Here is a post I recently wrote on the Fool Stock Advisor board, which addresses some of the benefits of IB.
I’ll try responding to your points.
1) $1 commission is that for real? (With $10 minimum per month of course)
Yes! Naturally, there may be some transactions that cost a little more ˜$2. If you need to buy a foreign currency to purchase an equity position on a foreign exchange, you’ll pay a little more.
2) Do they charge you to change or cancel your order? How much?
No! I (accidentally) executed a couple of orders (buying Euros instead of selling them), which I cancelled with no cancellation fee.
3) If you had say 3 accounts, one taxable, one IRA for self, one IRA for wife, and you wanted to place an order to buy 100 shares of Master Card for say around 80K and then allocate 30 shares in taxable, and 35 each in the two IRA accounts, do they allow this? How much approx. commission for such a trade?
Most likely, it’s $3 for 3 transactions in 3 different accounts (I only have brokerage at this time with IB). But one can create a family account, which enables you to transact in many accounts and buy the market subscriptions that consolidate fees into the single account. This allows you to reach the minimum thresholds a lot easier than paying for market access in each account individually.
5) The $10 minimum applies to each and every account? I have 6 accounts. I might transfer 5 of them. Would I end up paying $50 per month? Might still be a good deal. But just checking. I don’t want to pay $10 from my smaller roth IRA accounts where I don’t trade often. If I have to pay the $50 commission, I rather pay it from my taxable account. Roth money is precious.
See above. Also, one should be able to have various IRAs along with a brokerage account under a single account number, which would provide a better answer to your question.
6) Do they show you historical closing values of your account?
One can pull historical balances on a daily basis. My account had money only since February, which limits the view. But I can input any data range I want. Fidelity doesn’t do this.
7) Any performance measurement tools? Do they show Daily/Monthly or YTD PnL for example? Option House had this and was very cool.
Yes! One can run a query (with daily, weekly, monthly data) that spits out performance data that compares returns against a benchmark (I forgot the benchmark and I don’t know if this may be modified.
8) How is the year end tax related tools? TD allows you to download your activity to Turbotax. However, with WellsTrade I couldn’t do this. And with option house I had a bad experience too. This is very important I think. Although TD leaves you on your own for options reporting. So it is not perfect either.
I don’t know the details yet. However, there are specific canned tax queries that include all asset classes one can run.
I have TD and they have given me lower commission. But now things have changed. Option House has me at 3.95 which is great. But why pay thousands of dollars in commission when I can get away with about $600 per year with Interactive Brokers?
It costs $7.95 @ Fidelity and $1 @ IB for an equity transaction. At Fidelity, one gets market data for free and at IB one pays about $15 monthly (waiver subject to minimum transaction fees) for about the same level of data. So I save money as long as I have <4 transactions monthly. If you’re paying $1,000s, you’ll definitely save money with IB.
The reason I went to IB is due to Fidelity telling me that they no longer want my business as I live overseas (what a bummer, because I’ve been with Fidelity since the early 90s). Initially, I had a difficult time with the platform, because it’s complex and has the look and feel of a trading platform. However, I’m becoming familiar with the platform and really like it. Something else I noticed, which is worth a lot of money in the long run, is that my IB trades execute at better prices than Fidelity. I exclusively use limits, and my purchases have executed at pretty decent levels below the limit prices compared to how Fidelity executes (It makes me think that Fidelity has been screwing me for years).
Regarding margin, if you intend to use it, it’s done differently at IB. Instead of a margin rate (Fidelity’s is >8% annually), they lend you the money, and the current rate is <2% annually. The only reason I figured this out is due to the fact that I bought $US equities in my Euro account, believing they would automatically take payment from my Euros. Instead, they lent me the $US until I bought enough to cover my purchases.
IB also has a great authentication card I use to log into my account (I hope I don’t lose it), customer service is great (they proactively contacted me to provide me with personalized training).
Here is another important point. I can access my account via the web, via an installed application and via a java applet. If you run the java versions, remember to log out of your account. Otherwise, it will stay connected, even if your computer goes asleep.
Finally, I’m really happy with my IB account, especially now that I am used to the interface. I don’t ever want to go back to Fidelity (I left my IRAs with Fidelity for the moment).
Hopefully, this helps.