Interactive Brokers

What is Interactive Brokers?

Thomas Peterffy started Interactive Brokers in 1977, and the company is based in Connecticut, United States. It presently has over one million active customers and operates in 135 markets and 24 currencies. Interactive Brokers is a multinational firm and publicly listed, registered on the NASDAQ stock market under the symbol “IBKR.”

Pros and Cons

Pros

  • A lesser interest structure that is exceptionally affordable for both casual and habitual market participants.
  • For those who seek higher-end features, Trader Workstation (TWS) was already a formidable charting and trading platform, but the update of the Client Portal web-based framework is a pleasant benefit for much fewer investors.
  • Stocks, ETFs, funds, investment trusts, warrants, futures, FX, bonds, and CFDs are among the investment options available, and they are available in 33 nations.

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Cons

  • For any of those U.K. investors searching for tax benefits, ISA and SIPP portfolios aren’t just an option.

 

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Interactive Brokers is the best option for

  • Casual and advanced traders
  • Traders who trade daily
  • Accounts with a margin.
  • Investing in options
  • Data and research
  • Investors from throughout the world

 

Fee Structure

Interactive Brokers’ pricing is divided into two categories:

  1. Tiered
  2. Fixed

Interactive Broker is a good choice for U.K. residents who don’t want to open a direct SIPP/ISA account because neither pricing structure has any custodial fees.

Interactive Brokers caters to experts and traders who do not require real-time streaming data. Traders who require real-time data must weigh the data charges to determine whether Interactive Brokers is cost-effective.

Fixed Pricing

For trades of up to £6,000 in value in Western European equities, fixed pricing charges £3 flat. A £100 trade and a £1,000 deal would both cost £3 with this fixed rate. For transactions up to £50,000 in value, the fixed rate for non-Western European equities charges £6 flat. Clients must utilize IBKR SmartRouting to take advantage of this price. Different pricing applies to overseas equities, which may be seen on the Interactive Brokers homepage.

Tiered pricing

Tiered pricing at Interactive Brokers charges 0.05 percent of the exchange rate for equities, ETFs, and warrants for trades of more than 6,000 EUR and GBP. A stock trade with an £8,000 trading value would only cost £4 at this rate (8,000 x .0005). If trade value standards are satisfied, corporate customers might get lower rates.

Interactive Brokers offers commission-free investments or funds that start at EUR 4.95 (or similar) with no custody costs. Interactive Brokers is the only U.K. broker we’ve evaluated that provides funds without custodial or dealing costs, with over 8,300 commission-free funds accessible.

Clients automatically gain free delayed market data on applicable exchanges. Customers must subscribe to each trade separately for real-time streaming market data, which costs £1- £10 a month. LSE U.K. Top of Book L1 market data, for example, costs £5.00 per month.

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Trading regularity and account balance are the two important components aspects to think when estimating yearly share dealing fees.

Features Interactive Brokers
Minimum Deposit £0.00
Share Trading: 0-9 Deals/ Month £3.00
Share Trading: 10-19 Deals/ Month £3.00
Share Trading: 20+ Deals/ Month £3.00
Annual Custody Fee: £0 – £250,000 0%
Annual Custody Fee: £250K-£500K 0%
Annual Custody Fee: £500,000 – £1m 0%
Annual Custody Fee: £1m and over 0%
ETFs – Fee £3.00
Investment Trusts – Fee £4.95
Telephone Dealing Fee £25.00

 

Margin Rates

The low rates at Interactive Brokers will help margin traders. The highest margin rate for IBKR Pro clients is 1.58 percent, with NerdWallet users receiving an additional 0.25 % discount. It’s 2.58 percent for IBKR Lite. These rates relate to amounts from $0 to $100,000; bigger balances result in lower rates. The broker offers a blended rate dependent on the size of the margin loan, and it provides a calculator on its website to assist investors in swiftly calculating their balance.

Mobile App

In comparison to other apps on the market in the United Kingdom, IBKR Mobile is a fantastic app. On the Client Portal web platform, there are approximately 70 technical indicators as well as the majority of the studies. The software is strong and simple to use, and it is one of the best mobile products in the United Kingdom. The mobile app is now available in nine languages and offers cross-platform order presets.

Other Tools

Trader Workstation (TWS), Interactive Brokers’ flagship platform, is a downloadable system that is tough to use yet filled with trading capabilities.

Interactive Brokers provides the browser Client Portal interface, which was substantially enhanced in 2021, for investors who do not want all of the bells and whistles or are less qualified.

