If you compare Interactive Brokers and TradeStation side by side, you’ll note several distinct similarities. But start peeking beneath the curtain and you'll notice some nuanced differences that could just make one a better fit for you than the together. Here's how to choose between the two brokerages.
Overview: TradeStation vs. Interactive Brokers
Who’s Interactive Brokers for?
If you’ve been on the lookout for a convenient forex trading partner, Interactive Brokers could be a match for you, particularly if you don’t care for facilitated interfaces and want to stick to a sophisticated trading style.
Its rich set of advanced trading tools and comprehensive charting makes Interactive Brokers most suitable for advanced traders.
Read: Benzinga's Interactive Brokers Review
Who’s TradeStation for?
TradeStation is also suitable for beginner and advanced traders: stock, options and futures traders, that is. (TradeStation doesn’t offer forex trading.) The broker caters to active traders. In fact, TradeStation may not be your best fit if you lack an intense trading style.
Read: Benzinga's TradeStation Review
Interactive Brokers vs. TradeStation: Which is Better?
1. Platform and Tools
You can trade on all types of devices with Interactive Brokers. It offers web-based, desktop and mobile trading platforms.
- Interactive Brokers' desktop platform is Trader Workstation (TWS), which is most suitable for professional traders who are comfortable using the platform’s advanced multitasking features.
- The web-based platform of Interactive Brokers, WebTrader, is more simple. Less-experienced traders can easily adapt to its basic technical elements like flexible charts and screeners.
- The mobile trading platform of Interactive Brokers is intentionally a bit more basic because mobile devices do not have big screens to check out a dozen resources all at once.
TradeStation’s trading platforms include web browsers, desktop and mobile devices for trading no matter where you’re located.
The flexible, customizable desktop platform of TradeStation is the most comprehensive in terms of the resources it offers. The platform includes some high-quality features, which means it might look a bit complicated to beginners, but if you have the necessary trading proficiency, it shouldn't be a challenge. The desktop platform offers fast order execution and cutting-edge trading tools, advanced charting tools, high-quality market research, tools for managing your orders and strategy automation features.
If the desktop platform doesn’t float your boat, the web-based platform simply requires an internet connection for fast order execution. TradeStation’s web platform streams market data in real time to keep you up to date every minute.
TradeStation’s mobile app platform is basic but functional. It connects to your account and lets you monitor and manage your trades in real time. You can do the basic functions of a platform to place, modify or close orders.
Bottom Line: Interactive Brokers’ platform is so comprehensive that the average trader might find it too comprehensive. TradeStation, on the other hand, offers an advanced platform but it’s structured in a more user-friendly way.
2. Research Offerings
Interactive Brokers’ research offerings may not be as robust compared to other brokers, yet it includes some helpful basic insights, including news releases from Dow Jones and Thomson Reuters.
At the same time, Interactive Brokers supplies high-quality analysis from Morningstar and Zacks Investment Research. You can also integrate a third party provider like Benzinga to your platform, but some sources require a paid subscription.
Meanwhile, one of the reasons TradeStation is a research powerhouse TradeStation is because of its huge database of historical data.
Other research features include analysis and market insights which come from professional analysts and traders. Less-experienced traders can benefit from a comprehensive education suite, and if you have trouble assimilating with the TradeStation platform, TradeStation will supply you with resources about how to utilize your trading resources.
The Better Platform: Neither firm offers wow-factor market research, yet can supply you with the most important data concerning the markets. Interactive Brokers includes research from powerful sources but TradeStation seems to offer more research diversification.
