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Is Interactive Brokers still the best broker to use?

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Bob111

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19 January 2018
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Hi Everyone,

Sorry if this has been asked lately but is interactive brokers still the best broker to use? I know there where posts from years ago saying it was but I can't find anything to see if this info is still current? I'm using Nabtrade at the moment and it is more down than up, plus last night none of my international trades would execute with no error message. That is pretty much the final straw to get me moving somewhere better.

On a separate note is anyone else having problems with the forums search function? I can't seem to search for anything.
 
there's a thread on IB with 2000+ posts in the brokers forum, but to summarise my experience with IB over the last 12 years or so:
  • great commissions and breadth of international product offerings - the biggest reasons to open an IB account, but take note of the minimum activity fee - if account is less than 100K USD, must generate 10 USD in commissions every month otherwise you get charged 10 USD for the month anyway
  • they charge a fee for live market data so unless you have another brokerage account that you can get the live prices from (or your account with them is big enough - eg. in the millions, plural - that it's provided to you on a complimentary basis), you will probably have to pay it, as trading blind is generally not a good idea
  • platform is quite powerful but a bit hard to use at first until you get used to it, can sometimes be a bit unintuitive eg. to sell a vertical option spread i need to put in an order to "buy" the spread at a negative price, though they have made it a bit clearer recently by adding a read-only label indicating "CREDIT" or "DEBIT" on the order form
  • super reliable infrastructure - i cannot remember the service ever going down for a significant amount of time. i believe they have several server farms scattered all over the world and if one node goes down, all traffic gets routed to another one seamlessly
  • it uses the nominee account model, not a central depository like CHESS, ie. on the miniscule (but not zero) possibility that they go under, you could potentially lose everything - save for the first 250K of your cash balance as covered by the AFG. it used to be 500K USD across all assets under SIPC, but it's now the lesser AFG coverage after the migration from IB LLC to IB Aust
  • no more margin for Aust retail customers with the migration to IB Aust. they have recently started offering a very small margin facility again, but with so many hoops to jump thru that most of us think it's not worth it, that 2000 post IB thread has some discussion on it
  • the account application process is a bit of a hassle, especially if you are using some sort of structure like a corporate trust
 
Thanks Sharkman. I might have to have a better look as the nominee account model worries me even if the risk is low.
 
Bob111 said:
Hi Everyone,

Sorry if this has been asked lately but is interactive brokers still the best broker to use? I know there where posts from years ago saying it was but I can't find anything to see if this info is still current? I'm using Nabtrade at the moment and it is more down than up, plus last night none of my international trades would execute with no error message. That is pretty much the final straw to get me moving somewhere better.
Click to expand...

Yeah I reckon IB is the best !

Don't even bother with our Aussie big four brokers, they are really just banks, broking is just a side gig, junk platforms, stupid commish schedules, this market downturn has proven this to me once and for all how **** they are!!
 
Last edited:
cutz said:
Yeah I reckon IB is the best !

Don't even bother with our Aussie big four brokers, they are really just banks, broking is just a side gig, junk platforms, stupid commish schedules, this market downturn has proven this to me once and for all how **** they are!!
Click to expand...

for frequent trading yes, the ripoff local CHESS brokers are a complete joke, you can't trade properly with a mickey mouse broker, you need a serious platform for trading and IB is just that.

but if you also run a long term buy & hold component as part of your portfolio, the CHESS brokers are fine for that. you're buying once and holding those things for years (if not forever) anyway, so the higher brokerage doesn't really matter and is a small price to pay for the peace of mind of having your holdings placed in a central depository instead of a nominee account.

better hope you don't desperately need to sell any of those holdings in times of crisis though, as we've seen recently, the CHESS brokers generally have poor infrastructure/scalability and seem to keep falling over when the sh#t hits the fan and volumes spike.
 
Sharkman said:
but if you also run a long term buy & hold component as part of your portfolio, the CHESS brokers are fine for that. you're buying once and holding those things for years (if not forever) anyway, so the higher brokerage doesn't really matter and is a small price to pay for the peace of mind of having your holdings placed in a central depository instead of a nominee account.
Click to expand...

Hey !

Yeah agree with long term holdings just collecting dividends.

Sorry, I was looking at things from a frequent trading point of view.

I'm not sure how the other local brokers are travelling but comsec recently banned new short option positions and pumped up margin requirements, I suppose many of their clients were caught out too short gamma.
 
all good, it's just that we don't know what the OP's objectives and circumstances are, so IB may not necessarily be an automatic choice for him. if under 200K USD (or equivalent) of trading capital i would not suggest opening an IB account, you want to stay above that 100K USD mark to avoid the minimum monthly commissions, and i would be reluctant to put more than half my trading capital into a nominee account broker. that's just me though, and i suspect that i'm on the paranoid side of the mental spectrum.
 
