General Description: Interactive Brokers is a direct access brokerage serving active and professional traders. The firm offers a sophisticated trading platform and the ability to trade multiple financial markets around the globe. In addition to serving active traders, Interactive Brokers also offers a variety of services to financial advisors and other institutional investors. However, visitors to this site will probably be most interested in the firm’s rock bottom commission rates and comprehensive options trading capabilities.
Features: Interactive Brokers is perhaps the only firm to offer traders the tools and capabilities to trade multiple financial markets in one convenient location. The IB Universal account allows traders to buy and sell stocks, options, exchange-traded funds, single stock futures, and futures within the same account. In addition, the system allows trading in a wide array of international markets (the UK, Australia, Japan, Switzerland, etc.) from one Trader Workstation screen. The transaction history and positions for all investments are also reported in a single statement.
Additional Services: In addition to providing trading in multiple financial markets, Interactive Brokers offers a variety of services for tech savvy investors. A free demo is available on the firm’s site and allows traders to test drive the trading platform before opening an account. The Application Program Interface (API) gives traders the ability to program their own add-on applications in Excel, C++, Java, and Visual Basic. In addition, the mobile trader feature provides clients the ability to trade the markets via mobile devices (phones, PDAs, Rocket Phones) from anywhere around the globe.
Options: Options traders use Interactive Brokers’ TWS system to create combination limit orders for options and spread orders for futures. Traders can also create unique combinations by establishing a position one leg at a time. At this time, the TWS provides templates for the following option strategies: vertical spread, calendar spread, futures calendar, diagonal spread, straddle, strangle, synthetic put, synthetic all, box, conversion, and reversal.
Stocks: Stock trades cost just .01 a share with a $1.00 minimum. Futures trades are executed for $2.40 and Single Stock Futures are traded for $1.00. Options trades cost just $1.00 a contract.
Account Minimum: $2,000 to open an account.
Quotes: Free US Securities & Commodities Bundle (which includes stocks, options and futures.) $20.00 extra fee for Nasdaq Level II quotes. Check web site for latest fees for quote services for international markets.
Miscellaneous: Interactive Brokers allows traders to post thoughts or questions in a discussion forum, and participate in chat sessions with other traders or management. The firm also handles specialized orders such as baskets, trailing stops, and contingent orders. Broker-assisted orders are available in the event of a system outage, but are not encouraged otherwise. Instead, Interactive Brokers is best suited for active do-it-yourself traders that want a one-stop shop for direct access trading in multiple financial markets at deep discounted commission rates.