3. Commission and Fees
Interactive Brokers’ Fees
Stocks, ETFs, Warrants
- Fixed Commission - $0.005 / share (minimum $1)
| Tiered | Per-share commission | ||
| Shares volume / month | Stocks, Warrants, ETFs, ETPs | Order min | Order max |
| 300,000 or less | $ .0035 | $ .35 | 1% * trade |
| 300,001 to 3,000,000 | $ .002 | $ .35 | 1% * trade |
| 3,000,001 to 20,000,000 | $ .0015 | $ .35 | 1% * trade |
| 20,000,001 to 100,000,000 | $ .001 | $ .35 | 1% * trade |
| More than 100,000,000 | $ .0005 | $ .35 | 1% * trade |
Options
| Monthly volume | Contract commission | Order min |
| 10,000 or less | ||
| A premium of less than $0.05 | $ .25 | $1 |
| A premium equal to or more than $0.05 | $ .5 | $1 |
| A premium of less than $ .1 | $ .7 | $1 |
| 10,001 to 50,000 | ||
| A premium of less than $0.05 | $ .25 | $1 |
| A premium equal to or more than $0.05 | $ .5 | $1 |
| 50,001 to 100,000 | ||
| All premiums | $ .25 | $1 |
| Equal to or more than 100,001 | ||
| All premiums | $ .15 | $1 |
FOP and Futures
- Fixed comission - From $0.15 / contract
| Contracts amount | Tiered commission / contract |
| Smaller or equal to 1,000 | $0.85 |
| 1,001 to 10,000 | $0.65 |
| 10,001 to 20,000 | $0.45 |
| Higher than 20,000 | $0.25 |
Forex
| Monthly volume | Commission (* Trade Value) | Order min |
| Smaller or equal to $1,000,000,000 | 0.2 basis point | $2 |
| $1,000,000,001 to 2,000,000,000 | 0.15 basis point | $1.50 |
| $2,000,000,0001 to 5,000,000,000 | 0.1 basis point | $1.25 |
| Higher than $5,000,000,000 | 0.08 basis point | $1 |
Mutual funds
| Type of fee | Cost |
| Commission-free ETFs | $0 |
| Transaction fee of Interactive Brokers | Lesser of 3% * trade value / $14.95 per transaction |
Margin rates
| Amount | Percentage |
| 100,000 or lower | 3.9% (benchmark rate + 1.5%) |
| 100,000.01 to 1,000,000 | 3.4% (benchmark rate + 1%) |
| 1,000,000.01 to 3,000,000 | 2.9% (benchmark rate + 0.5%) |
| 3,000,000.01 to 200,000,000 | 2.7% (benchmarke rate + 0.3%) |
| 200,000,000.01 and higher | 2.7% (benchmark rate + 0.3%)* |
*A 1% surcharge might occur based on the spread if financing is not pre-arranged.
TradeStation's Fees
TradeStation offers flexible pricing solutions:
| 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 |
| Options | $5 + $0.50 | $1 per contract | N/A |
Futures
- $1.5 per contract per side
- 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 |
Mutual funds
- $14.95 per trade
Bonds
- $14.95 per trade
Margin rates
| Amount | Rate |
| $2,000,000 and more | 3.5% |
| $500,000 to $1,999,999 | 5.50% |
| $50,000 to $499,999 | 8.75% |
| $49,999 and less | 9.5% |
The Better Platform: Both companies offer flexible price plans. However, TradeStation is ultra-advantageous for traders who actively trade large amounts. You can go as low as $0.002 per share, only 20% of a penny.
4. Tradable Asset Classes
Interactive Brokers offers a wide variety of tradable assets, and include pretty much all the financial assets a trader needs to cover the different portfolio classes. You can trade forex, metals, stocks, ETFs, mutual funds, futures, options and bonds.
TradeStation also has a wide set of tradable assets. The securities available for trading include stocks, options, futures, ETFs, mutual funds and bonds. TradeStation doesn't offer commission-free ETFs.
The Better Platform: Interactive Brokers offers more tradable financial assets. Interactive Brokers beats TradeStation in three fields: forex, metals and commission-free ETFs. Note that the forex market is the largest worldwide market, which means that TradeStation is unsuitable for nearly half the traders around the world.
