I'm going to give IB thumbs up. Fast execution, huge range of markets, little slippage and easy to set up. Withdrawals & deposits are done with ease.
The best benefit in my opinion is the universal account. Let's say you day trade US futures and you have a $100k account. You probably don't use all of that $100k + associated margin when trading. This allows you to park all or part of the $100k in stocks/ETFs yet still day trade the margin on the $100k in the daytime. Effectively you can get a return on your money twice. This is something you can't get as a futures trader with a futures-only broker or a broker that segregates accounts by market (e.g. Tradestation).
In terms of platform - TWS is not the simplest by far BUT you can plug it into other platforms such as Ninja, which I do for day to day use. If you primarily trade one type of market (e.g. futures) but make the occasional trade in another type of market, then TWS is perfect for the occasional trade outside of your main market. This means you can focus your platform fees on the area in which you specialize.
Where IBs platform does excel over most is in the account reports. Some of the small futures brokers have dire account reports. IBs reports are comprehensive.
Data is effectively free; including depth but you can't get a proper Time & Sales from IB as it is sampled. Tape readers will need to look elsewhere for their data. TWS also has some scanners which you can use to look for opportunities during market hours but they are pretty basic and I haven't had much use for them.
I haven't had cause to use IBs telephone support but I have found their on-line support very helpful and always available.
The fees of IB are on par with most other brokers for the services I use. Certainly it's considerably cheaper than Tradestation. It is a little more expensive than a deep discount futures broker.
For Shorting stocks, IB has a good inventory of stocks to short. With Tradestation, I was forever getting "unavailable" messages when attempting to short which is a real pain if you have been focused on a stock with intent to open a short position. I have not yet seen this with IB.
My only real complaint with IB is that trading across other currency markets is somewhat 'fiddly'. If you have a US dollar denominated account and you earn profits in Euros, the process of converting the Euro's back to dollars is cumbersome.
Excellent platform, highly customisable, fast executions (1 second), slippage negligable, in fact I often get a better price than the one on the screen. Feeds can be linked to Sierra or Quote-tracker charts.
I've only used the US customer service number once and got a recorded message "you are in a queue at least 10 minutes long". I decided not to bother! In fairness there was an "press * button now for an automatic $30 deduction from your account if you wish to close a position" option which might have been quicker. I used the Swiss number (unavailable during the evening) once when setting up the account and that was OK.
Website help very good.
Setting up the account was a very long process including passing 2 on-line exams! Allow maybe 4+ hours for a 'universal account' with permissions for futures and everything. But maybe all US brokers would take as long, no experience.
Comms of £1.70 a side or less for future trades are highly competitive.
I have been with IB for a few years now and have found them to be near perfect in most areas of their business. Their real time data is fast and accurate, their UIs - TWS and Book Trader - are robust and easy to use, and their people have always be willing and able to answer my questions and help me resolve problems here and there. Not to mention their super low commission rates and the high interest they pay for cash, that I love. Lately I've also had the chance to appreciate their willingness to listen to new ideas and meet the evolving needs of their customers through new features. Truly the leader of the pack, imo, bravo!
Executions, commissions and forex spreads unbeatable
I think IB have probably the best retail forex operation because I haven't seen better spreads, but I think they probably rely on this reputation and don't bother to give decent customer service or useable access to historical data. I have to use a 3rd party datafeed to get historical data for NinjaTrader.
I would agree with all the points in DTs review below (damn you beat me to it!) I'll therefore try to add some information that you may find useful if you're considering giving IB a try.
The Universal A/c is particularly useful if you want to trade instruments denominated in different currencies. You simply select a base currency on joining (which you can change at any stage if your an ace FX trader!) then trade any instrument you wish. When you first try to trade a new instrument you must enable the data feed for it through 'Account Management'. This is a simple enough process although some may incur a small monthly fee. Be aware that any profits/losses are accrued in the currency of your traded instrument and if there are losses IB will charge you interest when these are not in your base currency. As DT said the process for paying losses off is a bit 'fiddly', it has to be done through IBs own 'ideal' platform, however I have found Customer Services very helpful here as they will talk you through the procedure whilst you do it online. It is v difficult to actually clear your debt exactly as the price is moving around, but IB will normally waive a few pence/cents if you cant get it spot on.
Esignal users should not miss out on the CME Fee Waiver tie up with IB. Full details on the eSignal/Interactive Data website, but basically if you have a live IB account then sign up, log in in the required manner once a month and your CME Globex fees are waived. This includes CBOT/Nymex/Comex, but for any contract which is both electronic and pit traded, such as Gold GC and Oil CL you must use =1 after the symbol to receive the data.
