Pricing Schedule
If both IBKR Lite and IBKR Pro accounts can trade the same investment vehicles, what sets them apart? The main difference is in the commissions.
IBKR Lite customers don’t pay trade fees on U.S.-listed stocks and ETFs. They also get free real-time data on those securities, which Pro customers do not receive.
However, Interactive Brokers does not offer SmartRouting to Lite customers. SmartRouting is the company’s order routing system that seeks the highest probability of fill at the lowest all-in cost across available exchanges.
The pricing for other securities is the same or similar for Lite accounts. Option trades range from 65¢ to 15¢ per contract, depending on the account’s monthly trade volume, with a $1 minimum per order. If an option order is directly routed, the commission is $1 per contract with a $1.00 minimum.
Lite accounts also pay higher margin interest. The current rate is 7,33% on all balance tiers (Pro accounts get a rate that’s 1.00% lower). Lite customers also earn less interest on free cash balances, with the APY currently at 0.0%.
Website Portal
The first trading platform for Lite customers is the client portal. It’s accessed through a browser, and Interactive Brokers requires a one-time access code sent to a mobile phone, in addition to a user ID and password.
Inside our test account, we found a small watchlist in a compact window on the dashboard. This can be expanded into its own page with more listings and additional watchlists. Account management tools, such as transaction history and a funds transfer tool, are also available.
Charting on the client portal is very basic. A graph cannot be displayed the full width of the monitor, and there are fewer than 20 technical studies available. There’s no comparison tool, and the maximum timeframe is 5 years.
Mobile App
IBKR Lite traders also have access to the broker’s mobile app. The order ticket includes some useful features, like a chart on the side that can be swiped over the ticket. The chart shows up to 6 months of price history with 3 graph styles, and technical studies can also be displayed. Users can view up to 5 years of price data by clicking the configure wheel.
Order types include limit, market, stop, stop limit, trailing, on-the-close, relative, and adaptive. Advanced order types like bracket, stop loss, and profit taker are also available. Direct-access routing, however, is not included on the ticket.
Charting on the mobile platform can be viewed in wide-screen mode and actually offers more technical studies than the client portal.
Bloomberg US and Asia video streams are available on the mobile app, along with Traders’ Insight video commentary and RealVision video.
One feature we appreciate about IB’s mobile app is the simulated trading mode, which allows beginners to get extra practice. However, we’re disappointed by the lack of mobile check deposit.
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Web Trader
Although direct-access routing isn’t available on the mobile app or client portal, it is available on WebTrader, another browser-based platform at Interactive Brokers. Unfortunately, IBKR Lite clients don’t have access to it.
Desktop Software
While IBKR Lite accounts don’t have Web Trader, they do get Trader Workstation, Interactive Brokers’ most advanced software program. It offers many powerful trading features, including direct-access routing. Other available features include Level II data, forex trading, time & sales info, iBot, and more.
Very advanced charting is finally available to Lite clients. Up to 40 years of price history can be displayed. We counted at least 100 studies. Drawing tools include arrows, Fibonacci lines, and text boxes.
The order ticket is located in the top-left corner of the platform. It includes many advanced features, such as OCO (one cancels other) orders and hedge preferences.
A “check margin” button is on the order ticket under the “advanced” menu. This allows you to find initial and maintenance margin requirements for any ticker symbol.
Other Tools
Interactive Brokers offers API functionality for Pro customers only. Lite customers can use a smartwatch platform for Apple phones, though iMessaging is not available.
iBot is available as a skill on Amazon Echo devices. It can read business summaries of stocks, provide quotes, explain how to open an IB account, and give dates of upcoming company events.
However, there is no IB app for Apple TV.
Option Tools
Option tools on the client portal are quite limited. There are no pre-installed multi-leg strategies.
On the mobile app, you can build your own multi-leg strategies. The app includes an option spread template.
On Trader Workstation, it’s a completely different experience. OptionTrader is a window (launched from the “New Window” button in the upper-left corner) that provides many useful tools. These include option chains, multi-leg strategies like iron condors and boxes, Greek values, and profit & loss diagrams.
Investment Research
Interactive Brokers offers solid research tools. An ETF screener is available on the client portal. Separate searches are needed for bond ETFs and stock ETFs, and volume and price are searchable criteria. The same tool can scan for U.S. stocks and foreign investments.
