Interactive Brokers Review
Professional forex and CFD traders seeking a global multi-asset broker will find Interactive Brokers offers a sophisticated, institutional grade trading platform, and competitive fees.
Top Takeaways for 2021
Here are our top findings on Interactive Brokers:
- Founded in 1977, Interactive Brokers is listed publicly (NASDAQ: IBKR) and regulated in six tier-1 jurisdictions, making it a safe broker (low-risk) for forex and CFDs trading.
- While too complicated for inexperienced traders, the Interactive Brokers Trader Workstation (TWS) desktop platform offers a variety of advanced trading tools that seasoned traders and professionals will appreciate. Similarly, with mobile, the IBKR Mobile app comes loaded with features but lacks a simplified experience for everyday forex traders. MetaTrader is unavailable as an alternative platform option.
- Interactive Brokers enables customers to trade from a vast selection of global financial markets, from stocks and options to futures and spot forex. In total, traders can access 125 market centers across 31 countries. Note: Retail spot forex trading is not available to US-residents (for US forex trading, read our US forex brokers guide).
|Offering of Investments|
|Commissions & Fees|
|Platforms & Tools|
Is Interactive Brokers Safe?
Interactive Brokers is considered low-risk, with an overall Trust Score of 99 out of 99. Interactive Brokers is publicly traded, does not operate a bank, and is authorised by six tier-1 regulators (high trust), zero tier-2 regulators (average trust), and zero tier-3 regulators (low trust). Interactive Brokers is authorised by the following tier-1 regulators: Investment Industry Regulatory Organization of Canada (IIROC), Securities Futures Commission (SFC), Japanese Financial Services Authority (JFSA), Financial Conduct Authority (FCA), Monetary Authority of Singapore (MAS), and the Commodity Futures Trading Commission (CFTC). Learn more about Trust Score.
|Publicly Traded (Listed)||Yes|
Offering of Investments
Interactive Brokers offers a significant range of global markets; however, availability depends on where you reside and which entity you open your account with. For example, retail spot forex trading is not available to US-residents, and CFDs are not available to clients in the US, Canada, and Hong Kong. For US forex trading, see our US forex brokers guide.
Cryptocurrency: Cryptocurrency trading is available through CFDs, but not available through trading the underlying asset (e.g. buying Bitcoin). Note: Crypto CFDs are not available to retail traders from any broker's UK entity, nor to UK residents.
The following table summarizes the different investment products available to Interactive Brokers clients.
Interactive Brokers offering of investments:
|Tradeable Symbols (Total)||7400|
|Forex Pairs (Total)||105|
|US Stock Trading (Non CFD)||Yes|
|Int'l Stock Trading (Non CFD)||Yes|
|Social Trading / Copy-Trading||No|
Commissions and Fees
Despite its monthly minimum activity fees, Interactive Brokers appears to offer competitive pricing; however, it is difficult to make a precise comparison since Interactive Brokers does not publish its average spreads for forex.
Forex pricing summary: For forex trading, commissions per side start at 0.00002 (i.e., 0.2 basis points) of the U.S. dollar trade value with a minimum of $2 per order ($4 per round turn), but can drop by up to 50% if you are a very active trader.
Forex account example: Buying and then selling $100,00 worth of EUR/USD at Interactive Brokers would result in a pip equivalent of roughly 0.40 pips in commission charged, plus any prevailing spreads. Overall, that is a low commission rate for forex trading (note: IBKR Lite and IBKR Pro accounts do not support forex trading).
Minimum charge per trade: Given the minimum commission charge of $2 per side, trading anything less than 100,000 units of currency and pricing becomes proportionally more expensive for smaller trade sizes. The minimum charge by Interactive Brokers for forex is comparable to the $3 per order fee that Saxo Bank charges if you trade less than 50,000 units of currency.
Commissions and execution method: For forex traders, Interactive Brokers aggregates prices from 16 of the world's largest interbank forex dealers. Instead of marking up spreads, Interactive Brokers charges a commission per trade ranging from $16-$40 per million round turn ($8-$20 per side). This pricing is comparable to brokers that offer commission-based forex trading with agency execution.
Active traders: For active traders, there are applicable discounts that depend on meeting monthly trading volume minimums. For example, if you trade over 1 billion worth of forex, the minimum charge drops to $1.5 per order from $2 and can go as low as $1 per order if you trade over $5 billion per month in volume. Also, Interactive Brokers can handle large order sizes on a Request For Quote (RFQ) basis to minimize market impact and deliver the best possible execution to clients.
Minimum spend: While active traders can be rewarded with commission discounts, beginners may find overcoming fees more challenging due to monthly minimum spend requirements, in addition to the minimum per-trade commission.