IB has a reputation for poor CS yet I have always found it pretty good. It is useful to remember when talking to them that you may be conversing with someone in a different timezone to your own, which can lead to much confusion if you're refering to the timing of a trade!! I have also used 'Tech Support' both telephone and online, where they have always been knowledgable and helpful. If you are UK based and want to talk to the London office then you'll find the telephone number on the Interactive Brokers thread here on Trade2Win, they often answer questions here too.
IB s website may not be the best, but if you're prepared to put in a bit of time the tabs near the top of the home page contain huge amounts of information and will answer most questions.
IB has recently reduced some of it's commissions. ES/YM/NQ are now $4 a round turn, pretty competitive imo. Margin requirements are somewhat higher than many of the other US discount brokers. This may put some people off, whilst others may argue that it is a good thing!!
TWS (Trader Work Station) is not the most intuitive piece of software but just like the website if you take the trouble to learn it's features you may be pleasantly surprised. A good starting point is the TWS Guide, if you type this into the search bar on the IB home page then a comprehensive document is available to help you get started. In addition to this IB runs a number of Webinars every month to help in specific aspects of TWS. These can be found from the Education Tab,-Webinars. You dont need to wait for the next one as there are recordings of old ones available which you can play and repeat at your leisure.
TWS has a number of sub applications which are worth investigation. Spot Forex traders may like the look of 'FXTrader', if you prefer trading direct from a chart then there is 'ChartTrader'. If you prefer an order entry ladder type system then 'BookTrader' is available, but currently one click ordering is suspended due to a patent dispute with TT.
Through IBs API then other front ends such as Ninja/Zeroline can be used but my experience suggests TWS may have what you need, you just need to delve!!
TWS has some basic scanners, but also the ability to write your own parameters. I haven't tried but Stock traders may find this particularly useful.
Any of these facilities can be tested in a paper trading account, but remember you must ask for a 'paper' account otherwise they will only open a live account for you.
In summary I would say serious traders should give them a try, but minimum $10000 to open an account.
I would have given them a 9/10 but the loss of 'BookTrader's one click ordering is a particular disappointment to me so we'll call it 8!
Best all-round futures broker for small UK professional trader
Overall 8/10 (9/10 if they get rid of 'cancellation charges')
Wide selection of products available to trade on global markets
Competitive commissions eg. $4.02 per RT for S&P Emini. You can get slightly little lower (I've seen $3.30 per RT) with some US based discount brokers , but IB still blows away the abysmal $7 per RT offered by MF Global / GNI Touch, or other rip-off brokers. Shop around!!
TWS (Trader Workstation) trading platform is free, and very reliable, not buggy - it has many features if you dig deep, and you can also use a different front end if TWS is not to your taste. It suits me fine.
Free-ish data feed...provided you do a minimum level of activity...though not a 'pure' data feed as IB filters data in 250 ms packets, this is still good enough for the naked eye given the time it takes for a human being to react! During busier periods when activity is high (non farm payroll release) this probably makes the IB data feed more reliable than a pure data feed. You can pay for a different (pure tick by tick) data feed if you prefer, such as eSignal, etc. I don't feel the need, though for backtesting, automated trading you'd want this.
Many front end platforms compatible with IB. Large community base.
Universal account - others have reviewed this feature...
Website has a lot of documentation to explain details, and there are
also regular webinars to explain software, product releases, etc.
Big, profitable company, listed on exchanges, so I feel safer keeping my money with IB than other brokers.
High cancellation charges in certain products (eg Eurex futures such as Bund, Bobl), whenever you amend/modify an order - this can double/triple your effective commission charges if you keep changing the price you are working! IB, please get rid of your stupid cancellation charges!!
Modest charting functionality - if you open too many charts it might slow or crash your PC. It's useable - I coped for two years - but I now pay monthly for dedicated charting offered by Sierra Chart and it complements IB TWS nicely.
Account statement is very detailed, but somewhat confusing (for me anyway!). Took me ages to work everything out in a spreadsheet.
TWS platform probably not too 'user friendly' for the inexperienced trader
Customer services had a bad reputation in the past, though I've personally had no problems, they have been helpful and polite. But IB is not into hand holding, so if you are a novice, probably better to look elsewhere and pay higher commissions for the better customer service.
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Account opening procedure a bit longwinded as you have to answer a load of questions to ensure you understand that IB aren't liable for anything that could possibly go wrong with your cash! But it can all be done inside a day, and the transfer of funds takes another couple after that.
Good Points :
- Trading software is very flexible, even if a little unfriendly. If you're technically minded, you can write your own front-end and make it look much nicer.
- Commissions are very low indeed.
- Excellent execution times, leading to virtually no slippage.
