Paper trading accounts are simulated trading environments offered by Interactive Brokers (IBKR) that allow users to practice trading using real market conditions without risking real money. These accounts mirror the features, trading permissions, market data subscriptions, base currency, and account type configurations of regular IBKR accounts, making them an excellent tool for learning the platform and experimenting with new features (IBKR Traders´Academy, s.f.).
All paper trading accounts start with a simulated balance of USD 1,000,000 in Equity with Loan Value. This balance fluctuates based on the performance of simulated trades as if they were executed in the real market (IBKR Traders´Academy, s.f.). For advisors, a separate username and password are provided for accessing the paper trading account.
To set up a paper trading account, advisors can access the Advisor Portal, navigate to Account Settings, and then select the Paper Trading Account configure icon. They will need to create a username and password specifically for the paper account. Once submitted, the request is typically processed by the next business day if received before 4:00 PM Eastern Time on a normal business day (IBKR Traders´Academy, s.f.). It’s important to note that while paper trading accounts provide a realistic simulation, orders submitted through these accounts do not actually execute on any exchange or settle at a clearing house. This allows users to gain trading experience and test strategies without financial risk.