Brief informationInteractive Brokers
Interactive Brokers is a US brokerage firm. This is an old enterprise: it appeared “not yesterday”, but in 1978. Today Interactive Brokers operates in 125 markets around the world, carries out almost a million transactions per day and has its own capital, which exceeds $ 7 billion.
... 42 years ago everything began with one person - Thomas Peterfi. He is an innovator in the field of computer commerce. Now you will understand that they call him so for a reason.
In 1977, Peterfi bought a seat on the American Stock Exchange (AMEX) and became a member of it. In 1979, Peterfi was the first to print generated tables of current market value. In 1983, he created the first portable computers for trading. After 4 years, Peterfi was the first to automatically create and send orders to the market. And from 1993 to 1994, he launched Interactive Brokers, as we know it. It was the first to offer direct access to IEX in 2014.
Broker opens "doors" for his clients at NYSE, FINRA, SIPC. It is under the supervision of the SEC and CFTC. And you can visit his office in Greenwich, Connecticut. In total there are 24 representative offices in 12 countries: in Russia, too.
Interactive Brokers trading conditions
Interactive Brokers conducts transactions with various instruments. The choice of the latter is great: stocks, options, futures, futures options, warrants, currencies, indices, funds, CFDs, etc. In order to access all this, you need to open only one account.
Minimum deposit with Interactive Brokers
The company canceled a minimum deposit of $ 10,000. You can start with $ 100. However, this is disadvantageous. If the account has less than $ 2,000, a higher commission for inaction is charged (we will tell you more about it below).
Service conditions: rates of commissions
Interactive Brokers has two tariff plans: Fixed and Tiered. They differ in the way commissions for transactions are calculated.
Fixed
According to this plan, a fixed amount per share or a certain percentage of the transaction value is charged. For Russia, the volumes of fees are not indicated: although Interactive Brokers accepts applications for opening accounts from Russians.
For example, for the USA, the fee is: $ 1 - the minimum per order, and the maximum per order is 1% of the transaction value.
Tiered
And in this regard, fees depend on the volume of trading activities. The more actively you trade, the less you pay a broker. And also you save money on exchange, regulatory and clearing receipts.
In the USA, the commission for a share is formed from two indicators: (1) a variable, as well as (2) a minimum per order of $ 0.35 or a maximum per order - 1% of the transaction value. The upper limit of the variable is: if the monthly volume of shares is less than 300,000, then $ 0.0035 will be charged. And the bottom one is: if the monthly volume of shares is more than 100,000,000, then we are talking about $ 0,0005.
Interactive Brokers Commission for doing nothing
If you do not trade, you need to pay a penalty fee. All fees that you pay for your activity during the billing month are taken from the latter.
The inaction fee depends on the market value of your assets:
- less than $2 000 – commission is $20;
- less than $100 000 – commission is $10;
- more than $100 000 – commission is $0.
EXAMPLE. If your assets cost $ 15,000, then $ 10 will be charged monthly. If you opened deals and spent $ 7 on commissions, then you will be charged only $ 3.
How to open account with Interactive Brokers
You have read the trading conditions of Interactive Brokers. It's time to open an account: for this you need to submit an application. The review process takes 2-3 weeks. In theory, it can be accelerated by depositing funds. In practice, some Russian banks do not accept payment if you do not present an agreement and a certificate on opening an account. But these documents will be in your hands when Interactive Brokers approves your application.
If you are a resident of Russia, you need to submit the W8-BEN form. So, the Russian Federation and the USA signed an agreement on the avoidance of double taxation. This means that dividends on US stocks will be received tax-free. You will have to file a 3-personal income tax return and pay 3% yourself at the Central Bank rate. Even if you made money on stocks through a Russian broker, the process of calculating the tax and filing a tax return would be the same.
Interactive Brokers also has a demo. The company suggests starting with it, and then switching to a trading account. In fact, the trial version differs from the full version only in one parameter: you do not risk real money.
What do you get by opening an account with Interactive Brokers:
- access to all platforms (Trader Workstation and many broker’s developments);
- research subscription;
- market data for all products;
- trading instruments.
Withdrawal of funds with Interactive Brokers
To withdraw money, you need to submit a request. Once every 30 days, this is a free option. And as for the next withdrawals, you will have to pay a commission. So, a trader from Russia is automatically charged 330 rubles.
Training with Interactive Brokers
Interactive Brokers has a huge educational section on its website. Its major drawback is that most of the materials are in English. If you have at least an Intermediate Level, be sure to watch webinars and short videos.
Interactive Brokers believes that even experienced traders should continue to learn. Therefore, they organized the Academy of Trading. This is a set of free materials that can be accessed upon request.
Referral program
While working with Interactive Brokers you can only rely on bonuses if you join a referral program. The reward is due to those who invited new customers. There is no link with a unique id. In the system, you need to fix the name and email of a friend so that the broker sends him an invitation to open an account.
A payout of $ 100 can be expected when the friend’s commissions reach $ 333.34.
Support with Interactive Brokers
Firstly, Interactive Brokers has a FAQ section for answers to popular questions in English. Secondly, there are several channels for communication with specialists. You can write to chat and email. But it is better to call: fortunately, there is Russian-language support. It works from Monday to Friday: they answer the phone from 8:00 to 17:00 Zurich.
