Interactive Brokers vs. tastytrade

Interactive Brokers offers a comprehensive platform with low costs, while tastytrade focuses on simplified options trading.

Online trading platforms have changed the brokerage business. Mobile apps give millions of consumer investors access to commodities and stock trades. Each one has different options, capabilities and areas of focus.

Two of the more popular trading platforms are compared in this post: Interactive Brokers vs. tastytrade (formerly tastyworks). Both offer convenient and easy trading but concentrate on different types of investing.

Interactive Brokers vs. tastytrade

Who is Interactive Brokers?

Interactive Brokers (IB) is an online brokerage firm preferred by many experienced investors. It offers a complete set of services and products, including its advanced trading platform. Investors are especially drawn to Interactive Brokers’ account services, research tools and educational resources.

Who is tastytrade (Formerly tastyworks)?

The newly named broker tastytrade is an online brokerage firm that focuses on options trades. Its features mirror other online investing resources, including mobile and desktop apps, educational and research tools and tutorials. However, tastytrade’s area of focus makes it attractive to options traders.

Interactive Brokers vs. tastytrade: Comparison

Investors often look for online trading platforms that fit their strategies and goals. Two popular options are Interactive Brokers and Tastytrade. Interactive Brokers is known for its powerful trading tools, broad market access, and low fees. It appeals to experienced investors. Tastytrade focuses on options trading. It offers engaging educational content and a user-friendly interface, attracting beginners. This comparison will explore the pros and cons of both platforms. Key areas of focus include fees, trade execution, customer service, and available resources. This will help traders choose where to invest their time and money.

Pricing and Fees

Interactive Brokers offers a broader range of services with different commission setups. For example, trading stocks or exchange-traded funds (ETFs) incurs a commission of $0.005 per share, with a $1 minimum fee and a maximum of 0.5% of total trade value. Options trading costs $0.70 per contract with a $1 minimum fee. Volume discounts are available for stock and options trading only.

Investors who use the tastytrade platform must focus on stock and futures options trading. Stock options cost $1 per contract, and future options charge $2.50 per contract. Once the options are converted to shares, there’s a $5 flat fee to open stocks and a fee of $1.25 per contract to open futures. 

Closing out on futures costs $1.25 per contract. Users incur monthly inactivity charges for low-level, low-volume accounts.

Winner: Both platforms charge reasonable fees, but Interactive Brokers charges slightly lower fees for options trading.

Usability

Interactive Brokers and tastytrade were designed to fit the needs of experienced traders. Both provide desktop and mobile trading tools.

Interactive Brokers’ desktop app, Trader Workstation, is built for professional traders. It’s powerful but is so intensive and feature-heavy that it will likely intimidate beginning, novice and even some sophisticated investors. IB offers a different app, WebTrader, for less experienced traders.

The tastytrade desktop platform is more or less a requirement for those who use the service. It’s a self-contained, complete trading terminal with a user-friendly interface and fast execution on orders. There’s also a browser version with similar features, but it’s markedly slower with order execution. Rich features and visualization abilities characterize tastytrade’s mobile app.

Winner: Both brokerages cater to experienced traders. Based on its more streamlined look and feel, tastytrade earns a slight nod.

Education

To use either platform’s brokerage services, investors need to be well-seasoned traders. Options trading, in general, is only recommended to the most experienced investors in the marketplace. However, Interactive Brokers and tastytrade have educational modules for investors to learn about trading. 

Both services provide articles, video tutorials and webinars with qualified educators and market professionals. Interactive Brokers hosts an organized education center on a wide range of topics for both new and experienced traders. tastytrade, true to its business focus, primarily offers education on options trading.

IB also allows for paper trading accounts, which let traders simulate and practice transactions without real money. While tastytrade has a trade simulator, it doesn’t support paper trading.

Winner: Offering a wider range of educational subjects and paper trading earns Interactive Brokers the advantage.

Customer Support

Interactive Brokers and tastytrade offer customer support via chat, email and telephone. Neither company has brick-and-mortar branches to visit live.

There’s one notable distinction between the two platforms in terms of customer service: live support availability. Interactive Brokers offers live chat and phone service 24 hours a day, Monday through Friday. It provides live support after and before business hours when forex and after-hours exchanges are open. 

Live support on tastytrade is only available during domestic stock exchange business hours, so traders have no after-hours options for live chats or phone calls.

Winner: Thanks to its greater access to live interactions, Interactive Brokers wins in customer support.

Offering

Interactive Brokers allows investors exposure to an extensive range of investment vehicles. They include stocks, futures, options, ETFs, mutual funds, penny stocks, currencies and cryptocurrencies. IB works with exchanges all over the globe for over-the-counter (OTC) trading.

With tastytrade, traders can invest in stocks and options listed on the U.S. exchange. Its offers do not include forex, mutual funds or penny stocks. Until late 2022, tastytrade did not offer access to cryptocurrency, but its new tastycrypto brand allows users access to digital wallets and crypto assets.

Winner: Investors focused on options trading may find tastytrade to their liking, but Interactive Brokers has a wider range of offerings.

Mobile App

Interactive Brokers and tastytrade have mobile apps available for Android and iOS smartphone users. For what it’s worth, Interactive Brokers used to have an app for Windows phones as well. tastytrade did not.

The IB mobile app closely replicates its desktop cousin, which means it’s extraordinarily complex. However, it’s easy to navigate through various offerings, contract searches and visualizations. It should be noted, though, that Interactive Brokers only allows for three spreads.

