Interactive Brokers Review

On Aug 30, 2015

Interactive Brokers is a U.S.-based investment brokerage that gives members access to an online trading platform. The company has several decades of trading experience, but only got into the online market during the early 2000s.
Interactive Brokers review
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  • Interactive Brokers review
  • Website: interactivebrokers.com
  • Age: Established in 1977
  • Extra: Mobile Version Available
  • Easy to Use
     
  • Price
     
  • Reliability
     
  • Customer Service
     
 

  • Review Summary:

  • Interactive Brokers is a U.S.-based investment brokerage that gives members access to an online trading platform. The company has several decades of trading experience, but only got into the online market during the early 2000s.

     

 

Top Features of Interactive Brokers

Interactive Brokers gives you a platform that can act as a professional investment tool. Beginning traders can use it, but they should learn some important information before investing much money. If you do not truly understand how to use the platform, then you could put yourself at risk of losing money just for making simple mistakes.

Products

One of the things I like about the Interactive Brokers platform is that it lets me investment in so many different products. Some of the products I have looked into include:

  • Bonds
  • Stocks
  • Forex
  • Features
  • Mutual funds
  • Options
  • Over-the-counter securities
  • Exchange-traded funds
  • Pink sheet






That's a lot of diversity that you won't get from many companies.

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Education

I had some investment experience when I started using Interactive Brokers, but I also knew that I had a long way to go before I could call myself an expert. The website's education center helped me learn a lot of information quickly. I'm not saying that I'm an expert now, but I certainly know a lot more than I did when I started!

The Interactive Brokers Traders University lets you participate in:

  • Webinars
  • International exchanges
  • Courses
  • Interactive Brokers short videos

It also gives you access to several apps, tools, and widgets that should help you make informed decisions quickly. If you are a real beginner, then you will probably want to start with the Traders' Glossary. It has the basic information that you need to understand what the guides and lessons are trying to teach you.

Interactivebrokers.com - Online binary trading platform

There are also a few other educational resources that can help you make smart investment decisions. The Probability Lab is a cool way to learn about the very nature of stock prices and calculating probability distribution. 

I really like the Bulletin Board. You can find so much useful information there that it is worth looking at whenever you have a few spare minutes during the day. It's amazing how much you can learn just by reading the things people post on the bulletin. The posts not only help you understand key aspects of investing better,  but give you a look into the minds of other investors. Some of them have great ideas that I have emulated. Granted, there are some hair brained ideas in there, too. Once you spend enough time poking around, though, you can easily tell the difference.

Platform

I'm not a very tech-oriented person, so I wanted to find a broker with a simple interface that even I could use without having to learn  a lot of unnecessary skills. Hey, I'm here to make money, not learn how to be a code monkey.

Interactivebrokers.com - Online binary trading platformI like the Interactive Brokers because it has a user friendly interface that makes it really easy for me to execute the trades I want. I'm not constantly scratching my head, trying to figure out what some weird symbol means. It is intuitive and smart. The team that designed this must have known that a wide range of people would use the platform. I applaud them for getting outside of their own heads well enough to see the interface and actions from the perspective of a newbie.

Even if you are a pro with a lot of trading experience, I think you will like this platform. It's simple and straight forward, but it isn't dumb by any means. Unless you are just really used to another trading platform, I think you could pick this up within minutes.

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Interactive Brokers Prices

The prices at Interactive Brokers will vary depending on how often you trade and what services you want to use. The company estimates that the monthly costs for occasional traders is $20. Frequent traders can expect to spent about $839 per month.  According to their research, these are some of the lowest prices in the industry.

Interactivebrokers.com - Online binary trading platform

When opening your account, you can choose between a fixed rate plan and tiered plan. The fixed rate plan, as the name suggests, charges you a fixed rate per contract or share. If you open a tiered plan, your rates will vary depending on how often you trade.

Criticisms of Interactive Brokers

Interactivebrokers.com - Online binary trading platform I think that Interactive Brokers is one of the best online trading services that I've ever used. With that said, there are some noteworthy criticisms that you should know about before you sign up. I haven't had any negative experiences, but I can see the potential there. So far, so good for me. Still, you should have all the information you need to make a good decision for you.

First, I'm going to address what I feel is the most problematic thing about Interactive Brokers: the company has gotten in trouble with regulators.

The original complaint dates back to people using the service from 2008 to 2011, when it seems the company did not compute customer funds at the end of each day. Interactive Brokers also used several different currencies to maximize earning, which isn't really that big of a deal except that the members did not ask for this. The company's legal trouble got even worse when the Commodity Futures Trading Commission accused it of not having enough money to cover all of their members. 

That last bit would only become a problem if everyone decided to empty their accounts at once, which seems pretty unlikely. Still, that's the kind of thing that the CFTC takes seriously. And it's a good thing that it does. While it's unlikely that there would be a "run" on Interactive Brokers accounts, bad public relations could have prompted a lot of people to pull their money out. If that had happened, and Interactive Brokers didn't have enough money to pay them, that would be bad.

Interactivebrokers.com - Online binary trading platform

Interactive Brokers had to pay some heavy fines for these mistakes. In 2012 it paid a $700,000 fine. In 2013 it had to pay a $225,000 fine.

This brings up the issue of trust. Do you think Interactive Brokers learned its lesson and now follows the rules carefully to avoid future penalties? I'm putting my money on "yes." I just hope I'm not wrong!

Interactive Brokers also has a fairly high learning curve for new members. That criticism is fair depending on what you want to do. If you are just trying to make simple trades, then the platform is about as easy as it gets. I never had any problems, at least. If you want to get into some advanced trading, though, it does get a little complicated. Thankfully, there are plenty of user guides that should help you figure it all out as quickly as possible.

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Interactive Brokers Customer Support

You can contact Interactive Brokers' customer support via live chat, which is what I prefer. I have only had to contact them a couple times about small issues. Nothing major. Personally, I thought that the service was fine. It wasn't stellar, but it got the job done.

There is a lot of talk online, though, about how Interactive Brokers doesn't respond to requests fast enough. I'm not sure how much I believe this. Like I said, my experiences are positive. It's possible that I just got lucky and talking to someone who really cared about doing their job right. Then again, it's also possible that a lot of people using Interactive Brokers are whiney. I mean, there are a lot of people who blame investment companies when they, the individuals, make dumb investment decisions. I can see people getting upset and spreading half-truths because of that.

Interactivebrokers.com - Online binary trading platform

Pros of Interactive Brokers

Cons of Interactive Brokers

  • User friendly interface
     
  • Great education materials
     
  • Plenty of investment products
  • Steep learning curve for beginners
     
  • Questionable customer service (according to some people)
     
  • History of getting fined for breaking rules

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Conclusion

What it really comes down to is whether I have had a good experience making money with Interactive Brokers. I can say that I have. I have had some frustrating moments, but those are overshadowed by the enjoyment I get from learning (not to mention raking in money from some good investment decisions!). I think this is a reliable company with a good trading platform and excellent educational materials. Interactive Brokers has its faults, but what company doesn't. It doesn't seem like any company manages to get everything right. And even if they did, someone would still find something to complain about. There is some concern about Interactive Brokers' past breaches and fines. I thought about that before I signed up. I recommend that you think about it, too. I decided that it was a mistake that the company had corrected and wouldn't do again. I felt very comfortable moving ahead with my investments. But I can't answer that part for you. After all, it's your money. You should choose an investment option that you feel comfortable with. I think Interactive Brokers is a good way to manage investments and I plan to keep using it.
 
Interactive Brokers
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