What you actually own when you buy through Interactive Brokers
A price comparison stops at the commission. This page starts after it: whether the trade leaves you holding a security or a contract, whose name that security is registered in, and what the document Interactive Brokers Ireland Limited (Ireland, Central Bank of Ireland C423427) publishes says becomes of it if the firm fails.
Which entity and which product this covers
Applies to Interactive Brokers Ireland Limited, under the client agreement dated 24 April 2024 quoted below. The same agreement grants IBIE a right of use over client financial instruments for securities financing, on its own account or for the account of another person. Interactive Brokers LLC (US) and Interactive Brokers U.K. Limited are separate entities with their own agreements and their own custody terms; which entity onboards a reader resident outside the EEA is not answered by this document.
Do you own real shares when you buy through Interactive Brokers?
A real security — but not one registered in your name. Interactive Brokers Ireland Limited (Ireland, Central Bank of Ireland C423427) holds client investments through a nominee or custodian, pooled in an omnibus account together with other clients. You are the beneficial owner: the shares are yours rather than the firm's, but they are not separately identifiable as yours in the register.
“IBIE may register your Client Assets in the name of an eligible nominee, and in such circumstances, the Client Assets will not be registered in your name. (v) Client assets may be held in an omnibus account with a third party.”
What happens to your holdings if Interactive Brokers fails?
Here is what Interactive Brokers Ireland Limited (Ireland, Central Bank of Ireland C423427) says in its own document, in its own words — including the part that qualifies it.
“In order to show that Client Assets are not available to IBIE creditors, IBIE will ensure that its records show that Client Assets are held for Clients and that they do not belong to IBIE, sub-custodians or any other customers of IBIE.”
The counterweight in the same document
“Where IBIE holds Client Assets in bank account(s) or with other third parties, such Client Assets may be pooled. This means that in the event of IBIE's failure you do not have a claim against a specific sum or securities held in a specific account, and your claim may only be for a share of the total Client Assets held in that pool.”
Does Interactive Brokers sell CFDs on shares, and what changes if it does?
Alongside real shares, Interactive Brokers also sells contracts for difference on equities. That is a different product with a different answer: no underlying instrument changes hands on either side, and the position is an agreement with Interactive Brokers Ireland Limited (Ireland, Central Bank of Ireland C423427) rather than something you hold.
“CFDs are contracts with IBIE as your counterparty, and are not traded on a regulated exchange and are not cleared or settled on a central clearing house. With respect to CFDs in shares, no CFD transaction shall confer on you any right, voting right, title or interest in any underlying product.”
Can a loss at Interactive Brokers follow you past your balance?
Yes. Interactive Brokers Ireland Limited (Ireland, Central Bank of Ireland C423427) does not provide negative balance protection, so a gap through your stop can leave you owing the broker money. One qualification: IBIE does publish negative balance protection, but its Customer Agreement grants it only to CFD positions and only to clients classified as retail — the document states in capitals that a client not classified as retail is not eligible for it. Margin lending against real securities is not covered.
Verified 2026-09-08 · Source document
Frequently asked questions
Do you own real shares when you buy through Interactive Brokers?
What happens to your holdings if Interactive Brokers fails?
Does Interactive Brokers sell CFDs on shares, and what changes if it does?
Can a loss at Interactive Brokers follow you past your balance?
How we verified this review
Every fact below is verified against primary sources. We refresh on a schedule and on reader feedback.