If you’re looking to open a brokerage account, you’re obviously not short of options. Unfortunately, the hunt for the right brokerage can be overwhelming. With various features to compare among online brokers — fees, commissions and research offerings to name some — you can easily lose focus of your end goal.
Shopping for an online broker is easy if you know what points to consider. Benzinga has compared 2 popular brokerages, TradeStation and Charles Schwab, to help you better understand how they compare with commissions, fees and offerings.
Who is TradeStation for?
TradeStation stands out as a commission-free online brokerage. It also provides professional data and high-speed trade execution on an expert-level dashboard. You earn a 0.40% interest if you fund your equities account with a minimum of $1 million for the 1st time. An existing customer earns a 0.40% on any deposit above $500,000.
TradeStation is a great brokerage if you are:
- An expert trader: TradeStation offers experienced traders a platform where they can leverage their broad trading knowledge to perform high-speed trades. Better yet, you can easily back-test proven trading strategies and copy them into your current trades.
- An active trader: As an active trader, you’ll enjoy the benefit of reduced brokerage fees on every trade you make. TradeStation charges brokerage fees based on volumes traded, so you pay less if you trade more often and in large volumes. You may also be exempted from software charges.
- A beginner: If you’re still new to online trading, TradeStation might be a good option to start with since its simple and straightforward platform allows for easy execution of trades. It is also easy for you to understand all its tools of trade. Easy customization also allows rookie traders to create a dashboard suitable for your trading needs.
- An institutional investor: TradeStation has a ton of services that provide tailor-made, online trading solutions. You can also take advantage of the electronic execution services offered across different asset classes. The brokerage also has great exposure serving institutional investors in North America, Latin America and Europe, among other worldwide markets.
Who is Charles Schwab for?
Charles Schwab boasts one of the most comprehensive online trading services on the market. With the vast scope of tools, products and research most investors have something to trade in. You can use Charles Schwab if you fit in any of these investor categories:
- Day and retail traders: One of Charles Schwab’s unique identifying features is its $4.95 commission per trade, which is incredibly low and affordable for most retail traders. Only a few brokerages can rival this low-end commission.
- Long-term investors: Charles Schwab boasts vast resources meant for use by investors looking to strengthen their investment portfolio in the long-term. The brokerage doesn’t charge maintenance or account service fees and you can reach out to its consultants if you need guidance while executing your trades.
- Traders who like options: If you like to have a mix of asset classes in your portfolio, Charles Schwab is a great online broker. The brokerage has a wide range of alternatives, including more than 200 no-fee ETFs and dozens of fee-free mutual funds. You can also enjoy unlimited access to research resources like Morningstar, Credit Suisse, Briefing.com and the broker’s own proprietary research. You will also have access to Charles Schwab’s trading and research site as well as its software-based platform.
TradeStation Fees and Commissions
Similar to most online brokers, TradeStation offers commission-free trading for futures, options, ETFs and stocks. The company offers 2 plans, TS GO and TS Select. TS GO is exclusively available on mobile and has no minimum funding requirements. TS Select requires a minimum funding of $2,000 to start trading.
The commissions for various asset classes are shown below.
You will incur a $50 monthly inactivity fee if you don’t maintain the $2,000 month-end balance, fail to execute at least 5 trades within the first 12 months of funding your account or 12 months following the anniversary of your 1st funding date. Traders can easily maintain the minimum account inactivity fee.
If you choose to trade in futures, here is a table showing all of the brokerage’s tiered plans:
| Monthly Contracts | Per Contract per Side |
|---|---|
| <300 | $1.20 |
| 301–1,000 | $1 |
| 1,001–10,000 | $0.65 |
| 10,001–20,000 | $0.45 |
| >20,000 | $0.25 |
Charles Schwab Fees and Commissions
Charles Schwab is a great option if you want a value broker for your trades. Although the brokerage has a $1,000 account minimum requirement, there are no service charges for having an account. The minimum balance requirement can be dropped if you set up a $100 monthly deposit into your Schwab One brokerage account. The company boasts some of the lowest per-trade commissions on stocks at $4.95 for all trades on stocks.
The broker also provides a selection of fee-free mutual funds as well as 200+ no-fee ETFs. Its fee for options trading is quite standard as with other online brokers, going at $0.65 per contract. Partial and full account transfers come in at $25 and $50, respectively.
Generally, Charles Schwab is more affordable than other brokers in most of its aspects. But, there’s a catch: Outside the “Schwab OneSource” no transaction fee mutual funds, you will pay a $76 commission, which is the highest among major brokerages.
- Futures Trading
TradeStation Research Offerings
TradeStation is rich in research resources and offerings. The company boasts a complex infrastructure that not only offers advanced research tools but also allows traders to back-test strategies based on its vast historical data. Advanced traders can also take advantage of TradeStation’s charting features that are well structured and provide 170+ technical indicators for analyzing traders.
If you’re a stock trader, the brokerage gives you access to stock reports from Market Edge and Credit Suisse. Its website’s resource section also has articles and videos that you can use to master a few tricks to execute your first trades. The company also owns a designated TV network that gives in-depth analyses on online trading. You can also attend educational events centered around investing and trading.
For better research capabilities, TradeStation provides traders with a news feed comprising news snippets from multiple news websites. It also offers a watchlist system that allows for endless customization through the 300+ data points.
Charles Schwab Research Offerings
Charles Schwab has a host of resources that you can take advantage of as soon as you set up your account. The company boasts a premium trading and research platform known as StreetSmart Edge, which is available to all clients.
The brokerage’s browser-based trading site is also excellent, giving you ETF, stock, options and mutual fund screeners. Schwab’s Trade Source page is also a great utility if you’re looking for insight into its asset classes. A $5,000 minimum account balance will give you access to Schwab’s Intelligent Portfolio and its fee-free robo-advisor.
Charles Schwab also provides robust research regarding its mutual funds. You will also have access to commentary, news and ratings from Reuters, Morningstar, Standard & Poor and Credit Suisse, just to mention a few. The broker also provides an economic calendar populated by Briefing.com and Econoday.
TradeStation vs Charles Schwab Bottomline
TradeStation features most of the traits you need if you’re an active and expert trader — multiple tradable securities, a robust trading platform, low trading commissions and useful research tools. It doesn’t lock out beginners since its affiliate YouCanTrade gives them access to online lectures and webinars that can help them master their first trades.
Schwab’s pricing, selection of fee-free products and host of research guidance tools should rank it among your top online brokerage options. However, the brokerage may not be a good fit for the inexperienced trader since some research tools, online tutorials and simulated trades are available to those with a $5,000 minimum account balance.