Interactive Brokers: Overview
Interactive Brokers, found in 1978 is currently one of the biggest discount brokers in the world. Naturally, the broker is regulated by different financial authorities according to the country, including UK’s Financial Conduct Authority (FCA) and the US Securities and Exchange Commission (SEC), and India’s Securities and Exchange Board of India (SEBI). It has presence over a number of countries worldwide!
A one-stop solution for Indian residents interested in investing both in the Indian as well as the global markets.
Interactive Brokers: An Overview
Interactive Brokers has business on over 135 market destinations worldwide, where they provide service of trading stocks, options, futures, forex, fixed income and funds worldwide, executing about 1,746,000 trades per day.
Interactive Brokers has its headquarters in Greenwich, Connecticut. It functions with over 1400 employees in a number of countries like the USA, Switzerland, Canada, India, Hong Kong, UK, Australia, Hungary, Russia, Japan, China and Estonia.
In India, the firm is based out of Mumbai. They entered the Indian market in the year 2009, and needless to say IB is one of the best brokers around. In India, they offer trading segments for stocks, bonds and derivatives only. It has a membership in both Bombay Stock Exchange and National Stock Exchange, but allows you to trade NSE only.
Interactive Brokers: Pricing
Interactive brokers doesn’t charge an account opening fee. But it does charge maintenance and inactivity fee. If you are tarding NSE only. basically you have to pay minimum Rs.200 either in brokerage or as maintenance fee. A minimum of USD 500 i.e. Rs.35000 approximately is required to subscribe to market data and research subscriptions with this discount broker. Also, you need USD 100 i.e. Rs.7000 to maintain the market data as well as research subscriptions. This varies if you trade both NSE and overseas.
However, because this is a global brand, they offer an option to trade in multiple countries with cheapest possible rates, keep in mind that brokers also have to pay exchanges with international trades. Also, currently, RBI only allows $250,000 remittance per individual per year, which is still a decent amount for trading internationally, however margin trading is not allowed.
It charges $0.005 per share in US markets, whereas in India the brokerage is capped at Rs.20 only.
Interactive Brokers: Trading Platforms
Because IB is such a huge global company, it has so many tools that listing them is impossible. There are very efficient in terms of performance, speed, user experience and analysis and offer a ton of research reports along with basic tools like moving averages in their graphs and charts.
They offer the following applications to facilitate trading :
1. IB Web Trader: This for users who prefer trading through web portal, accessible through browser.
2. IB Trader Work Station: A pretty standard workstation IB provides a ton of tools for analysis and ever provides research reports and fundamental analysis. It has a SmartRouting facility to get you the best price for your order.
3. IB TWS Mobile: Offered both for iOS and Android, the mobile application is pretty efficient and offers all the facilities a laptop TWS does.
As mentioned, it’s not easy to list all the tools IB provides just because of the sheer quantities of them. But here are few tools that make IB unique and can help you get best experience trading using IB.
Interactive Brokers: Unique Trading Tools
1. Chart-Based Trading:
This is one of the best features for fundamental and visual traders. Chart based trading provides a one stop screen where you can do your analysis for the stock, as well as place orders by fixing your buy and sell price. It is as simple as dragging a a buy line and a sell line on the screen to the amount at which you want to buy and sell and the bot does it for you when it hits the price, sending you a notification.
2. Real Time Scanners:
This can used to sort and filter information in real-time. Along with that, you can easily find the top gainers and losers any day, and use it to check stocks at their 52-week high and lows. You can also filter according to trends, prices, etc. This can particularly useful to day traders, because you have single screen of all kinds of information.
3. Watch list:
Interactive Brokers focuses on simplicity. They provide a watch-list feature where you can have all the similar industry stocks all at one place with their trends, along with charts for selected stocks. This can be very beneficial to have a broader view of a stock, a market and industry. You can also sort the stocks according weaker and stronger performance, giving an analytical advantage.
4. Advanced Alerts:
This is one of the best features on the platform, as well one of the best features around. You can set an alert, even on the chart, when a stock hits a particular price. It provides you with a pop up, which is customizable in terms of sound, also providing you an option to write notes so that you can easily remember why you set the alert in the first place.
5. Hot Buttons:
This is a completely customizable feature for frequent trading of popular stocks. You can place an order of a particular amount with just a click of pre-assigned button. It is also customizable in terms of giving you an option for a button to cancel orders, change routing, adding a bracket order, and a ton of other such features. This can make trading more efficient and also, it’s a cool feature!
While Interactive Brokers does have a lot of features, you may not always require all this to make profitable trades. However, it does make this stock broker more attractive among its peers, user discretion advised.