Sharkman said:
all good, it's just that we don't know what the OP's objectives and circumstances are, so IB may not necessarily be an automatic choice for him. if under 200K USD (or equivalent) of trading capital i would not suggest opening an IB account, you want to stay above that 100K USD mark to avoid the minimum monthly commissions, and i would be reluctant to put more than half my trading capital into a nominee account broker. that's just me though, and i suspect that i'm on the paranoid side of the mental spectrum.
Click to expand...
If I went with IB it would be more than 200k USD but my foil hat is starting to feel a bit tight when it comes to putting all my eggs in the one basket.
 
WOW. I was just told by Nabtrade that their conditional order system is unproven and that if you try and place a conditional order on international shares then some might sneak through but the majority will definitely fail. I thought he was joking at first but he was dead serious. Don't really have a choice but to go across to IB now.
 
Hi guys, it's my first time here.
I trade equities in Brazil and as I'm now living in Japan, I am looking for trading in Australia. As the Australian stock market is bit similar to ours.

I traded for two prop traders and a family office (current) for bit more than 4 years. But with this time zone difference of 12 hours it's getting bit hard for me.

I saw Interactive Brokers webside but it's not so clear to me how they calculate the leverage.
In Brazil it's pretty simple, for [intraday only] 25 to 50x for the best large caps, 10 to 20x for most of large and mid caps and 1 to 10 for small caps and mid caps.
So with 10k you can open up to 500k in positions. It's good to not expose a big amout of capital.

Can you guys help me with these simple information? Amout of leverage and the best brokers for me to enter in contact with.

Thank you very much for your help.

:)
 
Sharkman said:
all good, it's just that we don't know what the OP's objectives and circumstances are, so IB may not necessarily be an automatic choice for him. if under 200K USD (or equivalent) of trading capital i would not suggest opening an IB account, you want to stay above that 100K USD mark to avoid the minimum monthly commissions, and i would be reluctant to put more than half my trading capital into a nominee account broker. that's just me though, and i suspect that i'm on the paranoid side of the mental spectrum.
Click to expand...

Thank you - so you don't recommend IB in this case. So what platform would you recommend for someone with below 50k USD trading capital (for example)?

I keep seeing comments saying don't use IB if you don't have serious money, but I see no suggestions otherwise.
For instance IG also charges monthly, unless 3 trades/transactions are made within 3 months, and they charge 10USD per each of these transactions, plus currency exchange charges on each sell and buy stock transaction. (I don't know about their trading charges).
How does this compare to IB?

Many thanks in advance.
 
Are you being sarcastic?
I don't know, are you saying that with that amount of money you can't trade?

Trading with less than 50k USD.

I am trying to learn, I am not actually going to go and trade tomorrow. I am trying to learn so my questions are from a very basic perspective.
 
imaginate19 said:
Are you being sarcastic?
I don't know, are you saying that with that amount of money you can't trade?

Trading with less than 50k USD.

I am trying to learn, I am not actually going to go and trade tomorrow. I am trying to learn so my questions are from a very basic perspective.
Click to expand...

He means, what kind of trading are you planning on conducting?

Just buying some shares and holding them? Long and short futures on an intraday basis? Selling options to gain premium?

What you are planning on doing influences the recommendation.
 
Sharkman said:
  • they charge a fee for live market data so unless you have another brokerage account that you can get the live prices from (or your account with them is big enough - eg. in the millions, plural - that it's provided to you on a complimentary basis), you will probably have to pay it, as trading blind is generally not a good idea
Click to expand...

there's is a relatively new feature where you don't pay for data on an ongoing basis and you can just get a snapshot of live data for a very small fee just before you trade, I use it often when buying/selling stuff on the TSX/Venture Exchange.
 
imaginate19 said:
Are you being sarcastic?
I don't know, are you saying that with that amount of money you can't trade?

Trading with less than 50k USD.

I am trying to learn, I am not actually going to go and trade tomorrow. I am trying to learn so my questions are from a very basic perspective.
Click to expand...

Thanks @InsvestoBoy

No not being sarcastic mate,

IMO Interactive Brokers is the best for what I do which is frequent option position adjustments and a couple of buy and holds but I do pay for Aussie data, only 25bucks, most of the US data is waived, cheap brokerage, excellent risk management, excellent IT, I can go on and on.

I also use an Aussie broker for long term investments which I use as collateral for option trading ( but try not to do much in this account ) mainly offsetting index positions and some synthetic longs, but I do get screwed on brokerage and recently an event which I think caught out naked premium sellers has impacted everybody else in a negative way, hopefully those issues are going to get sorted out.

Sorry, back to my point, big 4 aussie broker if you buying stocks for the long term, they're all the same, IB is excellent for frequent trading activities.
 
Trading under 50K US is fine.
Its around 15K to start up an account
Then you can trade anything listed.

Its a bit of a marathon setting up an account but once on
its seamless.
 

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