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 has two account types called TradeStation Go (TS GO) and TradeStation Select (TS SELECT). TradeStation Go is primarily suited for web and mobile app interfaces. On those platforms, you have 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. If you want to trade using the desktop version, an additional $10 fee is added to each equity and options trade and a $1.40 surcharge per contract for futures.
On the other hand, TradeStation Select does not apply surcharges on mobile, web or desktop. Stocks and ETFs are still free to trade, although options contracts can range between $.60 and $1.50. There is a minimum balance of $2,000.
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. IBKR Lite also lacks a maintenance fee. In contrast, the Pro account can include a maintenance fee up to $10 per month based on activity. Compared to TradeStation’s $50 inactivity fee, this is significantly cheaper.
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 includes equities, ETFs, futures, bonds, foreign currency and options among its asset classes. 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 100 markets worldwide. TradeStation does not offer foreign exchange. Instead, it focuses on a standard asset class and also crypto and IPOs.
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 has an affiliate called YouCanTrade that includes courses and free webinars. 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 GO accounts. 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. It’s free to use and trade through for TS SELECT customers, while TradeStation Go requires additional charges to use the same software. Since the desktop version comes with the most sophisticated trading system, those costs can add up for a TS Go customer who wants to take advantage of the available tools. Still, the app, web trading and desktop offer a sophisticated a customizable investment experience.
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. If you have the TS GO account, you’re better off using the TradeStation mobile app. That way, you can avoid the surcharges that come with trading. If you have the TS SELECT account, you should take advantage of the desktop version since it’s the most comprehensive of the three. Although, this recommendation may vary depending on the type of trader you are and the experience you want.
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.
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 professional advice. A financial advisor can discuss your investment strategy with you and help you sharpen your skills. You don’t have to look far to find one. In just minutes, SmartAsset’s free tool matches you with a professional in your area. If you’re ready for support in achieving 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.
Photo credit: ©iStock.com/stockfour, ©iStock.com/katleho Seisa, ©iStock.com/shisheng ling
Ashley Kilroy Ashley Chorpenning is an experienced financial writer currently serving as an investment and insurance expert at SmartAsset. In addition to being a contributing writer at SmartAsset, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.
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