- Everybody uses them, so you can usually get an answer to any questions, even though their own support people wont be able to help
- Excellent product range, all the major exchanges and instruments are covered.
- Can plug their price feed into Sierra for instant cheap charts.
Not So Good :
- Laughable "support". Forget the helpline and head to their bulletin board!
- It costs to close a position over the phone if things go wrong technically (but you can place auto-stops with orders so that may not be an issue)
After the below incident I spoke with the MD and he has given me the confidence that IB is committed to providing the best customer service.
I have been a client of IB for several years now. Their customer service is well known for being poor and if there is a problem their motto seems to be "the customer is always wrong".
Yesterday I was called a liar on these boards by one of their reps after I reported a conversation I had just had with one of their trade enquiry guys.
IB has received thousands of dollars from me in commissions and the least I would expect was some modicum of respect. The rep in question has done his company a great disservice and leaves my confidence and trust in them severely diminished.
This said the fills for stocks and futures has always been very good and with the correct front end the TWS can be used as a lethal weapon.
In my opinion, they currently are unmatched. Have tried Etrade, TDameritrade, Scottrade.
Out of all the above, IB is number 1. There are a few new players out there that could do some serious damage on the market, but can't make any conclusions yet.
I opened an IB account as a backup to my TradeStation account.
I only stayed with them for a month, I found the trading interface unreliable - when the platform let me down and I needed to get through to them on the phone hold times of over an hour were common.
The platform seemed most unreliable during fast markets or major news announcements... whenever the market was doing something interesting IB went down.
Fee's are cheap, and platform access is only $10 a month which is discounted if you do more than that in commissions. Cheap and cheerful, but you get what you pay for in my opinion, and when its my money on the line I want to use a more reliable tool for my trading than IB.
My experience is based on very short term trading, for which the level of reliability was unacceptable. Obviously if you trade longer term then these factors may not be such a big deal for you.
I've been trading through IB for nearly a year and am quite satisfied with the TWS platform and IB's low fees. The areas where IB is deficient are:
(1) Customer Service. Waiting times can be extremely long;
(2) Statements generation. Statements are very basic.
(3) Confirms. System does not provide real-time e-mail confirms
(4) Audit trail. The system provides an audit trail only if you are logged into TWS. Thus, if one id not logged on, the only way to obtain an audit trail on an execution (e.g., to find out what condition triggered the execution) is to contact customer service. Then you are back at problem area #1.
I have been with IB since 1992. Most of the time I am not happy about this company. Then why do I still stay with IB? Because I use 4 brokers, IB is one of them. I use IB for scalping because of the low commission.
1. Fast execution.
2. Low commission.
3. Customizable hot keys/mouse.
4. Security device or pass code protection.
1. Lousy, unfriendly, arrogant CS staffs.
2. Over packed, confusing software TWS.
3. Very poor, related TWS documentation.
4. Cannot find help anywhere either from TWS software or web help.
5. TWS takes too long to start.
6. No one in IB cares about customers.
Critical features like OneCancelAll, not available for option spreads / combos. eg could be in a spread at 1.00 debit, and want to sell at 2.00 and simultaneously set a stop at 1.50, so whichever executes first, it cancels the other. Critical for anyone who cant be at his computer screen 24/7.
OCA feature, available for single legs only. Anyone with even a little experience in trading options, would trade spreads / combos, rather than single legs. Suggesting only inexperienced option traders use IB.
IB only allow one option chain to be opened at a time rather than multiple.
RAM hogging software, even with nothing extra open and can take ~+10mins to open after log in details entered.
Commissions should always be leg, esp considering there are expensive cancellation fees ~>$1 per leg for single leg trades, lack of available features and facilities to trader.
This is not criticsim for the sake of criticism, but we want IB to be one of the top brokers for option traders. Currently, its average at best.
I am new customer of IB from Australia... Was attracted by low fees ( it cheaper for me to trade ASX stock and option with IB in US than using an Australian broker)
However he experiences so far has been not that good
- 1) Staff not very helpful mainly US support staff ( Asian time zone staf is good but not knowledgable on soem US products)
They give stock standard answers rather than understanding the question
Had real difficulty gainging information on things like Singale Stock Futures most of staff had no idea
- 2) High data cost
The biggets problem for me as an Australian resdeint client is IB only allows CASH account no margin account
I feel like I have been treated like a person from an enemy teritory!
The reason they give is Australian regulations.. which is BS. it is hard to believe that a big broker like IB can't get Australina licence? other brokers like Options express alows Australian to trade everything
This restiricts me in 3 ways
B) Can't do naked option writing
C) Can't trade Single Stock Futures
NOT HAPPY AT ALL thinking of pulling out