TradeStation vs. Interactive Brokers

If you are looking for a reliable brokerage with decades of experience under its belt, TradeStation and Interactive Brokers have you covered. Both leading platforms have unique features but share many similarities as well. They cater to hands-on investors who want advanced tools to match. However, they are also distinct in the services they provide. If you are interested in either brokerage, here’s what you need to know to find the one that fits. Remember: A financial advisor can help you navigate the world of investment and work with you towards personal financial goals.

Overview of TradeStation vs. Interactive Brokers

TradeStation and Interactive Brokers are two online brokerage services that target similar user bases. So far, they have supported advanced investors who want a wide range of trading products and in-depth analysis tools. Although both are starting to look for ways to draw in retail traders, they are still in the early stages.

Since both are designed for experienced investors, their trading platforms have a learning curve. While they are extensive, they can intimidate novice traders. Neither platform comes without specific fees, either. So, they are two similar platforms competing in the same area. While one may have a widget or choice the other does not; the overall experience depends on the user.

TradeStation vs. Interactive Brokers: Fees

Previously, online brokers had standard trading and commission fees. Now, however, a trend has built up to change that. Both services have jumped on the bandwagon and advertise attractive $0 commissions, with some limitations. So, investors can trade stocks and exchange-traded funds (ETF) without any extra charges. Other than that, the two brokers do charge varying rates for different products and fees.

TradeStation offers free trading as well as access to free real-time market data. There are no minimum deposit requirements, but there is a fee between $.50 and $1.50 per contract for options and futures. While stocks are free to trade, although a $0.005 per share commission is charged on trades involving exchange-traded equities executed at or above $1 per share.

Interactive Brokers has different pricing plans that include tiered and fixed rates. The tiered pricing depends on the volume, exchange, regulatory and clearing fees associated with the trade. In contrast, the fixed price is a low rate commission and is calculated based on the type of trade. For example, the fixed price for options rate comes per contract and includes all commissions and applicable fees.

IBKR Lite is the alternative account type, and it targets retail investors. One of its draws is that it offers zero-commission trading. However, it cuts off access to the Trader Workstation, which has valuable trading tools. There is no minimum account balance for IBKR Lite or Pro. While there is no maintenance fee for either option, you pay commissions on stock and ETF trades using the IBKR Pro option, with fees ranging from $0.0005 to $0.0035 per share.

Meanwhile, commissions on options transactions range from $0.15 to $0.65 per contract. Commissions on bond transactions range from 0.0001% (for Treasuries worth more than $1 million) to 0.1% (for the face value of a corporate bond worth up to $10,000). While some mutual funds have no fees, Interactive Brokers charges $14.95 per transaction or 3% of the trade value, whichever is less.

IBKR offers a simulated trading account to clients called a paper trading account. Paper trading lets you use the full range of trading facilities in a simulated environment using real market conditions.

TradeStation vs. Interactive Brokers: Services & Features

Interactive Brokers allows users to trade a wide variety of assets including, equities, ETFs, futures, bonds, foreign currency, metals, mutual funds, options and cryptocurrencies. In particular, Interactive Brokers accommodates access to foreign markets. The Traders Workstation includes international trading data, and the market scanner offers information on global equities and options. So, you can trade assets in the U.S. as well as over 150 markets worldwide. TradeStation does not offer foreign exchange. Instead, it focuses on standard asset classes and IPOs. The platform also offers retirement accounts and joint accounts, in addition to standard brokerage accounts.

Both platforms focus on in-depth market analysis tools. They carry various widgets and customizable features that keep the two platforms competitive. The main difference between them is that TradeStation doesn’t really offer fundamental analysis.

The two also offer their own education services. TradeStation offers courses and free webinars, while Interactive Brokers has IBKR Campus, which also includes courses, a blog for quantitative professionals and other resources.

Overall, TradeStation and Interactive Brokers are relatively dense services. They are currently trying to open themselves up to a retail clientele with the IBKR Lite and TS Select. However, they are still pretty dense. Their range of features might be appealing to advanced investors. In particular, those who want to take advantage of market analysis tools will like the services these two brokerages have to offer.

TradeStation vs. Interactive Brokers: Online & Mobile Experience

TradeStation and Interactive Brokers offer the same range of platforms for their users to try: desktop, web and mobile. TradeStation, in particular, encourages cross-platform use, advertising real-time account synchronization between the TradeStation Trading App and its web trading system. The app allows you to invest in the same range of products, from stocks to cryptocurrency and includes an array of the broker’s core features like Hot Lists, Quotes and the Matrix. TradeStation’s desktop platform is the most comprehensive of the three that TradeStation offer.

Meanwhile, consistent and professional traders will benefit from Interactive Brokers’ mobile system. The app is one of the most robust mobile trading platforms out there with a list of helpful features. It makes it possible to do more than monitor current trades and access the same trading network available on all its interfaces. This is different from most trading companies who have varied lists across their products. However, like TradeStation, Interactive Broker’s key focus is its desktop version.

The call Trader Workstation (TWS) is a highly customizable platform that fits investors’ needs. You can choose which information you want to prioritize, whether its assets or data. The latter has comprehensive analysis on stocks and options as well as technical charts and newsfeeds – to name a few. So, with all these features and products to trade, Interactive Broker users can tailor their investment experience.

Who Should Use TradeStation?

Active traders with experience under their belts are suited for TradeStation. They can handle the customizations and many tools the platform offers. It offers more products to trade in then some other platforms, making it appealing. If you feel like TradeStation is the right option for you, you should be careful about which interface you use.

Who Should Use Interactive Brokers?

Interactive Brokers is also useful for advanced traders. It offers an even more complicated desktop system that is hard to beat if you know how to use it. The many features and analysis options can help a trader keep up with every trend and market.

Those who are interested in foreign currency will also benefit from using Interactive Brokers. Since TradeStation does not support it, this is the only option between the two. However, the system’s data on multiple markets will make this a suitable platform for it.

Bottom Line

Regardless of the platform you use, both Interactive Brokers and TradeStation are suitable for most active investors. While beginners might have trouble navigating the two platform’s interfaces, the ability to customize your experience can help. Overall, the market analysis tools and trading options the two online brokerage services offer have an understandable appeal. The right one for you depends on the type of fees you are willing to pay, the type of account you want and feature preference.

Tips for Investing

Using either likely means you have some experience in investing. However, you can always benefit from a financial advisor to discuss your investment strategy with you and help you sharpen your skills. If you don’t have a financial advisor yet, finding one doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Whether you’re considering getting started with investing or highly experienced, an investment calculator can help you figure out how to meet your goals. It can show you how your initial investment, frequency of contributions and risk tolerance can all affect how your money grows.
Comparing two brokerages can help you pick the right service for you. However, it’s important to research thoroughly before you choose. We analyze TradeStation and Interactive Brokers in detail without our dedicated brokerage reviews.