Best Institutional Trading Platforms
What You Should Know
- Institutional Trading Platforms offer very tight spreads and low commissions on the trades. Larger trades lower the commission fee per unit of asset.
- Institutional trading platforms are usually available to financial institutions, including hedge funds, private bankers, and financial dealers.
- Retail traders cannot set up an institutional trading account, but they have many other platforms to choose from.
Best Institutional Trading Platforms
| Name | Products & Services | Commissions | Clients |
|---|---|---|---|
Interactive Brokers | Stocks/ETFs Options Futures Spot Currencies Bonds | Stocks/ETFs: US$0.0005 - US$0.0035 /share Options: US$0.15 - US$0.65 /contract Futures: US$0.25 - US$0.85 /contract Spot Currencies: 0.08bps - 0.20bps Bonds: 10bps |
|
MarketAxess | Bonds --------- Custom solutions for clients | EU: 0.015bps - 3bps USD Investment Grade: 0.1bps - 0.5bps USD High Yield: 3bps - 6.2bps Other: up to 6.25bps |
|
Lightspeed | Stocks/ETFs Options Futures --------- Hedge Fund Formation, Accounting, Legal & Compliance, Dedicated Account Management, Middle Office Support, Onboarding | Stocks/ETFs: Up to $0.0035 /share Options: Up to $0.50 /contract Futures: $1.29 - $1.79 /side |
|
Iress | Stocks/ETFs Options Futures Bonds | Not Available | Not Available |
What Is Institutional Trading Platform
Institutional trading platforms allow large financial companies to facilitate large-scale transactions in different markets and access relevant industry data. These platforms are similar to retail trading platforms, but they have some specific differences:
- Tighter spreads
- Low commissions
- High minimum transaction volume
- Trade reporting solutions
- Access to industry data providers
Institutional trading platforms offer a variety of products to trade and tailored services to clients. Some platforms may have a versatile range of products, while others may specialize in certain types of assets. For example, Interactive Brokers offers access to trading equity investments, fixed income, forex, etc. MarketAxess specializes in fixed income, so its products and services revolve only around fixed income.
Institutional Trading Platforms in Canada
- Stocks/ETFs
- Options
- Futures
- Spot Currencies
- Bonds
- $0.0005 - $0.0035 /share
- $0.15 - $0.65 /contract
- $0.25 - $0.85 /contract
- 0.08bps - 0.20bps
- 10bps
Interactive Brokers is a multinational trading platform that processes on average 3 million trades daily. It offers trading products and services to retail traders, high-net-worth individuals, and institutional investors. This platform consistently has some of the lowest commissions and spreads on tradeable assets.
- Bonds
- EU: 0.015bps - 3bps
- USD (IG): 0.1bps - 0.5bps
- USD High Yield: 3bps - 6.2bps
- Other: up to 6.25bps
MarketAxess is a trading platform focused on fixed-income instruments. This is a leading electronic trading platform for institutional inventors and dealers worldwide. It also provides fixed-income market data and post-trade services. These services help the users track and record transactions in compliance with applicable laws.
- Stocks/ETFs
- Options
- Futures
- Stocks/ETFs: Up to $0.0035 /share
- Options: Up to $0.50 /contract
- Futures: $1.29 - $1.79 /side
Lightspeed Financial is a brokerage that offers trading platforms designed for professionals and active traders. Their platforms enable users to trade financial assets, including common stocks, preferred stocks, futures contracts, exchange-traded funds, options, mutual funds, and fixed-income investments. It also allows margin trading and provides margin lending.
- Stocks/ETFs
- Options
- Futures
- Bonds
Iress is a technology company that offers various SaaS solutions to financial companies and individuals. They are not as established in the trading space as the other players, but they have offered software products to various financial service businesses in Asia Pacific, United Kingdom & Europe, North America and Africa.
Frequently Asked Questions
How to open institutional trading account?
To open an institutional account with one of the trading platforms, you will have to provide the necessary documents to ensure you are eligible to have an institutional account:
- Tax and contact information of the organization.
- Personal and contact information of the Authorized Person on this account.
- Documents proving the existence of your organization.
- Bank account information.
Once you have the necessary documents to open the account, you can register on the platform of your choice and wait for verification. Similar to how a personal account is set up, you will need to create a username and a password with some security details.
Can retail traders use an institutional trading platform?
No, retail traders cannot use institutional trading platforms, but they do have a good choice of trading platforms. Institutional trading accounts are more difficult to open, and they have more regulations and reporting requirements since institutional traders often manage public funds.
There is no significant downside to restricting retail traders from institutional platforms. Retail trading platforms offer great analytical tools, data and research feeds, and reasonably low commission fees. With a large enough transaction volume, retail traders can even get a good discount on commission fees. Retail traders can also get their hands on leverage with many day-trading platforms offering 10x leverage. Some crypto platforms may offer leverage of up to 100x.
Disclaimer:
- Any analysis or commentary reflects the opinions of WOWA.ca analysts and should not be considered financial advice. Please consult a licensed professional before making any decisions.
- The calculators and content on this page are for general information only. WOWA does not guarantee the accuracy and is not responsible for any consequences of using the calculator.
- Financial institutions and brokerages may compensate us for connecting customers to them through payments for advertisements, clicks, and leads.
- Interest rates are sourced from financial institutions' websites or provided to us directly. Real estate data is sourced from the Canadian Real Estate Association (CREA) and regional boards' websites and documents.