Interactive Brokers Review
Interactive Brokers is part of international corporation known as Interactive Brokers Group LLC (IBG LLC). The subsidiaries of the group are an automated global electronic market maker and broker. The group headquarters are in Greenwich, Connecticut, but it also has offices around the world. Including Hong Kong, London, Montreal, Tokyo, and Sydney. The Interactive Brokers Group was founded in 1994, by Thomas Peterffy, the Chairman and CEO. Interactive Brokers LLC, and a number of other brand names are licensed and regulated in a number of countries. These include the FCA in the UK, US Securities and Exchange Commission, and the Commodity Futures Trading Commission in the US, and the Hong Kong Securities and Futures Commission.
Interactive Brokers LLB is the largest subsidiary of the group, and is a US broker-dealer that was formed in 1993. Based on the number of daily average revenue trades, it is considered to be the largest US electronic broker. Another major subsidiary, is Timber Hill LLC, which is a US market maker that was formed in 1992. Quite an impressive set on connections, and certainly enough to warrant us spending some time researching and writing this Interactive Brokers review.
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More than just a run of the mill Forex broker
With Interactive Brokers, traders can choose to trade on more than 100 market centers in 24 countries, including dealing in stocks, futures, bonds, Forex, options, and a number of other instruments. This can be done through one account, and with the same trading platform. This particular broker aims its services at the more experienced trader, rather than a novice, but one great feature that might interest beginners is their demo account. The trading platform can be tried out for free, without any further commitment. The perfect way to test strategies, order types, exchanges, and products, with no time limit before trading with real money.
IBs Trader Workstation (TWS) is their proprietary platform
Interactive Brokers have decided to go with their own trading platform, rather than use one of the more popular options, but this shouldn’t be seen as a negative. We feel we should mention, however, that it isn’t the easiest of platforms to get your head around, particularly if you aren’t very experienced. It is a very powerful and extremely customizable platform, that has loads more bells and whistles than an average platform such as MetaTrader 4. But with so many instruments available for trading, it is definitely a necessity. With Trader Workstation there are more than 60 different order types, that can be triggered under a number of different circumstances. Which is far more than any other Forex broker we have had the pleasure to review so far. Another word of warning comes in relation to the trading interface. Great care should be taken when setting up the many options and modifiers. As one wrong move will throw the system out and lead to some unexpected behaviour. There have also been a number of problems in relation to server outages and a daily loss of data at midnight. This is, however, a minor inconvenience, and there are ways to overcome such issues.
A number of specific requirements will keep smaller traders away
Interactive Brokers aims its services at more professional, sophisticated, and experienced traders. Its complex design and variety of trades, options, tools, and trading platform are all designed for traders who know what they are doing. There are also a few requirements to bear in mind:
Minimum deposit is $10,000 USD – Unless you happen to be under 25 years of age, when the minimum deposit drops down to just $3,000 USD.
Minimum trade commission – Trades of less than $10,000 will find themselves subject to a $2/ trade minimum commission. But as this is a broker who aims its services at traders who trade well in excess of such amount, this rarely proves to be an issue.
Minimum monthly activity – It is a general requirement that traders generate at least £10 per month in commission ($3 per month for traders under 25). Should activity result in commission less than this amount, there is an activity fee which will bring the charges up to $10.
There is a 24 hour weekday service from IBs customer support. It comes via a series of regional customer service centers located in various places across America, Europe, and Asia. There is also a quick tips section on the site where the answers to the most common questions can be found. Also available is a live chat option, email, Fax and postal customer service.
Overall, we found Interactive Brokers to be up there with the best Forex brokers, but it is not set up for smaller traders, and definitely not for those with little experience. The $10,000 minimum deposit will put many novices off, but for the serious trader IB could be just what you’re looking for.