Interactive Brokers

Interactive Brokers is one of the most popular brokers for sophisticated, highly-active traders. IB’s trading platform spans the globe, connecting to over 80 exchanges in 27 countries. IB is also one of the biggest options market makers in the world.

IB is popular with traders for good reason. You can trade pretty much every security you can think of – stocks, options, futures, forex, bonds – on all exchanges across the world, all in the same account.

And you can do so cheaply. Stock commission are just a half-penny per share with a $1 minimum, meaning you can trade 100 shares for just a buck, or 1,000 shares for $5. Options commissions are an even better deal with Interactive Brokers – they go for a rock-bottom 70 cents a share with a $1 minimum, by far the best deal I’ve ever seen.

What’s more is that the prices get cheaper as you do more volume. If you somehow manage to trade more than 100,000 options contracts per month, you’ll pay just 15 cents a contract. That’s just crazy.

Now is there anything bad about Interactive Brokers? The most common complaint about IB is customer service. They just aren’t as responsive on the phone as say, Thinkorswim. IB is more oriented towards active traders who need to move mega-volume at rock-bottom prices. For this reason, IB is also quite popular with quants and who use algorithmic trading software to execute trades based upon mathematical formulas.

So if you’re a person who needs handholding, IB may not be the right broker for you. Remember, price is NOT everything when it comes to choosing an online broker. In fact, if you’re an average investor like me, you’re much better off paying a higher price for the comfort of knowing you’ll always be able to pick up the phone and get an answer to your questions right away.

However, if you are a high-octane trader making dozens or even hundreds of trades a day, you basically have no choice but to consider Interactive Brokers. At that activity level, the commission rates you pay will play an important role in your P&L.