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CloseTradeStation vs. Interactive Brokers
We do a back-to-back comparison of two powerhouses in the online brokerage space: Tradestation and Interactive Brokers.
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Looking for a new broker?
TradeStation and Interactive Brokers are two of the best you can find. Yet they both differ in many ways. Which one can take your trading to the next level?
To figure this out, we need to consider exactly what separates the two: What asset selection does each offer? Who’s cheaper? Which platform is better? Knowing these details could be make or break for you during the era of COVID-19. 📈
It’s no surprise that throughout the coronavirus pandemic, an increasing number of traders have flocked to Interactive Brokers.
In fact, the Connecticut-headquartered brokerage reported its best trading volumes ever in November 2020, even surpassing its previous record set in March (when fears of the impact of the pandemic first began setting in).
With both brokers continuing to dominate the online brokerage industry, knowing the key differences between each will help you make the best decision for you.
Here, we dive into the assets offered by both TradeStation and Interactive Brokers, the platforms’ nuances, and exactly how much you can expect to pay in fees.
Ready to discover more? Let’s jump in! 🚀
FTC Disclosure: This post contains affiliate links and I will be compensated if you make a purchase after clicking through my links.
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TS Select: $2,000
TS GO: $0
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Active options and penny stock trading
Active traders
Powerful tools for professionals
Huge discounts for high-volume trading
50% Off Future
Commissions
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Account minimum
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TS Select: $2,000
TS GO: $0
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Best for
Active options and penny stock trading
Active traders
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Powerful tools for professionals
Huge discounts for high-volume trading
Promotion
50% Off Future
General Overview 🔍
TradeStation focuses on providing top quality trade executions and market data, making them ideal for professional, active traders. This firm also shows a commitment to providing world-class customer service. TradeStation’s systems are robust and have relatively little issues during market surges.
Historically, TradeStation has attracted advanced, affluent, and active traders. The firm has implemented a goal to broaden its audience in 2020/2021 by introducing additional services, like its recent launch of a sustainable investing tool, which we will discuss further down, and price changes.
In 2019 TradeStation showed a commitment to education by acquiring and relaunching YouCanTrade, a firm dedicated to encouraging community and education.
The Florida-based firm also launched a TS GO pricing plan for mobile app and web traders. But the firm didn’t stop there. It went onto launch, TS Select, a pricing plan that offers advanced traders free commissions for web and mobile trading. During its launch, John Bartleman, President of TradeStation Group said:
“Now, with TS SELECT, we are providing a valuable alternative designed for the advanced trader who craves a broader and more sophisticated suite of tools and services to try to gain a financial edge – a pricing plan that offers free commissions if you trade on web or mobile and highly competitive fees when you need to use the powerful TradeStation desktop platform with all of its bells and whistles.”
Bartleman added, “Part of our longstanding commitment to our customers means offering fair, highly competitive pricing…TS SELECT achieves this by giving traders a pricing plan they can tailor to their own trading profile and objectives.”
Now that we’ve given a brief overview of TradeStation, let’s turn our attention to another powerhouse in the online brokerage space, Interactive Brokers. This firm offers a wealth of tools to suit more advanced, sophisticated traders, similar to TradeStation.
This broker puts its attention towards connecting to a wide array of electronic exchanges. IBKR offers clients access to a huge selection of assets including options, equities, and futures globally. Though, Trading 212 did recently blame IBKR for a trade execution delay.
Further, Interactive Brokers offers is a top broker for short selling, offering endless short selling opportunities on a selection of international exchanges. In the fall of 2019, IBKR introduced a Lite pricing plan that offers traders no-commission equity trades on most of its platforms.
Finally, it’s worth noting that Interactive Brokers was selected as Investopedia’s top choice for advanced trading and international trading.
Let’s take a more detailed look at how both of these brokers compare overall.
What is TradeStation? 📘
TradeStation is an online brokerage firm, originally founded under the name Omega Research, inc. in 1982.
Fast Facts
- Account Minimum: $2000 for TS Select; $0 for TS Go
- Fees: Stocks and ETFs are $0; Options are $0.6(TS Select) or $0.5(TS Go)
- Best For: Active options and penny stock trading
- Highlight: One of the best platforms for professionals
Rating
- Usability:7/10
- Research and Education:5/10
- Customer Service & Help:8.5/10
- Commissions & Fees:4/10
- Tools & Resources:9.5/10
- Overall:8/10
Investor Warning: Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors.