Other thoughts: Overall, we would like to see Interactive Brokers publish its average forex spreads, especially since it competes well in other asset classes, e.g., US equities trading (stock trading). To represent itself as a global leader, joining the FX Global Code would also be a plus.
Interactive Brokers pricing summary:
|Average Spread EUR/USD - Standard||0.6 (From 09/25/21 - 10/02/21)|
|All-in Cost EUR/USD - Active||0.6 (From 09/25/21 - 10/02/21)|
|Active Trader or VIP Discounts||Yes|
|Execution: Agency Broker||Yes|
|Execution: Market Maker||No|
Platforms and Tools
Trader Workstation (TWS), Interactive Brokers' flagship desktop trading platform, is anything but easy to use, but is packed full of features covering all spectrums of trading products, including forex.
Forex layout: Within TWS, FXTrader is the main terminal for trading forex, which provides traders access to 92 CFDs on forex or 105 cash forex pairs offered by Interactive Brokers. When adding forex pairs to a watch list, users can choose from both spot forex cash rates and forex CFDs from either the IDEALPRO or SMART venue.
Desktop charting: TWS offers 104 available studies within its charts, which is far above the industry average, yet less than, say, thinkorswim by TD Ameritrade, which offers over 300. No question, the charting experience on TWS is powerful.
Advanced orders: Interactive Brokers supports complex orders on its TWS desktop platform for forex and CFD traders. For example, the Basket order (comparable to TD Ameritrade's Blast order or the Custom Basket order offered by XTB) is available, along with One Cancels All and many other conditional orders. These order types can be great for advanced strategies.
Platform complexity: While the number of customizations available in the TWS desktop platform is impressive, the complexity and long lists of possible configurations can be intimidating to unseasoned investors. For example, the watch list alone can be configured with over 500 different available columns. In comparison, Saxo Bank, CMC Markets, and IG all also offer robust trading platforms, however they are streamlined and far easier to use.
Client Portal (browser trading): Replacing its legacy WebTrader platform, the Interactive Brokers Client Portal comes with forex charts (16 optional indicators), forex news headlines and related economic calendar events, trading, and even syncing watch lists. By stripping out everything built for active traders, Client Portal is far more approachable to casual investors. In my testing, I found it to be enjoyable to use.
MetaTrader and other third-party platforms: Interactive Brokers does not directly offer MetaTrader. To access third-party platforms such as MetaTrader, traders must understand code and utilize APIs. API options include the FIX protocol, REST API, or Python, which all connect third-party platforms programmatically to TWS.
Interactive Brokers trading platform:
|Virtual Trading (Demo)||Yes|
|Desktop Platform (Windows)||Yes|
|Social Trading / Copy-Trading||No|
|MetaTrader 4 (MT4)||No|
|MetaTrader 5 (MT5)||No|
|Charting - Indicators / Studies (Total)||127|
|Charting - Drawing Tools (Total)||7|
|Charting - Trade From Chart||Yes|
|Watchlists - Total Fields||494|
|Order Type - Trailing Stop||Yes|
Out of all brokers reviewed on ForexBrokers.com, Interactive Brokers offers the widest array of third-party research (23 providers), nine of which directly cover forex news and research in their content. The research is not the easiest to navigate (it isn’t centralized), and it isn’t all free, but it’s thorough, and it’s there for traders who know where to look.
Research summary: Interactive Brokers will satisfy the vast majority of traders, you just have to know where to look. Most of the third-party research is available in Trader Workstation (TWS). Meanwhile, on Client Portal, I found forex research from Capitalize and FinGraphs. Lastly, content from in-house and guest authors can be found on the Traders' Insight blog.
Forex news: Interactive Brokers streams market headlines and news from Reuters, Dow Jones, and Market News International (MNI).
Forex research: Interactive Brokers has forex research from among its in-house and third-party resources. For example, Asbury Research covers the US Dollar and interest rates, while the "Today's Top 3 Trades" series published by Tradeable Patterns often includes spot FX markets. Given that the majority of research resources available to customers is specific to other global financial markets, I did find it time-consuming to find content related to forex specifically.
Forex videos: Video content includes Bloomberg Television (US and Asia), daily market updates from IBKR Traders' Insight, and The Fly Squawkbox Live podcast. The Traders' Insight daily video update is produced by IBKR's Chief Strategist, which I found to be a great quality, even though forex is not the main focus.
Interactive Brokers research:
|Daily Market Commentary||Yes|
|Forex News (Top-Tier Sources)||Yes|
|Trading Central (Recognia)||Yes|
|Social Sentiment - Currency Pairs||Yes|
Interactive Brokers offers a variety of quality educational content; unfortunately, the primary focus is not forex and CFDs.