5. Ease of Use
Interactive Brokers is not an easy trading solution. Decent training in trading is not enough to utilize its TWS platform in a healthy way. Also, its platform visualizes better on multiple screens; a 13-inch monitor laptop is not the best way to approach TWS.
Although Interactive Brokers offers a lighter trading solution that you can access via a web browser, it is relatively basic compared to TWS. Beginners can function with WebTrader, but for how long? At some point, you’ll need to move to a more advanced platform and the gap between WebTrader and TWS is huge.
TradeStation is also an advanced trading solution served in a more friendly way. Its tools comprehension and platform fit the needs of intermediate traders and maybe even some beginners. If you feel that its desktop platform is complicated, you can always try the web-based platform.
The learning curve between TradeStation’s web and desktop platforms is not that big. The desktop platform is a natural transition you’ll have to undertake at some point.
The Better Platform: Both Interactive Brokers and TradeStation are trading solutions with advanced, cutting-edge trading software. TradeStation is definitely an easier trading solution, but ask yourself if it’s enough for your needs. It might be fine if you are not a hardcore pro trader whose trading sessions happen on five 20-inch monitors.
6. Customer Support
Interactive Brokers has different customer support channels for its clients and potential clients. You can reach Interactive Brokers via live chat and email every business day, and that includes 24/7 email support.
TradeStation's customer support also comes through live chat, email, and phone. TradeStation customer support is available during business hours with small exceptions of certain important structures such as the technical department, which is also available on Sunday.
Bottom Line: Interactive Brokers' support is available only during business days via chat and phone, but during weekends, you’re covered via email support. TradeStation doesn't have a department available 24/7 or 24/5, and most of its departments are only open during business hours.
7. Security
Interactive Brokers is a U.S. broker and follows the domestic law for financial regulation. Undoubtedly, the United States’ regulations are among the strongest in the world.
One of the main signs of reliability is that Interactive Brokers is publicly traded on a stock exchange. Interactive Brokers is also a member of the Securities Investor Protection Corporation (SIPC) and the Financial Industry Regulatory Authority (FINRA). The SIPC guarantees up to $250,000 of your funds if a broker goes bankrupt. Interactive Brokers also has an additional insurance program in which clients can protect funds up to $2.5 million.
TradeStation is also U.S. broker, which indicates overall higher security. The company was listed on Nasdaq until 2011 until it was acquired by the Japanese Monex Group, which is listed on the Japanese stock market. TradeStation is also a member of FINRA and SIPC.
Its fund protection in case of bankruptcy goes up to $500,000. TradeStation offers extra insurance to its clients that comes from Lloyd’s of London and covers up to $24.5 million and an aggregate firm limit of $300 million.
The Better Platform: Clients’ security is both companies’ main priority. Although insurance amounts under SIPC and extra insurance differ, there are alternatives, and any trader can take advantage.
Final Thoughts on Choosing Between TradeStation and Interactive Brokers
- Best For:Active and Global TradersVIEW PROS & CONS:Securely through Interactive Brokers’ website
Interactive Brokers and Trade Station are two of the best online brokerages, but for a quick decision, go through these points one by one:
- You want to trade forex: Interactive Brokers operates as a forex broker, while TradeStation doesn’t.
- You want to trade commission-free ETFs: Interactive Brokers offers these and TradeStation doesn’t.
- You’re an active trader: TradeStation has relatively better fees for active traders than Interactive Brokers.
- You’re not an active trader: TradeStation is not a great choice.
- You’re a very experienced trading professional: Interactive Brokers will be a better fit than TradeStation.
- You’re a complete newbie: Interactive Brokers is not a good choice.
Frequently Asked Questions
Which traders prefer TradeStation?
Advanced and professional traders in stock, futures and options favor TradeStation.
What platforms does Interactive Brokers offer?
Interactive Brokers offers mobile, desktop and web platforms.
Which platform is better for algorithmic trading?
Both platforms support algo trading, but TradeStation’s EasyLanguage is often praised for its simplicity in creating trading algorithms