Interactive Brokers Launches Commission-Free Trading

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.

In a statement, Interactive Brokers said that the new service would be supported by the sale of client order flow to Market Makers Market Makers Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v Read this Term - 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 Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term services.

“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.