Education overview: Interactive Brokers offers several dedicated resources for education, including its Traders' Academy portal, IBKR Quant blog, and Traders' University. Created by in-house staff and third-party educators, I found the content plentiful, diverse, and of high quality.
For example, the Traders' Academy portal covers broader financial market sectors quite well with lessons and accompanying videos organized by experience level. The downside? There is not a course specific to forex trading.
Educational videos: Given how complex TWS is, I was not surprised to find that most videos were platform tutorials. Outside of its website, Interactive Brokers has a YouTube channel. Platform tutorials aside, I found very few videos about forex and CFDs, despite a larger variety of content related to other asset classes.
Interactive Brokers education:
|Has Education - Forex or CFDs||Yes|
|Client Webinars (Archived)||Yes|
|Videos - Beginner Trading Videos||Yes|
|Videos - Advanced Trading Videos||Yes|
|Investor Dictionary (Glossary)||Yes|
While customizing IBKR Mobile for forex trading takes a little time, Interactive Brokers offers a robust trading experience that competes among the industry's best multi-asset brokers.
Forex-specific features: I found an extensive list of pre-defined watch lists, including two for forex. Also, the economic calendar can be configured to only show economic events relevant to forex traders. When viewing a chart window, related news headlines are shown in an adjacent field. I found this feature helpful for comparing the impact of news on market prices.
IBKR Mobile charts: Charting within the mobile app is rich and includes trading directly from charts. I counted 70 optional indicators and was pleased to find that they automatically sync with TWS desktop. The one minor drawback is a lack of drawing tools.
IBot: The IBot tool (also available in TWS) lets you chat with an artificially intelligent bot (either by typing or using voice), which can recognize commands such as, "show me a chart of the EUR.USD" and then returns a matching chart that can open from the search results. It was apparent to me that a lot of thought was put into developing IBot.
Video: I was pleased to see streaming TV and videos available in the IBKR Mobile app, matching the desktop experience.
Interactive Brokers mobile trading:
|Apple iOS App||Yes|
|Alerts - Basic Fields||Yes|
|Watch List Syncing||Yes|
|Charting - Indicators / Studies||98|
|Charting - Draw Trendlines||No|
|Charting - Trendlines Moveable||No|
|Charting - Multiple Time Frames||Yes|
|Charting - Drawings Autosave||No|
Overall, Interactive Brokers is an excellent choice for professional traders. The combination of TWS with a diverse, global product offering, alongside competitive commissions, makes IB a great competitor. For institutional clients specifically, IB is No 1 in my books. In 2021, Interactive Brokers finished Best in Class for its Offering of Investments, Research, and Professional trading.
Professionals aside, the minimum monthly activity fees and other miscellaneous fees (market data for example) should be taken into consideration when deciding whether Interactive Brokers will be a good fit for your trading style. For low-volume traders alongside beginner forex and CFD traders, I do not recommend Interactive Brokers.
About Interactive Brokers
Founded in 1977, Interactive Brokers is one of the oldest online brokerages in the U.S. and has been listed publicly (NASDAQ: IBKR) since 2007. Interactive Brokers has 876,000 clients and is well-capitalized with $6 billion in excess regulatory capital. It was one of the first brokers to offer a multi-asset solution that now includes equities, options, forex, futures, and bonds across 125 market centers in 31 countries.
While retail forex is not available to US-residents at Interactive Brokers, Eligible Contract Participants (ECPs) with at least $10 million in assets are still eligible. Read more on Wikipedia.
2021 Review Methodology
For our 2021 Forex Broker Review we assessed, rated, and ranked 27 international forex brokers over a three-month time period resulting in over 50,000 words of published research.
Each broker was graded on 108 different variables, including our proprietary Trust Score algorithm. This innovative scoring system ranks the level of trustworthiness for each broker based on factors such as licenses, regulation and corporate structure (read about Trust Score here).
As part of our annual review process, all brokers had the opportunity to provide updates and key milestones and complete an in-depth data profile, which we hand-checked for accuracy.
Ultimately, our rigorous data validation process yields an error rate of less than .1% each year, providing site visitors with quality data they can trust. Learn more about how we test.
Forex Risk Disclaimer
"There is a very high degree of risk involved in trading securities. With respect to margin-based foreign exchange trading, off-exchange derivatives, and cryptocurrencies, 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 related instrument. 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.
About the Author
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. Steven is an active fintech and crypto industry researcher and advises blockchain companies at the board level. Over the past 20 years, Steven has held numerous positions within the international forex markets, from writing to consulting to serving as a registered commodity futures representative.