Interactive Brokers Review

Interactive Brokers Platform Review 2024

In this Interactive Brokers Review – Trader Workstation, we will cover IB’s platform (TWS for short) and explain how it has been a simple yet powerful ally to the active trader and investor. Right off the bat, they are a good broker, and their order executions and short locates are solid. However, their charting platform is old-fashioned and needs updating, and their customer service could be better.

Chart by TradingView

Interactive Brokers is well known for two key elements: their international trading platform and low fees and commissions. As a newbie to the trading world, everything can seem overwhelming. But that doesn’t have to be the case. With IB, everything a beginner needs is at their fingertips.

Here’s a sample of what you get if you choose to go with them as your broker:

  • Simulator: They offer a great simulated trading platform to practice trading
  • Choice: You can trade stocks, options, futures
  • Customization: A customizable mosaic trading platform
  • Trader Work Station (TWS):  Advanced algos and trading tools
  • IBKR WebTrader (PRO): Web-based trading platform.
  • Mobile:  Trade on the go from IOS and Android devices
  • IBot: Find the info you need without special syntax or financial jargon
  • Freedom: Choice to trade internationally in over 100 markets in over 24 countries.

We started using IB’s TWS as a secondary broker in early 2016, as it came highly recommended by another experienced trader in our stock market community.

Looking back, that seems like a typical way people learn about IB. It is very popular globally among the “hardcore” trading community, but it is all well suited to the casual investor. It has spread rapidly through word of mouth and has a great reputation for being a reliable and versatile brokerage firm. Check out other Interactive Brokers review articles online to see.

Interactive Brokers Order Entry

In this Interactive Brokers review, we have customized the TWS Mosaic. Top left, we have Order Entry. Top Right, you see Time and Sales – these are all the trades being filled in real time, often referred to as “reading the tape. In the bottom right, you have Level 2 market data; in the mid left, you can see the daily chart of $X; in the bottom left, you see your activity window, where all your active and completed orders will show.

1. Mosaic Layout

From day one, we were impressed with its simple yet alien-looking layout. However, while we continue to use and enjoy TD Ameritrade’s Thinkorswim platform, there are some stark differences between the platforms.

Also, free to take our free Interactive Brokers Platform setup course if you want help getting started with them.

First, when you download and install TWS, you will be greeted with their “Mosaic Layout.” This differs from the tab-based layout you may be used to with TOS.

You will want to arrange your Mosaic to your preference and liking. However, you also may notice that you can only fit some of the windows and charts into a single mosaic layout.

This is why it pays to have larger or multiple monitors when trading! First, check out our day trading computer setup post to get a handle on the right gear to power your platform. Next, on the top right, you’ll see “Layout Locked.” Click this, and you can re-arrange as you see fit.

2. Trader Workstation

One of the best features of the Interactive Brokers Traders Work Station (TWS) platform is its shorting ability. Compared to other brokers I’ve researched, IB has the most substantial stocks available to short.

Additionally, we would like to use a minimum of TWO screens for TWS. However, you may find that is not necessary. However, for day trading, this is needed. We typically will use the setup above and group the remaining windows we need in a separate window. I’ll talk about that later. Next, we want to talk about the strengths of Interactive Brokers. 

COURSE
Day Trading Course Options Trading Course Futures Trading Course
DESCRIPTION Learn how to read penny stock charts, premarket preparation, target buy and sell zones, scan for stocks to trade, and get ready for live day trading action
Learn how to buy and sell options, assignment options, implement vertical spreads, and the most popular strategies, and prepare for live options trading How to read futures charts, margin requirements, learn the COT report, indicators, and the most popular trading strategies, and prepare for live futures trading
INCLUDED

3. Fast Trade Executions

IB has lightning-fast trade executions. Interactive brokers have created a “Smart Routing” system to provide traders with lightning-fast execution speeds. This means IB searches for the best fill on your option or stock, depending on the time of your order, to execute it immediately.

