Interactive Brokers Launches Commission-Free Trading

IBKR Lite will be supported by selling client order flow to market makers

Interactive Brokers announced the launch of a new commission-free trading application on Thursday evening.

The US retail broker said that the new service, IBKR Lite, will allow users to invest in US stocks and exchange-traded funds with no commission or market data fees.

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In a statement, Interactive Brokers said that the new service would be supported by the sale of client order flow to market makers – a controversial practice which has proved extremely lucrative for fellow equities broker Robinhood.

Attracting a broader audience

Another service, IBKR Pro, will also be available to clients. That will cost more but allows traders to access better execution services.

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“Interactive Brokers has always been known as the low-cost broker for sophisticated investors and institutions,” said Thomas Peterffy, chairman and CEO of Interactive Brokers.

“In order to attract a broader audience, we wanted to remove any impediments to opening an IBKR account. With the addition of no commissions or fees to trade US exchange-listed stocks and ETFs, no account minimums, and no cost to maintain an account for IBKR Lite, we believe Interactive Brokers will offer the best pricing options for both professional and retail investors.”

The market for commission-free trading is heating up in the US and Europe, though it remains unclear as to how profitable the service can really be unless a company sells its order flow to market makers.

 

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