Client Portal is far more user-friendly than TWS, while still providing a wealth of useful tools for trading and managing a basic portfolio. You may use the tool to manage your account and watch list, as well as obtain market updates, research assets, do graph analyses, and execute trades. Now it additionally offers a powerful charting tool, which is a white label version of the TradingView platform. The improved charting tools are a plus, giving a high-quality fundamental and technical facility for those who need it while being user-friendly for others who aren’t as skilled.

While not for beginners, Trader Workstation includes a wide range of sophisticated trading tools, such as the Mutual Funds Scanner, Bonds Scanner, Options Strategy Lab, Volatility Lab, Risk Navigator, Market Scanner, Strategy Builder, and Portfolio Builder, to name a few. Professional traders will be awestruck by TWS’s strength and personalization, which includes over 100 distinct order types.

TWS has 137 chart patterns and 9 sketching tools from Interactive Brokers. Everything can be customized, allowing the user unlimited power, albeit some of the more complicated features can be difficult to use.

Thanks to innovations like “for you alerts” and IBot, Interactive Brokers is at the forefront of incorporating AI into stock trading. “For you alerts” give information on open orders, dividends and interest received, as well as connections to useful tools. IBot serves as a chatbot that uses artificial intelligence to respond to consumer inquiries (or voice in the iPhone app). Among other things, requests might involve initiating trades, requesting comprehensive bids, or just getting account information.

Education

IBKR offers a variety of investor education programs to both customers and the general public. Traders Academy (revamped in 2020) is a digital, on-demand resource that provides an organized, rigorous curriculum for finance experts, investors, educators, and students interested in learning about investment vehicles, markets, exchange rates, toolkits, and capabilities offered by IBKR’s trading systems.

Quizzes and examinations enable the students to enhance their performance towards educational activities while also allowing them to learn at their speed. Descriptions to types of investments such as choices, futures, forex, international trading, and bonds, as well as how to use margin, are examples of course offerings. The numerous IBKR technology platforms and applications are covered in some courses. A trading glossary and a frequently asked questions section are available on the website.

Daily webinars are offered by IBKR and industry professionals. These seminars cover a wide range of subjects, including platform and tool how-to, options education, foreign trading, and more. Hundreds of tapes in several languages, including English, Spanish, Chinese, Italian, and French, are accessible on demand.

Research

Interactive Brokers provides a complete set of research instruments for experts. Traders may back-test strategies and do organizational financial analysis using a variety of screeners.

 

Stocks, ETFs, and funds all come with several investigations, including analyst ratings, research papers, predictions, ESG ratings, and more, for casual traders.

Fundamentals Explorer

The Fundamentals Explorer tool is available through TWS and Client Portal. A business summary, corporate news, a chart with numerous indicators, analyst ratings, financials, analyst predictions, ESG ratings, and more are all displayed when you pull a stock quote. Even research papers from organizations like Reuters are used in news stories.

Invest in research

The analysis contains a style matrix that breaks out the fund’s growth target, a breakdown of fund holdings, and performance compared to peers for hundreds of U.K. funds. For certain funds, Lipper Leader Ratings are also available. Total return, consistent return, conservation, tax advantages, and costs are all rated on a scale of 1 to 5. Lipper Ratings are more generally accessible for US funds, however, they are also available for several major UK fund families.

Customer Service

Six days a week, Interactive Brokers provides phone, email, and chat assistance 24 hours a day, seven days a week. However, because there are no real locations, you won’t be able to organize an in-person meeting if it is something you prefer.

Whereas many brokerages are now only accessible to investors in the United States, Interactive Brokers is accessible in 218 countries across the globe. As previously stated, Interactive Brokers enables consumers to trade on 135 exchanges in 33 nations and fund and trade accounts in 23 multiple currencies.

Is It Suitable for You?

Interactive Brokers has long been a good option for enthusiastic traders, particularly those who can take advantage of the broker’s lower volume price. Even amateur traders may find Interactive Brokers to be a formidable challenger, thanks to the provision of free trading with IBKR Lite. Beginner investors, on the other hand, may prefer a broker that provides more guidance and instructional tools.

Summary

Interactive Broker is a champion for specialists and regular U.K. businessmen looking for an organizational trading system with a few of the smallest commissions for international commerce, especially if you don’t mind the lack of SIPP or ISA options, which is the only chink in its alternatively remarkable armor.

Client Portal and IBKR Mobile also make it simple to study, trade, and evaluate your investment without needing to master the TWS platform’s complexity.

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