Profile of Interactive Brokers
Interactive Brokers (known as IB) is a very popular day trading brokerage. IB is based in the US, but they offer accounts in several countries including Canada, the UK, and Germany, and they will accept traders from almost any country. IB is a direct access brokerage, and offers access to exchanges in the US, Canada, Europe, and Asia and allows trading of their markets via a single interface known as their Universal Account. IB is a very Internet oriented brokerage, and almost anything that needs to be done (either trading or account management) can be done via either their trading software or their web site.
Opening an Account
An account with IB can be opened completely via their web site, and only takes approximately 15 minutes to complete. The initial equity deposit needs to be at least $10,000 (or its equivalent in several other currencies), and this can be deposited electronically as part of the account opening process. Once an account is opened, there is a small delay for the initial deposit to clear, but afterwards trading can be started immediately.
Trading Fees
IB claims to have some of the lowest commissions and fees, and this appears to be true (especially when compared with traditional brokerages). IB offers two different commission structures, including a bundled option where the exchange fees and brokerage commissions are combined into a single flat fee, and a separate option where the exchange fees and brokerage commissions are charged separately. For most new day traders, the bundled option is the better option, as it is the easiest to understand, and still offers very low fees. IB's market data fees are either free (if the exchange is free) or very low, and some market data fees are waived if at least $30 in trading commission is due each month.
Trading Software
IB provides trading software called Trader Workstation (known as TWS). TWS is programmed in Java, so it will run on Windows, Mac, and Unix systems, which can be useful, but unfortunately it is not as fast or stable as it would be if it was programmed in C or C++. TWS allows trading of all of the markets that IB offers via a single interface, and also provides some account management features. The learning curve for TWS can be quite steep, but trading can be started once a few basic tasks have been learned. TWS also provides an API (a programming interface) in several programming languages, and this can be used to access almost all of TWS's features via other programs. There are many compatible programs available including charting (such as Sierra Chart), and order entry software (such as Bracket Trader), so day traders can use a trading interface that they prefer without learning all about TWS.