The Interactive Brokers website features an educational hub with articles, webinars, videos, and courses. Topics include options pricing, how to place a short sale, and generating income in a retirement account.
On the client portal, stocks have a decent amount of information. After entering a ticker symbol, click on “Fundamentals” on the stock’s profile. You’ll find details on dividend payments, analyst ratings with price targets, fund ownership, EPS history with estimates and actual numbers, SEC statements, key ratios like price/book, and a company profile.
The one feature we were looking for but couldn’t find was stock reports in PDF format from third-party analysts.
Mutual Funds and ETFs
IBKR Lite customers can buy and sell around 26,450 mutual funds from about 285 fund families. Around 7,000 of these are no-load, and about 8,300 have no transaction fee. Non-U.S. residents have access to a smaller list of mutual funds.
The mutual fund scanner in the desktop TWS and client portal offers a lot of functionality and allows sorting based on Lipper ratings, yield, returns, expense ratios, and more.
Money market funds have a minimum investment of $10,000, while other funds start at $3,000. Transaction-fee funds cost $14.95 per trade or 3% of the trade value, whichever is lower.
Account Types
Several account types can be opened with the IBKR Lite commission schedule, including individual, joint, UGMA/UTMA, trusts, and IRAs. IRA types include traditional, Roth, rollover, SEP, and inherited IRAs. SIMPLE IRAs are not available.
Other account types offered by Interactive Brokers for institutional investors cannot use IBKR Lite.
Banking Features
IBKR Lite customers can enroll in the broker’s FDIC-sweep program, which offers up to $2,500,000 in government insurance, five times the normal level. As mentioned earlier, IB pays interest on free cash balances. Bill pay is available, but there are per-transaction charges.
A debit card from Mastercard can be linked to an IBKR Lite account at no cost. It works with Android, Apple, and Samsung Pay. However, there are no ATM refunds, and IB doesn’t offer checkwriting.
Foreign Stocks
IBKR Lite accounts have the same access to foreign markets as other IB clients. This includes not only international stocks but also other financial products like bonds and options. These assets can be traded on foreign exchanges using Trader Workstation, with very reasonable commissions.
Day Trading
IBKR Lite offers several services that day traders will find useful, especially on the desktop software. The following points should also be noted:
Short Locate
Interactive Brokers offers a convenient short locate tool on its website. You simply enter a ticker symbol, and the tool shows how many shares are available for shorting and the cost to short the stock.
Level II Quotes
Available on Trader Workstation, Level II quotes display the bid and ask prices available through specific market venues.
Direct-Access Routing
Also available on Trader Workstation, this feature allows you to send orders to specific exchanges.
Margin
For IBKR Lite clients, the initial and maintenance margin requirements are 25% for long stock positions. The end-of-day margin requirement is 50%.
IBKR Lite Margin Rates
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Debit Balance
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Margin Rate
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$0 - $100,000
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7,33%
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$100,001 - $1,000,000
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7,33%
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$1,000,001 - $50,000,000
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7,33%
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$50,000,001+
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7,33%
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IBKR Pro Margin Rates
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Debit Balance
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Margin Rate
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$0 - $100,000
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6,33%
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$100,001 - $1,000,000
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5,83%
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$1,000,001 - $50,000,000
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5,53%
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$50,500,001+
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5,33%
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Other Services
IBKR Lite customers can enroll an entire account (but not individual securities) for automatic dividend reinvestment. IB does not offer periodic investments into mutual funds.
Recommendations
Mutual Fund Investors:
With the best selection of mutual funds in the industry, IB is now a great broker for mutual fund investing.
Individual Retirement Accounts: TD Ameritrade offers a wider selection of IRAs than Interactive Brokers, so it gets our approval.
Beginners: Interactive Brokers is designed for experienced traders, and nothing about IBKR Lite changes that.
Webull is a good option for new traders.
Active ETF and Stock Trading:
IB is one of the best brokers for active traders.
Long-Term Investors and Retirement Savers: Fidelity and
Charles Schwab are our recommendations.
Small Accounts: Since IBKR Lite comes with no fees or minimums, we can recommend it for small traders.
Interactive Brokers Review Summary
It seems that a paradox has been discovered: Interactive Brokers is designed for professional-level traders, but IBKR Lite is meant for basic trading. Despite this contradiction, IBKR Lite offers good value with low prices and advanced features.
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Updated on 7/19/2024.
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