Interactive Brokers 101
Updated: Oct 6, 2022
Table of Contents
Intro to Interactive Brokers (IBKR)
What is Interactive Brokers?
Interactive Brokers (IBKR) is a large, full-service broker that has been around for decades. A broker is a government-licensed intermediary between buyers and sellers of stocks. Other prevalent brokers include Charles Schwab, Fidelity, and TD Ameritrade. Robinhood is a broker that has gained popularity in recent years.
IBKR, like its peers, offers a wide variety of account types ranging from personal trading accounts, retirement accounts (including IRAs and 401ks), tax-advantaged accounts (including UGMAs and UTMAs), and professional accounts (including Advisor, Family Office, and Hedge Fund accounts). Anyone can sign up with IBKR and begin investing right away.
IBKR also offers extensive client protections. Under the Insured Bank Deposit Sweep Program, eligible IBKR clients can obtain up to $2,500,000 of FDIC insurance. IBKR is also an SIPC member, which means securities in client accounts are protected up to $500,000.
How does alphaAI partner with Interactive Brokers?
Investment Advisors (which we are) have two options for managing client assets: they can either partner with an external broker or bring brokerage operations in-house.
Running brokerage operations in-house is the more difficult and costly of the two options. There are many operational and technical challenges that come with this choice. Some common issues include:
Slow times to add/withdraw client funds due to operational bottlenecks
Suboptimal trading fees/commissions due to lack of scale
Suboptimal order execution due to lack of scale
Poor user experience with web and mobile apps due to technical bottlenecks
Legal challenges associated with holding client funds and sensitive information
Many of our competitors have chosen the in-house route. If a company has the resources to execute this method properly, then this is certainly the way to go. However, since we are a growing company, we have chosen to outsource all of the brokerage overhead to IBKR so that we can instead focus on what we’re good at: automated portfolio management.
Here are some of the benefits of partnering with Interactive Brokers:
You get access to all of the functionality you normally would get with any other large brokerage
You fully own your account
Access to the widest variety of account types
Add/withdraw funds at any time with no delay
IBKR has the lowest trading costs out of all large brokers
Earn interest of up to 1.83% on uninvested cash
Earn extra income on lendable shares
IBKR optimizes trade execution by searching for the best available prices across exchanges and dark pools
Access your account anytime through their web and mobile apps
Full access to customer support through phone and email
Highest security standards
What does this mean for you?
As a client, you would create an account with IBKR just like you would with any other broker. The only difference is that the account will be linked to our automated investing system. This of us as an investment management layer that sits on top of IBKR.
Intro to IBKR Client Portal
The IBKR client portal is the primary way to access and control your account. You can log in through any browser here. As an alphaAI client, you will always have 24/7 access to your account through the client portal. After you log in for the first time, you will be able to set up multi-factor authentication, which we recommend for extra security.
After logging in, you will be taken to a dashboard where you can see key details about your account, such as your portfolio value, holdings, and performance, among many other features.
To deposit or withdraw funds, click “Transfer & Pay” in the top bar then follow the instructions. A variety of methods (including ACH, wire, bill pay, and check) can be used. If you have multiple accounts at IBKR, you can also easily transfer funds or positions between accounts.
For more detailed information on your portfolio and its performance, click “Portfolio” in the top bar.
To generate detailed reports on various aspects of your account, including tax documents, click “Performance & Reports” in the top bar.
To modify your account settings (including your account profile and configuration), click the person icon in the top right next to your name, then click “Settings.”
Note that you normally would have the ability to trade by clicking the “Trade” button in the top left. But as an alphaAI client, you don’t need to worry about that since we manage your portfolio for you!
Intro to IBKR Mobile App
The IBKR mobile app is available on iOS and Android through the app store. Although it has less functionality than the Client Portal, the mobile app is a convenient way to access and control your account from your phone. You can also set up multi-factor authentication for your account to be linked to the mobile app.
After logging in, you will be taken to dashboard where you can see key details about your account. Tap the “Portfolio” icon in the bottom menu to see details about your portfolio.
Tap the menu icon (three horizontal dashes) in the top left to open the menu. From here, you will have access to a variety of features, such as account management and the ability to deposit/withdraw funds.
Note that you normally would have the ability to trade by tapping the “Trade” icon in the bottom menu. But as an alphaAI client, you don’t need to worry about that since we manage your portfolio for you!
IBKR Help and Support
IBKR provides a lot of features and functionality, and we understand that all of this can be overwhelming at first. Luckily, IBKR has an amazing customer support team.
You can call them at 1-877-442-2757
Alternatively, you can reach them online here.
We are also happy to help! Just shoot us an email: firstname.lastname@example.org