The firm is best known for its electronic trading platforms that enable users to create a customized trading experience, and their outstanding technical analysis. In 2011, TradeStation was acquired by the Japanese Monex Group.
When it comes to regulations TradeStation is monitored by the Financial Industry Regulatory Authority (FINRA), and the Securities and Exchange Commission (SEC).
What is Interactive Brokers? 📕
Interactive Brokers (IBKR) is another powerhouse in the online brokerage space. IBKR was founded in 1978 by Thomas Peterff, and has since grown to amass a humble $8.1 billion in equity capital. Today, IBKR’s trading platform has secured its place as a leading broker for active traders.
Its rise to the top was a result of its ability to stay in touch with the needs of traders and transform into a fully-automated e-trading platform. Its quality technology and platform enables traders across the globe to perform a total of about 4 million trades per day.
Fast Facts
- Account Minimum: $0
- Fees: $0.005 per share on the standard platform, $0 on IBKR Lite
- Best for: Active traders
- Highlight: Huge discounts for high-volume trading
Rating
- Usability:6/10
- Customer Service & Help:9.5/10
- Tools & Resources:7.5/10
- Research and Education:8.5/10
- Commissions & Fees:8/10
- Overall:8/10
Investor Warning: The risk of loss in trading with Interactive Brokers, whether it is with stocks, options, futures, forex, foreign equities, and fixed income, can be substantial.
Options involve risk and are not suitable for all investors. For more information read the “Characteristics and Risks of Standardized Options”. For a copy call Interactive Brokers’ Client Services on 312-542-6901. Before trading, clients must read the relevant risk disclosure statements on our Warnings and Disclosures page – http://www.interactivebrokers.com/disclosures. Trading on margin is only for sophisticated investors with high risk tolerance. You may lose more than your initial investment. For additional information regarding margin loan rates, see http://www.interactivebrokers.com/interest. Security futures involve a high degree of risk and are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading security futures, read the Security Futures Risk Disclosure Statement. For a copy, visit http://www.interactivebrokers.com/disclosures. Structured products and fixed income products such as bonds are complex products that are more risky and are not suitable for all investors. Before trading, please read the Risk warning and Disclosure Statement at http://www.interactivebrokers.com/disclosures.
More importantly, what assets do both of these brokers offer? Does one offer more assets, or maybe the asset selection of one is more relevant?
International regulatory monitoring may or may not be relevant to your own forex trading requirements at this time, but it is worthy to note anyway.
Interactive Brokers is regulated by several international agencies like:
- ☑️ United States: National Futures Association (NFA) and Commodities Futures Trading Commission (CFTC)
- ☑️ Canada: Investment Industry Regulatory Organization of Canada (IIROC)
- ☑️ United Kingdom: Financial Conduct Authority (FCA)
- ☑️ Europe: Commission de Surveillance du Secteur Financier (CSSF).
- ☑️ Japan: Kento Local Finance Bureau
- ☑️ India: Securities and Exchange Board of India (SEBI)
- ☑️ Hong Kong: Hong Kong Securities and Futures Commission (SFC)
- ☑️ Australia: Australian Securities and Investments Commission (ASIC)
Investment Selection Compared 📜
Both TradeStation and Interactive Brokers offer a huge range of financial assets. Here’s a breakdown and comparison of each:
| Asset | Tradestation | Interactive Brokers |
|---|---|---|
| Short Sales | Yes | Yes |
| Mutual Funds | With broker assistance | 25,000 Low/no cost |
| Bonds | With broker assistance | Yes, huge inventory |
| Futures/Commodities | Yes | Yes |
| Put Options | Yes | Yes |
| Complex Options | Yes | Yes |
| Robo Advisory | No | Yes |
| Cryptocurrency | No | No |
| International exchanges | No | 125 Exchanges |
| Forex | No | 115 Pairs |
| Fractional Shares | No | Yes |
| OTCBB and Penny Stocks | Yes | Yes |
TradeStation offers a vast selection of investment types on its platform. This includes stocks, penny stocks, stock futures, mutual funds, options, and bonds. Users can trade stocks, ETFs and certain options for no commission fees.
Interactive Brokers offers a similarly impressive selection, including almost all tradable assets a trader will need to cover various portfolio assets. A key difference between IBKR’s offering is that it is also a leading broker in the forex space.
