Why Interactive Brokers is My Brokerage of Choice?

Stock or equity trading is one of my favorite topics that I love to exchange ideas with. For me, being in the stock markets can be an exciting or worrying experience. 

Why? Because even if you know what you are doing, when the prices goes up, you can be happy like a bird or if it goes down, it could affect your mood the whole day. If you are me, trading the US markets, it means you might not have a good night sleep. This is true even for swan (sleep well at night) stocks. 

So when people ask me to share more about equity trading and where do I buy them from, I would always introduce and advocate Interactive Brokers. They are my favorite broker of choice. Like many Singaporeans, I started my equity trading journey with Poems, OCBC and Standard Charted bank.

However for US equity markets, Interactive Brokers is my number one choice. 

Here are some reasons why I recommend them, by the way there is no referral link for interactive Brokers 😂

  1. Low Trading Cost – The transaction fees for Interactive Brokers is very cheap. If you are like me, buying small amounts but dont want to pay much on commission fees, do know that IB charges mainly USD 1 per transaction.  
  2. Great Forex Rates – I can transfer SGD from my Singapore bank over to their HK Citibank account. Money is verified within 3-4 hours. Upon confirmation, you can use it to purchase USD via the spot rate. This is generally way cheaper than what you can get from the banks. Transaction fee is also cheap, USD 2. Cant find else where.
  3. After Market Equity Purchase – Ever wondered how to buy or sell stocks after market hours? Well I found out Interactive Brokers allows after market equity trading. The fees is 2-3x higher versus normal trading hours but its still considered cheap. BTW 2-3x fees is like USD 3.
  4. Stock Interest – Join the high yield program on Interactive Brokers. The program allows us to lend our shares out to short sellers, the shares loans would return a nice interest on a monthly basis. You can’t control what gets loaned and how much you earn, as the system will auto allocate.    
  5. Market Access – Access to multiple markets like Australia, Hongkong, US, UK for example. We could also access other types of investment products like shares, etf, bonds, options, commodities and forex. Do note, transaction fee varies like for Australia is typically $6, so please have a look at the fees before you make any transactions.  
  6. Joint Accounts / Virtual Accounts – Looking to co invest with your spouse, sibling or parents? You can setup joint accounts in IB and both parties can have access. You can also set the % of the ownership like property joint in tenancy or tenancy in common. The virtual account allows you to trade paper money to do trial and errors first.
  7. Pay as You Need – Subscribe and pay for the services or systems that you need for trading. If you dont need them, you dont need to pay, which is why our basic account and underlying service from IB is good but charged at very low prices. 

Disclaimer, know the cons as well

  • Minimum Investment Amount – The account requires a min of USD 100,000 worth of investments in the account, else you would be charges a monthly fee of USD 10. 
  • Delay Data – Do note that for the basic account, the prices for each equity counters are delayed. This can be hard to put in the right selling or buying price, but you can use tools like Tradingview.com or other services to get prices closer to real time or you can purchase a service from IB.

Don’t wait already, Sign up now. But of course, please still do your own due diligence and decision on which broker to choice from. You can checkout my post on which trading brokers Singaporeans should use.
Tips:

  • Interactive Brokers does provide SGX shares, however as Singaporeans we cannot buy through Interactive Brokers which sucks for us.😞
  • 1st three months of using IB, monthly commission is waived

Images – https://pixabay.com/photos/stock-exchange-trading-floor-738671/

EntityX

EntityX, Random Blogger and Geek, part of Ourlifexp Team

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