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A review of one of the largest brokers around.
Interactive Brokers is one of the fastest growing brokers worldwide. This is due to its powerful trading platform and extremely low trading costs. It has just recently gone public, with shares having to be repriced during the pre-public stock auction due to the unexpected demand. However, the low costs and powerful functionality comes at the cost of poor documentation and customer support. Great for professionals; horrible if you're confused about any investment concepts.
Trading Platform Functionality - 10/10
IB's trading platform is its best quality. It has a downloadable platform with all the bells and whistles. You can specify different types of option strategies to use, times to use them at, calculate all sorts of beta, gamma, etc. If you need it, they probably have it. Additionally, the software gets upgraded multiple times per week, staying at the front of the industry. You can even use their custom API to write your own trading platform if you are so inclined.
Ease Of Use - 3/10
Unfortunately, with all of this functionality comes the challenge of finding the thing you need. Of course, the software does have options to hide the unused features, but finding them is no small task.
The display screen for your information is also very confusing. Compared to other "simpler" stock brokers, it may take you hours before understanding just exactly what is going on in your portfolio. If you don't know exactly how margin works, what SMA is, what exccess liquidity is, etc., be prepared to spend hours learning about them.
Cost - 8.5/10
Perhaps the most attractive quality about IB is the low trading costs. Comissions for stocks are only 1/2 cent per share, with a small $1 minimum, making it the cheapest stock broker around. Perfect if you're a frequent trader dealing in small quantities of stock.
One small caveat is that they do have a minimum trading limit of $10/month, or you will get a service charge, so this is not a good broker for the long term buy & hold investor.
Interest Rates - 10/10
Interest rates are exceptionally competitive at IB, with the lowest margins anywhere. Additonally, it's very well listed on a chart and in summary reports. If you're trying to get some short interest on large amounts of money, this is probably the best place to do it.
Customer Service - 4/10
With the difficulties in the trading software, you would think that customer service is helpful, but that is just not the case here. If you want to know how to withdraw money, they can probably help you with that. If you are confused about what a certain display in the trading software means though, you're pretty much on your own with the poor documentation. Anything that is out of the ordinary and not normal, such as you not quite understanding what the heck is going on in your statement or why your withdrawl hasn't arrived, you can expect a very unhelpful customer support team.
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