Who Offers Better Stock Trading? 🤔
Interactive Brokers
Interactive Brokers offers traders a strong selection of stocks, earning its place in our top stock brokers review. Here’s a look at its stock offering.
| Tiered Commission (Monthly volume in shares) | Commission (stocks, warrants, ETFs, ETPs) | Min. commission per order | Max. commission per order |
|---|---|---|---|
| 300,000 or less | $0.0035 | $0.35 | 1% of the trade |
| 300,001 to 3,000,000 | $0.002 | $0.35 | 1% of the trade |
| 3,000,001 to 20,000,000 | $0.0015 | $0.35 | 1% of the trade |
| 20,000,001 to 100,000,000 | $0.001 | $0.35 | 1% of the trade |
| More than 100,000,000 | $0.0005 | $0.35 | 1% of the trade |
In addition, Interactive Brokers recently added IBKR Lite to its offering. This is a commission-free trading experience applicable to all US exchange listed stocks and ETFs, suitable for less active traders. With IBKR Lite you will gain access to global markets at a low cost, and you won’t be hit with any inactivity fees, or account minimums.
TradeStation
TradeStation offers clients flexible pricing. Here’s a closer look on its stocks, ETFs and options:
| Trading Asset | Per trade | Per contract (small volume) | Per contract (high volume) |
|---|---|---|---|
| Stocks | $5 per trade | $0.01 per share | As low as $0.002 per share |
| ETFs | $5 per trade | $0.01 per share | As low as $0.002 per share |
Penny stocks
TradeStation also offers penny stock trades under TS Select and TS Go for $0 for the first 10,000 shares, and $0.005 per share thereafter (as well as an additional $0.005 per share if you direct the order to a specific venue).
Options Trading Compared ⚖
Both Interactive Brokers and TradeStation offer a selection of options, and both feature in our leading brokers for options trading review.
TradeStation
TradeStation’s options come with flexible pricing, similarly to its stocks and ETFs.
| Per trade | Per contract (small volume) | Per contract (high volume) |
|---|---|---|
| $5 + $0.50 | $1 per contract | N/A |
Interactive Brokers
| Volume per month | Commission per contract | Min per order |
|---|---|---|
| Equal or less than 10,000 | ||
| Less than $0.05 premium | $0.25 | $1 |
| Equal or more than $0.05 premium | $0.50 | $1 |
| Less than $0.1 premium | $0.70 | $1 |
| 10,001 – 50,000 | ||
| Less than $0.05 premium | $0.25 | $1 |
| Equal or more than $0.05 premium | $0.50 | $1 |
| 50,001 – 100,000 | ||
| All premiums | $0.25 | $1 |
| Equal or more than 100,001 | ||
| All premiums | $0.15 | $1 |
💡 Helpful tip: Options trading is very risky. Better getting your feet wet, ensure you understand what options trading is all about: the pros and cons, fees, and everything else that comes with it—to give you the best chance of success.
Futures Trading ⏲
Both Interactive Brokers and TradeStation offer access to the futures market. If you’re looking to trade futures, check out some of our expert tips on how to start trading futures, including a real life example to see how much you could potentially earn.
Interactive Brokers
IBKR offers a fixed commission from $0.15 per contract.
| Per contract, per side | $0.25 | $0.45 | $0.65 | $1 | $1.20 |
|---|---|---|---|---|---|
| Monthly contracts | More than 20,000 | 10,001 to 20,000 | 1,001 to 10,000 | 301 to 1,000 | Less than 300 |
TradeStation
TradeStation charges $1.5 per contract per side, and offers a tiered plan.
| Per contract, per side | $0.25 | $0.45 | $0.65 | $1 | $1.20 |
|---|---|---|---|---|---|
| Monthly contracts | More than 20,000 | 10,001 to 20,000 | 1,001 to 10,000 | 301 to 1,000 | Less than 300 |
IBKR and TradeStation: Forex 💱
As mentioned, Interactive Brokers offers forex, where TradeStation does not. If you hone your forex trading strategy, you could set yourself up to reap some big returns. Although Interactive Brokers does not publish its spreads, it offers low fees – particularly for high volume traders.
IBKR customers will gain access to prices that aggregate from 17 global banks dealing in the forex market. While you won’t need to worry about spreads, IBKR does charge a commission in the region of $16 to $40 million round turn. Here are some stats on the firm’s forex offering.
| Amount trader per month | Commission x Trade Value | Min per order |
|---|---|---|
| Equal or less than $1,000,000,000 | 0.2 basis point | $2 |
| $1,000,000,001 – 2,000,000,000 | 0.15 basis point | $1.50 |
| $2,000,000,0001 – 5,000,000,000 | 0.1 basis point | $1.25 |
| More than $5,000,000,000 | 0.08 basis point | $1 |
Fees & Commissions: Who’s Cheaper? 💰
Both TradeStation and Interactive Brokers have strong reputations with active traders, offering a mixture of pricing plans created to appeal to a wide range of customers. As we mentioned earlier, both also launched zero-commission plans in 2019, with some limits.
