tools better step by step and also access this area in the app. The essential terms are explained in more detail in the IBKR glossary.
The Interactive Brokers App
Interactive Brokers offers a trading app – IBKR Mobile. The application is available once through the Google Playstore and through the Apple Store. It combines in itself all the essential functions in a mobile app and can be accessed through your own account. Of course, you can also trade via the app. Use the trading tools and control all order types on the go.
From now on, you are always available on the go and always have all 50 data sources at hand. Here, too, the TWS trading platform scores across the board. The advantages are immediately obvious, via the mobile app you can trade futures, stocks and options as well as currencies and bonds on the go. You call up all charts and streaming quotes in real time, giving you a compact overview of your stocks.
Note: Based on the Financial Conduct Authority (FCA), every investor has the chance to be classified as a retail client or a professional client. The broker Interactive Brokers UK can also voluntarily classify a client as a professional. The prerequisite for this is a qualitative review and test. This is accompanied by further discounts and lucrative investment opportunities with regard to the Magin, the mobile app at the Forex broker and the CFD offers.
What do investors pay Interactive Brokers in case of inactivity?
Basically, there are no account maintenance fees on the trading platform for the account you open. If the investor’s commissions exceed 10 USD in a calendar month or if the account capital is over 100,000 USD per calendar month, the whole thing remains free of charge as well. If the account does not meet these criteria, Interactive Brokers charges a fee of 10 USD. By and large, the provider remains transparent in all areas.