Interactive Brokers Review
Professional traders looking for a complete multi-asset broker will find Interactive Brokers offers a comprehensive platform with competitive fees across multiple global financial markets.
Top Takeaways for 2020
After spending five months testing 30 of the best forex brokers for our 4th Annual Review, 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 is full of trading tools and built for professionals. Similarly, with mobile, the IBKR Mobile app comes loaded with features but lacks a simplified experience for everyday forex traders. MetaTrader is unavailable a platform option.
- Overall, Interactive Brokers enables customers to trade a slew of financial products, from stocks and options to futures and spot forex. Note: We did find that product offerings vary by region. For example, retail spot forex trading is not available to US-residents, and CFDs are not available to clients in Canada and Hong Kong.
|Offering of Investments|
|Commissions & Fees|
|Platform & Tools|
Is Interactive Brokers Safe?
Interactive Brokers is considered low-risk, with an overall Trust Score of 94 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
Retail spot forex trading is not available to US-residents, and CFDs are not available to clients in Canada and Hong Kong. The following table summarizes the different investment products available to Interactive Brokers clients.
CFDs & Cash: 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 (considered cash-settled securities), and SMART, a contract structured as a non-deliverable rolling CFD.
|Forex: Spot Trading||Yes|
|Currency Pairs (Total Forex pairs)||105|
|CFDs - Total Offered||7400|
|Social Trading / Copy-Trading||No|
|Cryptocurrency traded as actual||No|
|Cryptocurrency traded as CFD||Yes|
Commissions & Fees
Despite its monthly minimum activity fees, Interactive Brokers appears to offer competitive rates; however, without publishing its average spreads for forex, it is difficult to make a precise comparison.
Commissions: For forex traders, Interactive Brokers 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.
Active traders: For active traders, there are applicable discounts you may be entitled to depending on your monthly trading volumes and the relevant products.
Minimum spend: While active traders can be rewarded with commission discounts, beginners may find overcoming fees more challenging due to monthly minimum spend requirements.
Overall, we would like to see Interactive Brokers publish its average forex spreads in 2020, since it competes well in other asset classes such as equities, where it ranked fifth out of 15 U.S. equity brokers in our sister site’s StockBrokers.com 2020 Broker Review.
|Minimum Initial Deposit||$0|
|Average Spread EUR/USD - Standard||N/A|
|All-in Cost EUR/USD - Active||N/A|
|Active Trader or VIP Discounts||Yes|
Platforms & Tools
Trader Workstation (TWS), Interactive Brokers’ flagship desktop trading platform, is not easy to use but is packed full of features covering all spectrums of trading products, including forex. While TWS takes ample time to learn, fortunately, over a dozen default layouts are provided, including one for forex trading. TWS is available for both macOS and Windows.
Forex layout: Within TWS, FXTrader is the main terminal for trading forex and gives traders access to 85 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 as well as forex CFDs from either the IDEALPRO or SMART venue.
Charting: TWS offers 96 available studies that can be added to a chart, which is far above the industry average of 42, and is only surpassed by several brokers including thinkorswim by TD Ameritrade, which has 397, followed by Dukascopy Bank with 313, and then City Index with 139.
Web platform: For browser trading, Interactive Brokers offers WebTrader, which is easier to use but very light in functionality compared to TWS. Unfortunately, WebTrader doesn’t support opening forex charts, leaving only stocks, indexes, and futures available for charting.
New traders beware: 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 nearly 500 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.
MetaTrader: Interactive Brokers does not offer MetaTrader.
While Interactive Brokers lacks a full-featured forex research offering, out of all brokers reviewed on ForexBrokers.com, the broker offers the widest array of third-party research, including free and premium content, as well as bundled services.
Scope of content: 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.
Forex news: Interactive Brokers streams headlines from Reuters, including forex news. The content provided by Traders’ Insight and MarketPulse, alongside the extensive list of analytical tools and news content, helps Interactive Brokers stand out.
