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Interactive Brokers Review


At a glance

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There once was a time when you had to go through a brick-and-mortar broker to invest in the stock market. This broker would charge you exorbitant commissions on simple trades that might not get executed for hours or longer.

But with the advent of online discount brokers, not only have rates become much more competitive, but the trading process has become much simpler and more convenient.

One of the most popular discount brokers out there is Interactive Brokers. Let’s take a look at the features, pros, and cons of this online trading website in order to decide if it’s the right option for your investing purposes.

Key Features

ib tws

Interactive Brokers, also known as IB, offers sophisticated investors impressive tools for trading a range of instruments. In addition, it provides access to international markets by accommodating trades on over 80 exchanges worldwide. IB really shines when it comes to trading less common instruments, such as stock options, forex, and commodities.

Their proprietary platforms (e.g. Trader Workstation pictured right), which can be either downloaded or viewed on an Internet browser, are extremely comprehensive and can facilitate multiple advanced strategies. For example, an options trader can input trailing stop-loss orders, contingency orders based on the price of the option or underlying security, and trade complex options strategies involving multiple positions in a single execution.

Commissions and Fees

When it comes to commissions and fees, Interactive Brokers offers the lowest stock and option commissions in the business. Stock commissions are $0.005 per share while option contracts range from $0.15 to $0.70 per contract, depending on the price of the option and number of contracts purchased. Unlike most other brokers, IB does not charge an additional flat fee in addition to these fees and commissions.

However, there are a few additional costs to keep in mind. IB charges a minimum $1.00 commission per trade for stock and option purchases. In addition, if you don’t spend $10 in commissions every month, you are charged the difference. Moreover, if you don’t spend at least $30 per month in commissions, you must pay $10 to get access to real-time quotes. These minimums apply to total trading activity across the various types of securities.

Lastly, traders cannot open an account with less than $10,000 and they must maintain that minimum balance. Clearly, IB is catering towards more active traders who are investing with a significant amount of money.


  1. Broad Range of Investment Choices. Interactive Brokers offers the ability to trade various financial instruments including stocks, bonds, options, futures, and forex.
  2. Access to International Markets. Their impressive global presence allows you to trade equities, options, futures, and forex in 19 different countries.
  3. Amazing Proprietary Software. The trading platforms offer immense utility regarding advanced trades and strategies especially with less common instruments, such as forex.
  4. SmartRouting Technology. IB’s proprietary technology to effectively route trades has been proven to exceed industry standards on stock and option price execution.
  5. Very Low Commissions. For up to 200 shares of stock, you’ll pay only $1 in commissions. Commissions on option purchases are low as well.
  6. Desktop Trading. This is a nice perk for investors who prefer desktop software over browser-based versions. In general, desktop software incorporates additional options and is more powerful.
  7. Ability to Short Stocks. Compared to other brokers I’ve researched, IB has the largest amount of stocks available for shorting.
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  1. Fees for Not Trading Enough. Infrequent traders incur fees for spending less than $10 in commissions and for common trading tools. A $10 fee for real-time quotes is the most glaring example of this.
  2. Minimum Opening Deposit. The minimum balance requirement is $10,000, which can be steep for beginning investors or those with smaller portfolios.
  3. Research Options for Investing Ideas. IB is oriented towards sophisticated investors who already know how they want to invest, and less so towards those seeking help on the basics of investing and how to invest their money.
  4. Minimum Monthly Commissions. You have to pay a minimum of $10 in commissions every month, whether or not you actually trade that amount.
  5. Mutual Fund Investing. IB not only has a smaller selection of mutual funds relative to other brokers, but these funds also require an initial investment of $3,000.
  6. Broker-Assisted Trade Fees. IB charges $100 per broker-assisted trade.
trading world

Final Word

Interactive Brokers is ideal if you are a self-directed, experienced, and active trader who takes trading beyond general long-term stock and bond investing. Moreover, if you want to advance your ability and expertise with financial derivatives like advanced options strategies and forex, IB provides the tools to do so.

The commissions structure, fees, and minimum balance requirements most benefit high volume and high frequency traders for whom investing is serious business. If you are a novice investor who plans to trade minimally each month and simply wants to dabble, the minimum commissions and balance requirements will cost you unnecessary fees.

For those just starting out, check out our OptionsHouse review and our TradeKing review. Both of these discount brokers offer lower balance and trade minimums as well as basic stock research tools and investing ideas. But for those active traders looking for some diverse investing experience, Interactive Brokers may very well be the best option available.

Do you have any direct experience trading with Interactive Brokers? What is your overall opinion?


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The Verdict

Our rating

Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Derek Clark is a software designer and personal finance blogger who lives with his wife in Middle Tennessee. He likes to bowling, golfing, reading, playing softball, shooting, and talking about politics or personal finance. You can read more from Derek at Christian Common Cents.