During the zero commission storm in 2019, TradeStation brought two new pricing plans to the fore. Both feature commission-free equity trades and options transactions with no per-leg fee.
The firm’s other plans consist of per-share or per-contract fees that are tiered depending on how active a trader is in each asset class, which are also quite complex. If you are an active trader, TradeStation’s pricing page offers more detail.
Interactive Brokers offers three different commissions when trading U.S. equities:
- A fixed per-share pricing of $0.005 (a half a cent) per share traded with a minimum of $1 and a maximum of 1% of the trade value. This includes all exchange and most regulatory fees.
- A tiered per-share pricing based on monthly order activity starting from a minimum of $0.35 per trade, and reaching $0.035 per share for under 300,000 shares per month to $0.0005 per share for more than 100,000,000 shares per month. This is excluding regulatory and exchange fees.
- The third option is IBKR Lite. This offers traders zero commission trades for U.S. listed equities. With this, trades are routed to generate funds for order flow, which is not shared with the trader. The two brokers generate interest income
Trading Platforms 🖥
TradeStation’s trading experience includes a desktop, web browsers, and mobile devices for traders no matter where you’re situated.
- ☑️ TradeStation 10 offers a customizable workflow to meet different traders’ preferences, but as a whole, the process is easy to follow from research to trading.
- ☑️ The watchlists are customizable too, and brimming with interesting and helpful data on top of links to order tickets.
- ☑️ Each platform allows bracket orders and conditional orders, while the desktop platform offers a few extra, more sophisticated order types.
- ☑️ TradeStation’s mobile app isn’t the most impressive, but it’s functional none-the-less. The app connects your account and lets you monitor and manage trades in real-time, in addition to all the basic functions like placing, modifying, and closing orders.
Interactive Brokers offers a web-based, desktop, and mobile trading platform, too.
- ☑️ The IBKR desktop platforms Trader Workstation (TWS), which attracts professional traders who are familiar with advanced features.
- ☑️ The web-based platform of Interactive Brokers offers a simpler experience suitable for less-experienced traders. It allows users to utilize standard technical elements like screeners and flexible charts.
- ☑️ Those looking to do some trading on the go should note that the mobile platform is intentionally a little more basic. This is because the screen is smaller, making it impossible to incorporate multiple resources.
Research Tools: Endless Possibilities 🕵️♂️
Both Interactive Brokers and TradeStation offer an extensive selection of research possibilities, including accepting third party providers.
TradeStation began its brokerage firm on top of a high-quality technical analysis and charting platform, which are reflected in its features. For example, traders can increase their research potential through the firm’s automated technical analysis that displays technical patterns on the charts as they form. 📊
Hot Lists and RadarScreen enable traders to perform specific screen capabilities for ETFs and stocks, and The OptionsStation Pro toolset lets traders create, analyze, and monitor almost any options strategy your mind can muster. The PTools are aimed towards assisting active traders with things like market depth, time and sales, and snapshots that give an insight into how well or badly your positions are doing.
Interactive Brokers display of in-depth research tools on its Client Portal and mobile apps will help research enthusiasts fulfill their needs. TWS pushes things to the next level and incorporates international trading, real-time scans and data. The market scanner will catch any serious traders eye with its offering of hundreds of criteria for global equities and options. 🌎
The Fundamentals Explorer cuts into the depths of hundreds of data points and includes analyst ratings from TipRanks. The Options Strategy Lab allows eager traders to keep an eye out for spreads that meet their market outlook. Bonds scanners and mutual fund scanners are also an integral part of the software.
Lastly, all platforms offer the ability to extensively customize your charts including hundreds of real-time data streaming and indicators.
Knowledge Center (IBKR) vs. Traders Academy (TS) 📚
TradeStation offers a few courses and market briefings on its platform. The Knowledge Center isn’t the easiest to navigate though, and articles can take time to find. The firm’s frequently asked questions page is driven by the TradeStation chatbot, called TSbot.
TradeStation directs clients from the Learn page to a YouCanTrade website where a plethora of relevant and educational material sits. Here, users will find themselves immersed in material about investments and trading to help you up your investing game.