IB boasts that this adds up to real money in your account. In addition, we enjoy that there is very little lag, and we have not found a faster trade execution with any of the other brokers we have tried.

4. Tools

IB is jam-packed with tools. Whether you are an advanced trader, investor, or beginner, there is something for everyone. Every type of scanner imaginable is available: fundamental, Options, Volatility, News, Bonds, Complex Order, and Trades scanners

We like the free analyst research reports and event calendar, and it even has an “Alexa Style” voice-activated information window called Ibot.

Ask questions about a stock symbol, and it will retrieve the information you are after. IB has thought of everything regarding tools, and you could honestly take a year exploring all the various tools at your disposal. You can even stream Bloomberg TV within the platform!

Access to the global markets, Futures, and FX. There are no limitations when it comes to global markets. Margin is great at IB and has the lowest rates of any broker, according to Barons. So that you know, no margin is available on FX unless your account is 1 million.

5. Paper Trading

To become a consistent trader, it’s important to make at least a couple hundred trades in your Interactive Brokers platform account first to become comfortable with the emotions of trading before trading with real money.

IB paper trading accounts become much easier to navigate the more you practice—focus and practice on making winning trades rather than making big money. We would rather see you take small positions and work up to bigger trades to condition and control your emotions. Most importantly, ensure never to trade with money you can’t afford to lose. 

Trading is a challenging skill to master, and there is no set amount of time you should practice till you one day wake up a good trader. After that, it’s a matter of discipline, respect, and technical analysis. Master the market by mastering yourself.

Interactive Brokers Fees and Commissions (Pricing Review)

Interactive Brokers is known for having some of the lowest fees and commissions in the industry with a fixed and tiered fee structure. And, like most brokers, prices differ depending on the markets traded. In North America, IB is only .005 cents per share. For example, 100 shares worth a 25-dollar stock would only cost you $1.00 in commission. Compare this to the $5-7 that most brokerages charge, which adds up quickly. Options are also very inexpensive to trade on IB.

Option contract commissions are calculated by the premium and the number of contracts. Contracts will cost you as little as .25 cents! (pricing subject to change)

Interactive Brokers Options Strategy Lab

The Interactive Brokers review picture above is a screenshot of the option volatility lab. We like this tool because it shows a list of options plays you might want to take, along with probability and ROI, all calculated depending on what you “expect” for a percentage price move (based on your charting skills!) 

Interactive Brokers Shorting Review

One of our favorite features of the Interactive Brokers platform is locating shares to short. IB even has a shorting tool that you can open that displays the number of shares available in real-time. This is awesome when looking to short a stock and seeing traders borrowing shares in real-time. In addition, this lets you know many others are shorting the stock at a key area of support or resistance, giving you an early indication of what the mob is thinking. 

We also love that IB has a “Mosaic” that allows you to move windows and sections around in the best format. Most brokers give you a platform, and while you can customize it, you are limited to where your windows are located within the platform. With IB, you can click and drag your windows around where you see fit and lock them in place. In addition, you may save several different layouts you like for certain types of trading.

Green Dot

Another big thing we like is that IB has a little green dot that is either dimmed or illuminated depending on whether it has shares available for borrowing right on the order entry screen.

This is fantastic because as your scanner picks up a stock, and you wish to check it out in IB, you’ll know immediately if shares are available to short at a glance.

You can expand additional information by hovering over the dot and opening the SLB tool’s stock symbol. This tool will show you the shares available, and you can see shares being covered or borrowed in real time! This is incredibly useful information.

Hotkeys

The interactive Brokers platform is great for hotkeys. They have very versatile editable hot keys with only minor limitations. If you’re going to be a casual day trader, not trading huge positions, their hotkeys work great. Some of the most common hotkey configurations will look like this:

C = cancel
B = buy limit
Shift B = buy market 
S = sell limit
Shift S = sell market
arrow up = increase price
arrow down == decrease price

The TWS mobile app is one of the best trading mobile apps. We wish it had more indicators, but you can only use many on a mobile platform. Nevertheless, we found the mobile app clean and fast, and of course, we experienced the same speedy executions as usual with the desktop.

