Founded in 1977, Interactive Brokers is one of the oldest online brokerages in the U.S. and has been listed publicly since 2007 (Nasdaq:IBKR). It was one of the first to offer a multi-asset solution that now includes options, futures, forex, and bonds across 100 market centers in 24 countries.
Regulated in numerous major financial centers globally, Interactive Brokers is known for its competitive commission rates, and today offers retail forex outside of the U.S. and Alberta, Canada, offering 85 currency pairs, over 4200 CFDs, and thousands of exchange-traded securities.
Interactive Brokers offers a web-based and desktop version of its IB Trader Workstation (TWS) trading platform, which is covered by U.S. patents and includes a plethora of different order types, including algorithms for automated trading.
Commissions & Fees
For forex traders, IB aggregates prices from 14 of the world’s largest dealers and instead of marking up spreads, it charges a commission per trade ranging from $16-$40 per million round turn ($8-$20 per side), comparable to brokers that offer commission-based FX trading on an agency basis. While we were unable to obtain average spreads for the EUR/USD pair, a sample observation showed 0.5 pip wide spread at Interactive Brokers, which equates to an all-in cost of about 0.90 pips (0.5 spread + 0.4 commission) using the default commission tier.
|View All Fees||Interactive Brokers||TD Ameritrade||IG||CMC Markets||City Index|
|All-in Cost EUR/USD - Active||N/A||N/A||0.363||0.772||0.690|
|All-in Cost GBP/USD - Active||N/A||N/A||1.092||1.115||1.220|
|Average Spread EUR/USD - Standard||N/A||N/A||0.750||0.772||0.690|
|Average Spread GBP/USD - Standard||N/A||N/A||1.280||1.115||1.220|
|Commissions & Fees|
For active traders, there are applicable discounts you may be entitled to depending on your monthly trading volumes and the relevant products, and while active traders can be rewarded with commission discounts, beginners may find overcoming fees more challenging due to monthly minimum spend requirements.
Interactive Brokers’ margin rates for forex is not as competitive as margin on its securities offerings, as the highest leverage available is capped at 40:1 leverage or barely 2.5% margin using the EUR/USD pair as an example.
Despite all these various fees and trading costs, Interactive Brokers appears to score well in this category, but without publishing its average spreads, it is difficult to make a precise comparison. Overall, we would like to see IB publish its average forex spreads in 2017, since it competes well in other asset classes such as equities, where it ranked first out of 16 U.S. equity brokers in our sister site’s StockBrokers.com 2017 Broker Review.
Starting with phone support, reaching Interactive Brokers customer support via phone took much longer than I would expect for a world-class broker. On two separate occasions, I was on hold for at least ten minutes, ultimately hanging up and trying again later. Fortunately, after speaking with customer support while calling from Asia and Europe, the service I received was satisfactory.
Reaching live chat was much easier. While live chat is not available from within the web platform, it is available within the desktop platform and online account management portal. I found support reps knowledgeable and professional each time.
Without question, if Interactive Brokers enhances the speed with which it answers inbound phone calls from clients, it would present a much more positive experience when it comes to phone support and overall customer service.
On the research front, Interactive Brokers provides a broad range of choices. Available resources include a long list of analytical tools covering nearly every spectrum, including technical and fundamental analysis, news, and portfolios.
From within the IB TWS desktop platform and IB WebTrader, there are several research channels with content from Market Pulse, and FX Commentary provided from the Traders Insight section, with weekly videos that recap market conditions for the prior week. While these are useful, it would be nice to see them displayed within the platform instead of redirecting the user to an external browser.
Overall, the content provided by Traders’ Insight and MarketPulse, along with the heatmap shown in the web platform, and the list of analytical tools, help Interactive Brokers rank highly in the research category compared to other multi-asset brokers with exchange-traded offerings, including FX.
Platforms & Tools
The Trader Workstation (TWS), Interactive Brokers’ flagship desktop trading platform, is available for both MacOS and Windows. For browser trading, Interactive Brokers offers an HTML 5-based IB WebTrader.
Like most multi-device platforms, you cannot login to both mobile and desktop or web at the same time, as logging into one will log you out of the other. However, a reconnect button that remains in place makes it easy to log back in when switching between devices.
Overall, the TWS desktop version of the platform is the clear choice at Interactive Brokers, and for those who are willing to dedicate time to learn to use the platform, it can become a powerful tool in your multi-asset trading arsenal.
Within the Trader Workstation (TWS) desktop platform, FXTrader is the main terminal for trading forex and gives traders access to 85 forex pairs offered by Interactive Brokers.
One interesting feature with order pre-populating is that you can repeat this process and have several orders that have not yet been transmitted but are pre-filled and ready for submission. This is comparable to the “blast order” feature from thinkorswim by TD Ameritrade, where a bunch of orders can be sent simultaneously.
Besides exchange-traded forex futures and forex options, Interactive Brokers offers two types of spot forex contracts: IDEALPRO, which uses a notional cash amount to account for trade reconciliations, and considered a cash-settled security, and SMART, a contract structured as a non-deliverable rolling CFD.
Traditional retail forex traders will find it easier to use the SMART CFD contract, while futures traders are used to conversion calculations involved with physical delivery may opt for the IDEALPRO contract.
In cases where a trade size is less than a certain minimum, or 20,000 units for example on the IDEALPRO GBP.USD forex contract, the order can still be overridden and submitted as an odd lot amount, but the execution rate can’t be guaranteed to match the rate displayed on the platform. This is a neat feature that helps uphold transparency with regard to price execution.