If in doubt about TradeStation’s platforms, a range of courses focusing on how to use the TradeStation platforms can be accessed free of charge; with others, you will need to pay a subscription fee.
Interactive Brokers offers traders the opportunity to take their trading knowledge to the next level, absolutely free of charge. The Traders Academy has a clean structure, and helps investors, financial professionals, educators, and students better understand the inner workings of the markets, assets classes, research tools, and functions.
Quizzes and tests benchmark your progress, while allowing you to go at your own pace at the same time. A trading glossary and an FAQs page also have their place on the website. 💹
Additionally, IBKR offers daily webinars traders can tune into, covering a selection of topics on everything from options education, how-to utilize the platform and tools to your benefit, trading internationally, among others.
A demo version of Traders Workstation can be downloaded to give you an idea of the intricacies, along with allowing you some time to learn how to place more advanced trades.
Final Summary 🏁
Both TradeStation and Interactive Brokers have put some hefty investments into appealing to active, professional and high net worth investors. Neither particularly work to appeal to beginner investors, however.
TradeStation targets mainstream investors, but its platform is clearly focused on assisting more technically-minded investors. The screeners or technical tools designed for active traders are all positioned close to the top of the class. Its technical research and quality trade executions lead many to conclude this broker is ideal for active, professional traders.
Interactive Brokers has put time and sweat into making sure its technology appeals and helps the mass looking to trade. That said, it offers a huge array of tools that may intimidate and distract some newer investors. For the more active, advanced trader that benefits from extensive customizations and capabilities, this could be a dream set up.
Active traders will enjoy the web of global asset classes, order types, and algorithms that IBKR offer. If you feel like you’ve outgrown your current broker and are ready to step your game up a notch, Interactive Brokers might just be perfectly positioned for you.
TradeStation vs. Interactive Brokers: FAQs
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Can I Use TradeStation Software with Interactive Brokers?
TradeStation Global is a combined product offered by TradeStation and Interactive Brokers (UK). Traders can use either Interactive Brokers or TradeStation’s own desktop platform. The difference is that TradeStation Global charges its own fees, and has its own customer support and educational tools.
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Is TradeStation’s Software Better than Interactive Brokers?
Based on our extensive research, Interactive Brokers software is better than TradeStation's. Traditionally known for its world class platforms, fees for professionals, and tools, Interactive Brokers has continued to progress over the years, and today, thanks to its $0 commission fees on trades, IBKR Lite, and Client portal web platform, IBKR appeals to casual investors too.
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Is TradeStation or Interactive Brokers Better for Day Trading?
It depends on what you’re looking for, really. If you want to trade commission free ETFs, Interactive Brokers are for you. Active traders will appreciate TradeStation's fees which are relatively better than Interactive Brokers. Experienced professionals will be more suited to Interactive Brokers. Both brokers have earned a place in our top day trading platforms.
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Did Interactive Brokers Buy TradeStation?
No, Interactive Brokers did not buy TradeStation. In 2018, IBKR (UK) partnered with TradeStation to offer TradeStation Global, a new trading product that combines capabilities of TradeStation's platform and IBKR’s broker account. The account gives traders in the UK access to TradeStation premium features, including RadarScreen market monitoring and ranking tool, and its Charting package.
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Who’s Cheaper: Interactive Brokers or TradeStation?
Interactive Brokers and TradeStation both charge zero-commission fees for stocks trades. Options trades have the same $0 commission fee in place with both brokers. A fee of $0.65 is then charged per option contract at Interactive Brokers, and a fee of $0.50 at TradeStation.
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How is COVID-19 Affecting IBKR and TradeStation?
How have both of these powerhouses panned out throughout the pandemic? Interactive Brokers recently reported its best trading volumes ever. It even surpassed its previous record which was set as recently as March when fears over the impact that COVID-19 would have first began, ultimately triggering a boom in retail investing.
In November, the firm saw 2.29 million daily average revenue trades or DARTS. This is a rise of 30% in comparison to the month prior, and an increase of almost three times the amount of 2019.
In April of this year, the U.S. based brokerage led the way by pledging $5 million towards supporting relief efforts against the coronavirus pandemic, including funding medical research and development, and food assistance.
Though TradeStation didn’t pledge as much to battle the coronavirus, the firm is keeping up with clients' demands.
Comparison Corner
Find out how TradeStation and Interactive Brokers stack up against other competition.
All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist.com. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.
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