Interactive Brokers Platform

Interactive Brokers Pros and Cons

IB is ideal if you are an experienced, active trader. The low commission structure, fees, and minimum balance requirements most benefit high-volume and high-frequency traders.

Those for whom investing is serious business. They are combined with access to international markets, ideal for those looking to dip their toes in faraway waters.

It’s also most certainly for those wanting to save on commissions, which is probably most traders. Interactive Broker’s commissions are some of the lowest in the entire industry.

On the flip side, beginner traders may find TWS somewhat overwhelming. Using the advanced features will require a steep learning curve beyond your needs and abilities.

You’d be better served to master the fundamentals before using a platform like this. Besides, if you plan to dabble, the minimum commissions and balance requirements will cost you unnecessary fees.

That’s why, for beginner traders, I recommend learning on a platform like Thinkorswim.

Pros

  1. Global Trading. IB allows you to trade over 100 markets in over 24 countries.
  2. Short Locate. One of their best features is their ability to locate shorts
  3. Custom Orders. You can place over 30 different types of buy/sell orders
  4. Paper TradingYou can practice with $1,000,000 in paper “monopoly” money, much more than the typical paper trading demo accounts.
  5. Low Margin Rates. Let me tell you this: nothing will induce fear and losses faster than a margin call. Luckily, with IB’s low margin rates, the chances of this happening are significantly lower.
  6. Low Fees. IB is known for having some of the lowest fees and commissions in the industry with a fixed and tiered fee structure. And, like most brokers, prices differ depending on the markets traded.

Cons

  1. Charts. The charts are clunky, and compared to the rest of the platform, they will let you down. I’ve seen much better out there, like Thinkorswim, for example.
  2. Minimum Opening Deposit. Unfortunately, you will need to cough up at least $10,000 to open an account, which can be steep for those just starting or those with smaller portfolios.
  3. For Advanced Traders. You must be an experienced, active trader to take advantage of your IB account.
  4. Minimum Monthly Fees. Regardless o whether of whether you make a trade, you have to pay a minimum of $10 in commissions every month.
  5. Complex. As a warning, the TWS is Java-based, which might be confusing initially, especially if you’re unfamiliar with Java.

Final Thoughts: Interactive Brokers Review

  • Newbies should know that there are some minimum charges that IB has. In addition, unless you have $100,000 or more and or spend at least $30 in commission fees each month, you will be subject to some maintenance charges. These inactivity charges can go up to $20 per month. We are active traders and investors, so the fees are not a big deal, but worth noting.
  • Great for investing in foreign markets
  • IB has a bit longer wait time to reach a person for support, usually 3-5 minutes on average. The same was also true of using their chat function. This is slightly longer than most brokers. However, their customer service personnel are very helpful.
  • IB does have okay charting, but it is not as good as other platforms we have tested and used. And it still has a VWAP problem where the VWAP indicator is inaccurate. This is something we wish they would fix! Other than that, there are no major complaints with their platform and charting setup.

Frequently Asked Questions

Interactive Brokers is a publicly traded company on the Nasdaq Exchange (NASDAQ: IBKR).

Yes, you can be short on Interactive Brokers. They have one of the best shortlist platforms on the market while being one of the most economical brokers. You can also set up a scanner using their "Advanced Market Scanner" and scan specifically for stocks with short shares available.

Interactive Brokers has had the best "short share" availability we have ever seen. That was a big draw for us when trading stocks. They have some very interesting features when it comes to shorting.

 

We like to sort the list by the least amount of shares available. This way, we can find stocks that are most likely already being shorted and have a limited surplus left to borrow from. 

Interactive Brokers is a solid choice for active traders. Their order execution is fast, fees are reasonable, and they are good for shorting.

Interactive Brokers is a complex broker for beginner traders. Their mosaic layout is cumbersome and the user interface can be complicated to setup.

Interactive Brokers is a safe platform because the Financial Conduct Authority and SEC regulate them.

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