The tastytrade app, on the other hand, is more streamlined and optimized than the desktop version. While it’s still designed for expert traders, its interface and visualizations are a bit easier on the eyes. Most importantly, the tastytrade mobile app allows users to use up to nine spreads.

Winner: Ease of usability and interface are the most important aspects of mobile apps, so tastytrade is the winner in this category.

Account Types

Interactive Brokers and tastytrade have multiple account options and structures to offer traders. IB allows for single and joint accounts, including trusts, IRAs, corporations, partnerships, limited liability companies and unincorporated businesses. IB also offers margin accounts in all countries.

The account types tastytrade offers largely duplicate those from IB. Its margin account offerings break down to “Limited,” “Basic” and “The Works.” Only investors in the latter platform are allowed access to futures trading, and tastytrade maintains stringent requirements for investors who want to trade at that advanced and risky level.

Winner: Account structures between the two are very similar and typical of most online brokerages. This category is a tie.

Interactive Brokers vs. tastytrade: Similarities

When comparing Interactive Brokers and Tastytrade, it’s important to note their similarities. Both platforms are designed for active traders. They provide strong trading tools and resources to improve the trading experience. Users can trade various assets like stocks, options, and futures, which helps with portfolio diversification. Interactive Brokers and Tastytrade also offer competitive commission structures, appealing to cost-conscious traders. Each platform provides educational resources to help users make informed decisions. Additionally, they focus on advanced trading technology to allow efficient trade execution and market opportunities. These similarities can help traders choose the best platform for their strategies and goals.

Low-Cost Trading

Interactive Brokers and Tastytrade are both well-known for low-cost trading. Interactive Brokers uses a tiered pricing model. This means commission fees go down as trading volume increases. Frequent traders can save a lot on each transaction. This model supports various types of traders, from casual investors to high-frequency firms.Tastytrade has a different approach. They offer commission-free trading for stocks and options. This removes traditional per-trade fees and simplifies costs. Tastytrade makes money through market-making revenue. This keeps pricing clear and predictable. It’s a good choice for beginners and anyone who likes simple expense tracking.

Advanced Trading Tools

Both platforms provide advanced trading tools for experienced traders. Interactive Brokers’ Trader Workstation ( TWS) is powerful and feature-rich. It offers advanced charting tools, real-time market data, and customizable algorithms. TWS also has risk management tools that allow traders to set alerts and monitor positions closely. It accommodates different trading styles and preferences.In contrast, Tastytrade focuses on options trading. It provides analytical tools like probability analysis, risk graphs, and scenario planning. This focus helps traders visualize outcomes and optimize strategies based on market conditions. It enhances their understanding of risk and reward.

Wide Range of Investment Products

Interactive Brokers and Tastytrade both offer a wide range of investment products. Interactive Brokers provides many asset classes, including stocks, options, futures, forex, mutual funds, and fixed-income products. This allows traders to create diverse portfolios and access global markets. The platform also has strong research and analytical tools for informed decision-making.On the other hand, Tastytrade focuses mainly on stock and options trading but also offers futures and ETFs. This encourages users to try different strategies. The platform features educational resources and a user-friendly interface. This helps traders effectively navigate products and adapt to changing market conditions.

Interactive Brokers vs. tastytrade: Differences

Interactive Brokers and Tastytrade are popular online trading platforms. They serve a variety of investors with different needs. Interactive Brokers offers many investment options and advanced tools. It also has a low-cost structure for active traders. Tastytrade focuses on options trading. It provides educational resources to help users make informed decisions. This comparison will highlight the differences between the two platforms. We will look at fees, user experience, available assets, and educational offerings. This will help traders find the right platform for their goals.

Trading Focus

Interactive Brokers and Tastytrade have different trading focuses. Interactive Brokers is known for serving a wide range of traders. It offers many investment products, including stocks, options, futures, forex, and fixed-income securities. This makes it suitable for various trading strategies. The platform has advanced tools and research to support professional and high-frequency traders. In contrast, Tastytrade primarily targets options traders. It emphasizes options strategies, risk management, and market analysis. The platform offers educational content and a user-friendly interface to help beginner and intermediate traders. Tastytrade provides specialized resources for options trading, while Interactive Brokers offers a broader trading experience across many asset classes.

Account Minimums

Interactive Brokers and Tastytrade differ in account minimum requirements. Interactive Brokers has a higher account minimum, especially for advanced trading features. While it has lowered its minimum to $0 for a cash account, the platform’s complexity can be daunting for beginners. This can deter new investors who are not ready for such a comprehensive platform. On the other hand, Tastytrade has no account minimums. This makes it easier for new traders to start without a large financial commitment. Tastytrade appeals to those who want to explore trading options without pressure.

Market Access

Interactive Brokers and Tastytrade differ significantly in market access. Interactive Brokers offers extensive capabilities, allowing trades in over 135 markets worldwide. Traders can access a wide range of assets, including international stocks, bonds, options, and futures. The platform supports various currencies, ideal for those seeking global diversification. In contrast, Tastytrade focuses mainly on U.S. markets. It provides trading in stocks, options, and futures within the U.S. While Tastytrade is expanding, its market access remains limited compared to Interactive Brokers. This difference may restrict investors wanting to diversify internationally. Interactive Brokers appeals to globally-oriented traders, while Tastytrade caters to those focused on domestic options trading.

Interactive Brokers vs. tastytrade: Who Wins?

Interactive Brokers and tastytrade offer robust services for experienced traders. Those without expert-level experience in trading may find both platforms too advanced for everyday trading. Thanks to its wider range of offerings, live support availability and comprehensive educational resources, Interactive Brokers wins this comparison.  

Frequently Asked Questions