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December 21, 2004
The Professional's Gateway to the World's Markets
My current broker of choice is Interactive Brokers. With the risk of this entry sounding too much like a sales pitch, here are the top 5 reasons:
5. Cheap Commissions - Since IB has direct access to the markets, commissions are much lower than a full-service broker. Trading 100 shares of stock typically costs about $1 per side. A full commissions list can be found here.
4. Trade Anywhere - The IB Trader's Workstation (TWS) is java-based, so it can be run on any system that supports Java. In addition, there is also trading via mobile phones, networks behind firewalls, and telephone-directed ordering (for a fee).
3. Trade Anything - Whether it is Futures in Sydney, Stocks in Tokyo, or Options in London, you can trade it with IB. While I am currently not trading any international securities, it is great to know that they are available. Keep in mind that you may have to pay data fees in order to trade in some markets and that each market has different trading requirements.
2. Trade Any Time - Even though your market of choice may be closed, there is always a market open somewhere in the world. With IB, you can participate in almost any world market at any time, as long as it is open for trading.
1. Application Program Interface Software
- IB currently has API Software available for Java, C++, ActiveX, and Excel DDI. You can use these socket-based API's to access market data, place orders, etc. I have set up a Wiki about the API here and there are also excellent discussion forums here and here. In addition, the API documentation can be found here.
What sold me, of course, is the API software. The idea of writing a completely automated program in Java to buy and sell securities is very intriguing to me. I am currently doing this in my spare time so if I all of a sudden stop writing about Java and start writing about the new Ferrari's I am constantly buying, you know it worked out.
There are some people, however, that IB is not for. The biggest group would be those that do not have sufficient knowledge of how the markets work. IB makes it very easy to trade in a variety of markets, but many of the specific options associated with those trades can be daunting. Make sure you know what you are doing before hand. In addition, those who want the advice of a financial advisor should probably stay away as well.
Still, if you feel that a direct access broker is for you and you want the ability to write programs that integrate with the markets, I highly recommend IB.
Posted by Chuck at December 21, 2004 02:04 PM
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