Using another highly advanced module within the platform, Risk Navigator, traders can gauge risk on their positions based on the future market prices plotted across a chart with corresponding profit & loss levels.
Overall, using Risk Navigator for a high-level overview of your position or exposure across an entire portfolio can be useful, but the more advanced analysis that is available will probably be ignored unless you need the type of quantitative performance rankings a professional trader might use, such as analyzing the value of Greeks on options positions.
Shifting to charting within the TWS desktop platform, there are 91 available studies that can be added to a chart, which is far above the industry average compared to other brokers reviewed, and only surpassed by thinkorswim by TD Ameritrade, which has 308, followed by Dukascopy Bank with 277, and then City Index with 137.
The drawing tools were not as extensive, with only 10 to choose from, and while the number of customizations that can be made in the TWS platform is impressive, the complexity and long lists of possible configurations can be intimidating to unseasoned investors.
To put into perspective how complex some of the configuration options are, the watchlist alone can be configured with nearly 300 different available columns, although many of these are related to equities analysis such as earnings per share (EPS) or price/earnings (PE) ratios, and not forex. Meanwhile, when adding forex pairs to a watchlist, users can choose from both spot forex cash rates as well as forex CFDs from either the IDEALPRO or SMART venue. Impressive indeed.
Some of the innovative features on the platform are also somewhat hidden, such as the IBot (Beta version) that lets you chat with an artificially intelligent bot that understands commands such as “one week hourly chart EUR.USD” and then returns a matching chart that can be popped out of the chat dialogue. While I don’t think I would use this feature if I had to go looking for it each time, if it were incorporated into the main search bar in future iterations, that would make it easily accessible and therefore more useful.
Trader WorkStation aside, IB WebTrader is Interactive Broker’s web-based platform, and it’s clear this platform is not meant to be a replacement for its desktop counterpart as there are nowhere near as many features, and despite the simple layout, the user experience during our tests was not seamless.
Unless you cannot access the desktop or mobile version and need quick access to perform rudimentary actions, I do not recommend the WebTrader platform.
Overall, the TWS desktop version of the platform is the clear choice at Interactive Brokers, and for those who are willing to dedicate time to learn to use the platform, it can become a powerful tool in your multi-asset trading arsenal. The advanced features of the desktop version are positive attributes compared to other platforms from multi-asset brokers that lack depth of options, such as Plus500 or XTB.
Interactive Brokers offers several mobile applications, including its TWS mobile trading app for Android smartphones and tablets as well as all iOS devices, including iPhone, iPad, and the Apple Watch. My testing was conducted using the Android smartphone app.
Charting within the mobile app had nearly one-third less indicators than the desktop platform, but it still packed in 68 indicators, which is far more than most brokers offer in their mobile apps or even on their desktop and web platforms.
Charting within the mobile app had nearly one-third less indicators than the desktop platform, but it still packed in 68 indicators, which is far more than most brokers offer in their mobile apps or even on their desktop and web platforms. Surprisingly, one drawback was the lack of drawing tools, including the ability to plot a trend line.
In addition, while there is a full screen mode for the charts, they do not rotate into horizontal mode, and I wasn’t able to zoom in or out by pinching the screen, adding to the limitation of the lack of drawing tools. Overall, there is a good charting foundation in the app and also room to improve key areas to improve the experience.
Overall, Interactive Brokers’ TWS mobile app is highly functional, easy to explore, and offers a good range of sophisticated tools, ranging from the trading assistant to customized scanners, while other parts of the app, such as the complex order dialogue and creating a watchlist, are not as easy to figure out. The bottom line is that the Interactive Brokers TWS mobile app packs in innovative features, helping it rank well among multi-asset brokers that offer forex, CFDs, and exchange-traded securities internationally.
Besides the algorithmic-driven orders, Interactive Brokers offers multiple options for algorithmic traders or those who wish to connect programmatically via API using various protocols across its trading platforms, including the FIX CTCI platform for traders who need to build their own trading systems.
While Interactive Brokers still offers forex to institutional clients in the U.S., it discontinued its retail forex offering in September 2016 and therefore only offers retail forex trading to international clients outside of the U.S. and Alberta, Canada.
Interactive Brokers’ minimum monthly activity fees and related charges should be taken into consideration when deciding whether the broker will be a good fit for your trading style. For low-volume traders and beginners, I do not recommend Interactive Brokers.
Even though experienced traders will require time to learn the TWS platform, Interactive Brokers is a great choice for professional and active traders. The broker’s competitive commissions structure and wide range of available markets, alongside the extensive configuration options and order types found within the TWS suite of platforms, is a winning combination.
For our 2017 Forex Broker Review we assessed, rated, and ranked 20 international forex brokers. Each FX broker was graded on 255 variables. Learn more.
Forex Risk Disclaimer
There is a very high degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable exposure to risk, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable, or that they will not result in losses. Learn more.View all Interactive Brokers Fees & Features
Reviewed by Steven Hatzakis Steven Hatzakis is the Global Director of Research for ForexBrokers.com. Steven previously served as an Editor for Finance Magnates, where he authored over 1,000 published articles about the online finance industry. Over the past 18 years, Steven has held numerous positions within the international forex markets, from writing to consulting to serving as a registered commodity futures representative.
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