Online Broker Review

Updated Saturday, March 27, 2010

Account Opening Grade: B

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Overview:

The Interactive Brokers account registration process is well done. While the time required to complete the process might be greater than what is typical, this is because there are more account options available at Interactive Brokers compared to most of the competition.

Details:

Minimum initial account deposit: $10,000

I selected to open an individual brokerage account.

The Interactive Brokers welcome screen (click on images for larger views):

I selected to sign up for margin access. Interactive Brokers has two different types of margin accounts. One is a standard margin account restricted by Regulation T while the second type offers more flexibility, though is available only to those with $100,000 to invest:

Interactive Brokers has a different market data policy than most competitors. Typically, brokers offers delayed quotes free of charge while streaming quotes are often available for accounts that meet certain asset or trade frequency requirements. Interactive Brokers offers free streaming quotes for some exchanges and securities types, such as FX, but charges for most streaming quotes per exchange per month. Delayed quotes are not offered at all (Update: Interactive Brokers now provides free delayed market data for most exchanges):

Most notable are the fees for US stocks, options, futures and bonds ($10) and level II quotes on the New York Stock Exchange ($25) and NASDAQ ($15). Let me make this clear - pricing information within the Interactive Brokers software is not available whatsoever for US traded stocks and options without paying a monthly fee. Click on the image below for the full list of streaming market data sources and the price per month for each:

Once users select which market data sources they want, each source has its own service agreement to read and verify. Finishing this step can be quite time consuming depending on the number of sources requested so make sure you are actually interested in a market data source, even if it is free.

There are two different trade pricing structures to choose from. Please see our commissions and fees page for more information:

For the last step, users are prompted with account funding options. I selected to sign up for electronic funds transfers from my Bank of America checking account. Initiating this service requires micro transaction verification, which was completed a few days after account registration.

A week after registration, I received a mailing from Interactive Brokers containing a pass code card. The pass code card, which is the size of a credit card, consists of an ordered list of codes that must be entered before logging in to Interactive Brokers. While I am sure it enhances security, for me it simply amounts to unneeded hassle.

Interactive Brokers Account Opening