Interactive Brokers: Account Opening Process
To open a Demat and trading account with interactive brokers, users will have to download the account opening form, fill it up with the necessary details and supporting documents. Mail them and then receive a confirmation for successful account opening after verification. It’s quite a simple and straightforward process.
Interactive brokers are a US-based stock broking company with operations in India that allows trading facilities in equity, currency, and derivatives. It had memberships with the NSE and BSE while offering great trading platforms as well. If you’re looking to open an account with the stockbroker, then there is a different procedure for different account types.
Open an Account for NSE Trading only
- Head to the official website and then start an online application for opening an account.
- Fill in all the parameters and download the filled up application. Ensure that you attached a copy of different documents and other proofs with the application. Once you download the filled application, you will have to pay an amount for account opening charges.
- You will need to sign all the documents with a respective witness signature and then post them to the individual address.
- Once the documents are verified and approved, you can then open your account after receiving your login credentials.
Open an Account for Residents Trading Overseas
- Start an online application and fill in all the details.
- Once filled, then attach all the respective documents that are asked. You will have to fund your application once you finish entering all your details.
- Once done, mail the documents to the given email address with the respective subject line.
- After the mail has been sent, then you should get approval with login credentials.
Open an account for Residents Trading in NSE and Overseas
- Head to the website and fill in all the details asked in the application. Once done, then head to the payment gateway to make the payments.
- After that, you will have to download the documents and the application forms for the NSE account and mail them offline to the designated address with respective signatures. For an overseas account, you can mail a soft copy with scanned documents.
- Once sent, it should take a couple of days for things to get approved.
- After approval, users should get their login credentials.
Interactive Brokers India Review
The stockbroker offers multiple parameters in opening an account. The process takes a week to get things started. The brokerage fees are quite reasonable but do its best to offer substantially better trading tools for its users.
Interactive Brokers: Account Opening Charges
| Charge Type | Amount |
|---|---|
| Trading Account Opening Charges | ₹0 |
| Demat Account Opening Charges | ₹0 |
| Trading Account AMC | ₹0 |
| Demat Account AMC | ₹0 |
Interactive Brokers: Trading Account Charges
The NSE trades are calculated at minimum Rs.6 upto Rs.20 per executed trade subject to following conditions:\n\n1. Stocks that have up to Rs.10 lakh order value per order, for the portion above Rs.10 lakh, 0.02% of the incremental value shall be charged (if placed in the same order).
Talking of F&O (futures and options), the rate is limited to 100 lots in an order. For the portion of order above 100 lots, Rs.5 per lot shall be charged. Minimum activity fee is also applied based on your account value. For a balance of Rs.100000 in your account, the activity fee gets waived off.
Interactive Brokers: Commodity Trading
About Interactive Brokers:
Interactive Brokers is not an Indian Stock Broker. It is a Global Broker with more than 1.39 million clients from over 200 countries. It Is listed on the U.S.A on NASDAQ. With interactive brokers, you can trade in 135 markets across 33 countries including U.S.A, NSE, and many more.
Interactive Brokers Features:
An Indian can open an account with Interactive Brokers to get access to international markets. Traders can only trade on the NSE (National Stock Exchange) with Interactive Brokers. This includes trading in Equity and Equity Derivatives such as Futures and Options. Unfortunately, with Interactive Brokers, you cannot trade in commodities within the Indian Markets.
There are many variants of Trading account available with Interactive Brokers, which include.
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Indian Residents (Trading NSE only)
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Indian Residents (Trading overseas only)
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Indian Residents (Trading NSE and overseas)
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NRIs (Trading NSE)
Opening Account with Interactive Brokers
Let’s look at some of the requirements that you need to fulfill for opening an account with Interactive Brokers.
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Must have a PAN card
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Address Proof and Pin mentioned in address proof should match.
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A cheque to ensure the Bank Account details of the user.
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Should be at least 21 years of age.
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A minimum deposit of 100$ has to be done at the time of account opening.
Interactive Brokers Charges:
The charges opening charges for Interactive Brokers is “0”. There are also no annual maintenance charges that you have to pay annually. Instead, you have to pay Rs 200 per month. This sums up to Rs 2400 annually as the total account charges. The brokerage of the first three months after account opening will be waived off as a bonus.
Interactive Brokers Account:
To conclude Interactive Brokers are a good option if you want to get access to global markets. For Indian trades, it might be a decent but not so great option.
Firstly, it lets you trade only on stocks listed on the NSE. Secondly, it does not provide Commodities and Currency trading in the Indian market which makes this broker not suitable for Commodity and Currency Traders.