Interactive Brokers

[cardtrick]

Does anyone have an account with them? I am considering opening one as soon as I can afford to.

Some important things to note about an IB account:

1. Can trade any stock pretty much anywhere in the world with super low commissions
2. Can also trade bonds, futures, currencies, precious metals anywhere in the world.
3. You can hold any of about 20 currencies in you account. The have a conversion system and you can hold your cash as a mix of different currencies.
4. You have to generate $10 in commissions per month or pay the difference to them.
5. They have the lowest commissions out there, unless you have a lot of money and can negotiate cheaper rates with a prime broker.


Min opening balance if $10K but with just that, you'd be paying at least 1.2% in commissions per year. It makes a lot more sense to have at least $50K before you get an account with them.

[msnln]

I've had account with Interactive Brokers at least since 2008 (I can't find records prior ATM) and I am very happy with them. Some advantages are:

- commissions of 1/2 cents per share (this works to $1 per 200 shares of stock) and unless you trade penny stocks, this works out to be a lot cheaper than flat rate brokerage. ie. Scottrade charges $7 flat rate so I would have to purchase 14,000 shares at IB to come to that rate.

- if you trade options, it gets even better. IB typically charges $1 per options trade but I have been charged as low as $0.35 per option. I think they price options based on what exchange options get traded. Other firms charge minimum plus per contract rate, meaning if base commission is $7 they will charge $7 plus $x.xx per option. So, if you buy one option at IB, you get charged $1, but same option will cost much more elsewhere.

- IB allows options limit pricing in penny increments while I have seen other brokerages only allow options trading only in $0.05 increments. So, you can basically get option cost down to where it will cover commissions at IB.

- You get flexibility to trade multiple products with one single account. You will need approval for more exotic products based on your experiences but I have traded options, futures (interest, stock, commodities, indicies, single stock), currencies, and options on futures.

- They allow a lot more flexibility on products that can be traded on IRA accounts. Wife has IRA at Schwab and I have mine at IB. While Schwab has much better research, you pay with their higher commission rates. At Schwab, wife cannot do options spread trades in her IRA even though she has level 4 options clearance for regular account. At IB, I have and regularly trade options spreads which adds additional returns from option decay.

- IB has excellent API for charting and following positions. I do not use charts as much as I used to since I have become more value oriented investors as I have gotten older but when I was trading momentum, IB trading system was my preferred tool.

Disadvantage:

- However, IB charges $7.50 per quarter IRA administration fee ($30 per year). In addition, IB charges $10 per month for real time US data unless you generate $30 in commission per month. If you want other exchanges, you need to pay additional data fees. So, I go around this by getting real time data from wife's Schwab account to trade on IB. I almost always generate more than $30 in commissions/month for IB but I don't want limit placed and feel need to trade more excessively. That comes to about 3.5 trades at Schwab that charges $8.95 per trade.

Bottom line, if you trade more than twice a month, IB may be a better option, regardless of account size.

[cardtrick]

I've had account with Interactive Brokers at least since 2008 (I can't find records prior ATM) and I am very happy with them. Some advantages are:

- commissions of 1/2 cents per share (this works to $1 per 200 shares of stock) and unless you trade penny stocks, this works out to be a lot cheaper than flat rate brokerage. ie. Scottrade charges $7 flat rate so I would have to purchase 14,000 shares at IB to come to that rate.

- if you trade options, it gets even better. IB typically charges $1 per options trade but I have been charged as low as $0.35 per option. I think they price options based on what exchange options get traded. Other firms charge minimum plus per contract rate, meaning if base commission is $7 they will charge $7 plus $x.xx per option. So, if you buy one option at IB, you get charged $1, but same option will cost much more elsewhere.

- IB allows options limit pricing in penny increments while I have seen other brokerages only allow options trading only in $0.05 increments. So, you can basically get option cost down to where it will cover commissions at IB.

- You get flexibility to trade multiple products with one single account. You will need approval for more exotic products based on your experiences but I have traded options, futures (interest, stock, commodities, indicies, single stock), currencies, and options on futures.

- They allow a lot more flexibility on products that can be traded on IRA accounts. Wife has IRA at Schwab and I have mine at IB. While Schwab has much better research, you pay with their higher commission rates. At Schwab, wife cannot do options spread trades in her IRA even though she has level 4 options clearance for regular account. At IB, I have and regularly trade options spreads which adds additional returns from option decay.

- IB has excellent API for charting and following positions. I do not use charts as much as I used to since I have become more value oriented investors as I have gotten older but when I was trading momentum, IB trading system was my preferred tool.

Disadvantage:

- However, IB charges $7.50 per quarter IRA administration fee ($30 per year). In addition, IB charges $10 per month for real time US data unless you generate $30 in commission per month. If you want other exchanges, you need to pay additional data fees. So, I go around this by getting real time data from wife's Schwab account to trade on IB. I almost always generate more than $30 in commissions/month for IB but I don't want limit placed and feel need to trade more excessively. That comes to about 3.5 trades at Schwab that charges $8.95 per trade.

Bottom line, if you trade more than twice a month, IB may be a better option, regardless of account size.

thanks for the great info! It seems you have an IRA with them. Does anyone have a regular brokerage account with IB?

[msnln]

I have both IRA and regular trading account so I need to generate minimum $20 in commissions per month.