Forex research: Interactive Brokers has limited forex research from among its in-house and third-party resources. The majority of research resources available to customers are unrelated to forex specifically, which can make the experience confusing and not ideal for less-experienced traders.
The Interactive Brokers mobile app, IBKR Mobile, provides a great experience that competes among the best multi-asset brokers in the industry. For forex trading, its primary drawback is that the app is so diverse that it lacks a focused FX experience.
Charts: Charting within the mobile app is rich and includes 70 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.
Trading Tools: The IBot feature, which lets you chat with an artificially intelligent bot (either by typing or using the voice command), understands commands such as “show me a chart of the EUR.USD” and then returns a matching chart that can open from the search results. IBot is also available in TWS.
Economic calendar: IBKR Mobile suffers from the same product challenges as TWS. Since it is not built solely for forex and CFDs trading, it is not ideal for less-experienced traders. For example, the economic calendar does not include forex data.
Video content: I was pleased to see video content available on the mobile app from multiple providers, including Bloomberg, IBKR Traders' Insight, and Real Vision, supporting Interactive Brokers research offering.
To score Customer Service, ForexBrokers.com partnered with customer experience research group Customerwise to conduct phone tests from locations throughout the UK. For our 2020 Review, 330 customer service tests were conducted over six weeks.
- Average Connection Time: 1 - 2 minutes
- Average Net Promoter Score: 6.2 / 10
- Average Professionalism Score: 7.2 / 10
- Overall Score: 6.81 / 10
- Ranking: 17 th (22 brokers)
With nearly every type of forex instrument available across 105 currency pairs, including spot, forwards, futures, and options trading, Interactive Brokers provides a diverse and bespoke offering for currency traders, on top of over 6,100 CFDs across global markets.
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 and newer traders, I do not recommend Interactive Brokers.
Overall, Interactive Brokers is an excellent choice for professional traders. The broker finished Best in Class in that category in 2020, and four others, including Offering of Investments, Platform & Tools, Research, and Mobile Trading. Interactive Brokers also won our award as the number one broker for Institutional Clients. Interactive Brokers 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.
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. It was one of the first to offer a multi-asset solution that now includes equities, options, forex, futures, and bonds across 125 market centers in 31 countries.
Interactive Brokers discontinued its retail forex offering in September 2016 and today only offers retail forex trading to international clients outside of the U.S. and Alberta, Canada. Known as Eligible Contract Participants (ECPs), US institutional traders with at least $10 million in assets are still eligible to trade forex. Read more on Wikipedia about Interactive Brokers.
Interactive Brokers Trading Features
|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)||121|
|Charting - Drawing Tools (Total)||9|
|Charting - Trade From Chart||Yes|
|Watchlists - Total Fields||494|
|Order Type - Trailing Stop||Yes|
Interactive Brokers Research Features
|Daily Market Commentary||Yes|
|Forex News (Top-Tier Sources)||Yes|
|Trading Central (Recognia)||Yes|
|Social Sentiment - Currency Pairs||No|
Interactive Brokers Mobile App Features
|Apple iOS App||Yes|
|Trading - Forex||Yes|
|Trading - CFDs||Yes|
|Alerts - Basic Fields||Yes|
|Watch List Syncing||Yes|
|Charting - Indicators / Studies||70|
|Charting - Draw Trend Lines||No|
|Charting - Trend Lines Moveable||No|
|Charting - Multiple Time Frames||Yes|
|Charting - Drawings Autosave||Yes|
2020 Review Methodology
For our 2020 Forex Broker Review we assessed, rated, and ranked 30 international forex brokers over a five month time period. Each broker was graded on 105 different variables and, in total, over 50,000 words of research were produced.
While encouraged, broker participation was optional. Each broker had the opportunity to complete an in-depth data profile and provide executive time (live in person or over the web) for an annual update meeting.
All data submitted by brokers is hand-checked for accuracy. Ultimately, our rigorous data validation process yields an error rate of less than 1% each year, providing site visitors 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.