Everything You Ever Needed To Know About Interactive Brokers

Interactive Brokers (IBKR) is my favourite trading platform out there. I use it for everything.

Seriously - my personal accounts, my business accounts and I even help my family manage their investments through them as well.

Now, this doesn't make me biased - Interactive Brokers is not for everyone, and in this review I am going to walk you through:

• What exactly Interactive Brokers is

• Who its for and who it's not for

• Understanding the different platforms

• Market Coverage

• Fees/Commissions

• Some important advantages that may be hidden

• Comparing other brokerage options in Canada

Keep in mind we are talking specifically about Interactive Brokers Canada (since Wealth Awesome is 100% focused on Canadian personal finance).

What is Interactive Brokers?

Interactive Brokers (IBKR) Canada is a trading platform that operates globally and provides one of the most robust platforms for retail investors. They have many different versions of their applications (desktop, web, multiple mobile versions) that cater to different levels of investors and traders. Whether you are an aspiring trader, or buying some ETFs and setting and forgetting - they have something for you.

In IBKR Canada covers non registered accounts, as well as registered accounts such as TFSAs, RRSPs, RESPs etc.

Interactive Brokers Canada Inc. is a member of the Canadian Investment Regulatory Organization (CIRO) and Member - Canadian Investor Protection Fund. 

Who is Interactive Brokers for?

If you asked IBKR Canada, they of course would of course say they are right for you, whoever you are ... but, lets be honest. There is a huge range of brokerages out there - Questrade, Wealthsimple, Q Trade - not to mention each of the offerings from the big banks - TD Direct Investing, RBC Direct Investing etc.

Personally, Interactive Brokers does have a steeper learning curve (although they do have IBKR Global Trader which is focused on a simpler mobile interface) - because they offer so much. I like to think of it as giving us all institutional capability but in a very usable package.

So if you want low cost trading, access to a large range of markets, embedded research and the ultimate flexibility - I would say definitely go with Interactive Brokers.

If you are looking for things like automated portfolios or handheld advice - then you are better off with platforms like Wealthsimple or Questrade.

• Wealthsimple vs Interactive Brokers

• Interactive Brokers vs Questrade

But if you are looking for a powerful experience, with all the bells and whistles, your time invested in getting set up with IBKR is worth it.

Interactive Brokers platforms available for Canadians

There are a range of platforms that you have access to for Interactive Brokers depending on what you are looking for. These are all available on the same login:

Personally I am a big fan of IBKR mobile and find that it has pretty much everything I need to actually get things done.

The Trader Workstation and IBKR Desktop are the 'serious' platforms, for those actually willing to download something and set up a trading interface. But if you are just out to buy a few stocks and some ETFs then you can do that through the web based Client Portal, or one of the two mobile apps.

I personally use IBKR Desktop and I love the fact that you can create custom screeners and layouts - as an example, this is my personal dashboard tracking some indicators across US sectors.

Interactive Brokers Market Coverage

This is where there is absolutely no contest. Interactive Brokers covers 150 markets and 33 currencies.

So pretty much anything you can think of. It is pretty amazing to have that at your fingertips - if that is what you are looking for. Here is their full coverage:

Canada: TSX, TSX Venture, CSE, Aequitas NEO, Aequitas NEO Lit, Alpha, Chi-X, Chi-X2, NASDAQ Canada (CXD), Omega ECN, Lynx, MatchNow

United States: NYSE, NASDAQ, NYSE American (AMEX), ARCA, BATS, IEX, EDGX, OTC Markets

United Kingdom: LSE (London Stock Exchange), LSE International Order Book (IOB), Turquoise

Europe: Euronext Paris, Euronext Amsterdam, Euronext Brussels, Euronext Lisbon, Deutsche Börse (Xetra), SIX Swiss Exchange, BME (Bolsa de Madrid), Vienna Stock Exchange, OMX Stockholm, OMX Helsinki, OMX Copenhagen, OMX Iceland, OMX Tallinn, OMX Riga, OMX Vilnius

Australia: ASX (Australian Securities Exchange), Chi-X Australia

Japan: TSE (Tokyo Stock Exchange), JASDAQ

Hong Kong: HKEX (Hong Kong Stock Exchange)

Singapore: SGX (Singapore Exchange)

India: NSE (National Stock Exchange), BSE (Bombay Stock Exchange)

Other International: BM&FBOVESPA (Brazil), JSE (Johannesburg Stock Exchange, South Africa), Tel Aviv Stock Exchange (Israel), KRX (Korea Exchange), Bursa Malaysia, NZX (New Zealand Exchange), Mexican Stock Exchange (BMV)

Interactive Brokers Canada fees

The fee structure for most things are relatively simple. In the platform you can choose between 'tiered and fixed' pricing depending on the volume you trade. I will just show the fixed version:

Stocks and ETFs

• $0.01 CAD per share with a minimum of $1. Maximum is 0.5% of the trade order

• Examples:

  • Buy 25 shares of AAPL trading at $190 = $1.00

  • Buy 3000 shares of AAPL trading at $190 = $30

Options

• Under 10,000 contracts per month = $1.25 CAD per contract with a minimum of $1.50

While this may be higher than $0 commission, one thing you need to watch out for with other brokers is the interest rate charged on margin, how much interest you get on your cash and the FX fees. See the next section. Do your research beyond the marketing to actually get low cost trading.

A few important notes

With so many trading platforms out there, you have to be watchful of what exactly is free and what is not.

Because IBKR has some of the lowest fees in Canada, they don't usually go the whole 'free commission' route.

So as an example:

• Questrade has free ETF purchases, but might charge a subscription fee

• Wealthsimple has $0 commissions but then charges exchange rate markups

Other things to note are the differences in margin rates. Often times you will see brokerages post a lower rate and they keep the spread. Bottom line - take a look at the fine print whatever you do.

This article talks a bit more about how $0 commission is not always free

Want to go deeper? Check out our

Interactive Brokers in depth review