Interactive Brokersearned the top spot in our listing thanks to its powerful Trader Workstation platform, easy access to a vast selection of global markets and rock-bottom trading commissions. These features and more make Interactive Brokers the preferred trading platform for professionals at hedge funds and investment firms.
In our research, we found that Interactive Brokers stood out by charging substantially lower fees than its rivals in several areas. It’s IBKR Pro tiered pricing plan offers better rates for direct access trading than other leading trading platforms for professionals. We also noted lower commissions for futures trading, and the lowest margin rates among the platforms we surveyed.
Note that $0 stock commissions are available on Interactive Brokers’s IBKR Lite platform for non-professional traders.
We were impressed by the flagship Trader WorkStation platform and the quality of order execution. Trader WorkStation offers highly customizable alerts, watchlists and sophisticated charting. It features advanced order types. Traders can stay on top of the news with the latest reports from Reuters, Dow Jones and a variety of other sources on the platform.
Trader WorkStation includes essential features for day traders, such as hot keys, which allow traders to rapidly place preset orders with the stroke of a single key. Traders also have access to Level 2 quotes, which show the best bid and ask prices from each market participant. Time and sales data, sometimes known as “the tape” is also available. This is a streaming record of all stock transactions made throughout the trading day, including trade size, price and time.
A total of 135 markets in 33 countries are available for trading. Interactive Brokers clients can trade global stocks, options, futures, currencies, bonds and funds all from a single platform.
Accounts can be funded in multiple currencies and assets can be denominated in multiple currencies. Clients can trade a dizzying range of markets—from stocks on the Mexican Stock Exchange to futures on Italy’s Borsa Italiana. Penny stocks and fractional share trading are also available.
Quality of order execution is of paramount importance to day traders. Direct market access is available for both stocks and options, allowing traders to decide how they want their orders to be routed.
To facilitate optimal order execution, Interactive Brokers created a software product called Smart Routing, which continually scans competing markets and automatically routes orders directly to the best ECN or market center.
IHS Markit, a third-party provider of transaction analysis, determined that Interactive Brokers’ US stock price executions were significantly better than industry rivals during the first half of 2020; with a net price improvement of $0.62 versus an industry average of $0.15.