Take Your Investing to the Next Level! Interactive Brokers (IBKR) provides clients from all over the globe with the ability to invest worldwide at the lowest cost. Interactive Brokers conducts its broker/dealer business on over 135 market destinations worldwide. In its broker dealer agency business, IBKR provides direct access ("on line") trade execution and clearing services to institutional and professional traders for a wide variety of electronically traded products including stocks, options, futures, forex, fixed income and funds worldwide. Interactive Brokers Group and its affiliates execute over 2,109,000 trades per day.
How you make money
Interactive Brokers has an expansive trading platform that allows you to earn in many ways. You can earn a return through the appreciation of stocks, options, ETFs, currencies, and even metals. You can also earn passive income through dividend stocks. Interactive Brokers offers futures trading, options trading, and margin trading.
Unlike other brokers with separate bank accounts in which you have to transfer cash back and forth, IBKR's cash management is integrated into your broker account. This means that you can always borrow at the lowest rates without having to worry about first transferring cash. You can earn extra income on the fully-paid shares of stock held in your account. IBKR borrows your shares to lend to traders who want to short and are willing to pay interest to borrow the shares. Each day shares are on loan you are paid interest while retaining the ability to trade your loaned stock without restrictions.
How Interactive Brokers makes money
Interactive Brokers offers commission free trading and no management fee. They likely make money in several different ways:
- Paid Subscription: They offer premium paid options
- Rebates from market makers and trading venues: Market makers (typically big institutions/funds) buy directly through the brokers to have discounted purchases. For that ability, the market makers pay a rebate to the brokerage to receive their orders . The brokerage sends your orders to the market maker that is most likely to execute at the best price for you and makes a few cents on each trade.
- Income generated from cash: They borrow the cash sitting in your account and invest it into interest earning accounts and keep the profit.
- Margin Lending: They collect interest on money they lend to investors.
- Stock loan income from counterparties: They receive interest for loaning out shares for short sales.
Is it safe?
Interactive Brokers was founded over 44 years ago and has grown internally to become one of the premier securities firms with over $10 billion in equity capital. Interactive Brokers conducts its broker/dealer business on over 135 market destinations worldwide, executing over 2,621,000 trades per day. IBKR is headquartered in Greenwich, Connecticut, and has 2,500+ employees in its offices in the USA, Switzerland, Canada, Hong Kong, UK, Australia, Hungary, Russia, Japan, India, China, Luxembourg, Singapore, Ireland, and Estonia. IBKR is regulated by the SEC, FINRA. NYSE, FCA, and other regulatory agencies around the world.
Under the Insured Bank Deposit Sweep Program, eligible IBKR clients can obtain up to $2,500,000 of FDIC insurance in addition to the existing $250,000 SIPC coverage for total coverage of $2,750,000. IBKR sweeps each participating client's free credit balances daily to one or more banks, up to $246,500 per bank, allowing for the accrual of interest and keeping within the FDIC protected threshold. Cash balances above $2,750,000 remain subject to safeguarding under the SEC's Customer Protection Rule 15c3-3, backed by the firm's equity capital, which exceeds $9 billion.