Paper Trading vs Live Trading – What’s the Difference?

Paper trading is realistic, flexible, and financially risk-free, but it’s not exactly the same as live trading. So, what differences can you expect?

As we’ve mentioned, an IBKR paper trading account is an excellent training ground for new and experienced traders alike, where you can practice learning new tools, strategies, and more, in real-world market conditions, but in a safe, simulated trading environment; this means trades won’t actually execute on any exchange or settle at a clearing house.

You also won’t have access to IPOs, and certain corporate actions like dividends and splits won’t be processed.

Remember, in the paper trading environment, price movement and margin behavior are modeled realistically, and though it might seem identical to real-world execution, no actual gains or losses will occur in your live, funded account.

Take advantage of the benefits offered by an IBKR paper trading account. Use it to test, explore, and enhance your skills, so you can be better equipped and more adept when executing live trades in our platforms.

Reference List: Paper Trading Limitations

Although a paper trading account simulates most aspects of a production account, you may encounter some differences due to its construction as a simulator with no execution or clearing abilities. These differences include but are not limited to:

• No support for some order types including: VWAP, Auction, RFQ, and Pegged to Market.
• Fills are simulated from the top of the book; no deep book access.
• Limited combo trading.
• Stops and other complex order types are always simulated in paper trading; this may result in slightly different behavior from a production account.
• Penny trading for US Options is not supported. You will be able to submit the order but it will not receive a penny fill.
• The trade simulator will reject the remainder of any exchange-directed market order that partially executes. This may or may not match behavior of a real-world exchange. Market orders received while there is no quote on the opposite side will be held until the market data arrives (i.e. until the first partial fill).
• Mutual Fund trading is not supported in a Paper Trader Account.

Learn More

Traders’ Academy

Traders’ Academy (US Campus) (EU Campus)

New IBKR Institutional Account: Requesting a Paper Trading Account

Getting Started for Financial Advisors: Signing-up for a Paper Trading Account

How to Open an Account, Deposit, and Withdraw Funds

IBKR Guides

Paper Trading Account

IBKR Website

Start a Free Trial

Guide to Choosing the Right Account

What You Need for the Application