TradeStation vs. Interactive Brokers 2019

TradeStation and Interactive Brokers both ranked in our top 5 this year. Customers will find a nearly overwhelming supply of tools, data feeds, and customizable portfolio analysis features on both sites. Both have extensive connections to third party apps, enabling deeper technical analysis and automated trading strategies. These brokers are better suited to traders and investors with some experience, though they are both making an effort to help newbies. Which is better for you?

TradeStation's focus on high quality market data and trade executions and their commitment to superior customer service makes them a good choice for the active trader. Their systems are stable and remain available during market surges. Technical analysis and statistical modeling of trading strategies is another strength of the TradeStation platform, which we ranked 4th overall. You can develop your own automatic trading system using the analysis tools and strategy backtesting. You can also generate income through the fully-paid stock lending program and enhance your trading skills with the extensive educational offerings.

Interactive Brokers ranks second overall in our 2019 review due to its wealth of tools for sophisticated investors who are interested in tracking global investing trends. The firm makes a point of connecting to any electronic exchange globally, so you can trade equities, options and futures around the world and around the clock, on your desktop or on a mobile device. IB also has a fully-paid stock lending program and allows customers to borrow against their brokerage accounts for any reason -- not just trading on margin -- at a low interest rate (currently 3.7%).

In our 2019 Best Online Brokers Awards, Tradestation received awards for Best Overall Online Brokers, Best for Penny Stocks, and Best for Day Trading.

Interactive Brokers received awards for Best Overall Online Brokers, Best for Low Costs, Best for Options Trading, Best for Penny Stocks, Best for Day Trading, and Best for International Trading.

TradeStation Today is the first screen you'll see after logging into either the downloadable platform or the web platform, which includes featured videos, links to workspaces, the firm's Twitter feed and an economic calendar. The desktop platform, which is a downloadable app, is extensively customizable; the web platform has most of the TradeStation toolset and is a little easier to use. All data streams in real time. You can place, modify, and cancel trades from charts or by using keyboard shortcuts. TradeStation’s trade ticket is called Matrix, and it adapts to the asset class you’re trading. Hovering your mouse over a bid or ask price opens a trade ticket, which you can then modify prior to sending the order. Their orders are routed to seek out and capture as much price improvement and hidden size as reasonably possible within a reasonable period of time while being mindful of market impact.

The Traders Workstation is IB’s flagship platform, but you can also log into the web-based Client Portal to access portfolio analysis, a forum for clients, the Market Overview tool and other tools including trading. Several high-end analytical tools have been added to Client Portal, including scanners, global data, and customizable watchlists. There is streaming data everywhere on all platforms, though you can only have data updating on one device at a time. You can also enter orders from a graph, or from the matrix display in TWS. IB’s order execution engine has what could be the smartest order router in the business, as it stays on top of changes in market conditions to re-route all or parts of your order to achieve optimal execution, attain price improvement, and maximize any possible rebate.

TradeStation

• Place trades from the trade ticket, from a graph, or using keyboard shortcuts
• All data streams in real time
• Orders are routed to capture price improvement without making a big impact on the market

Interactive Brokers

• Trade on any global market that can be accessed electronically
• All data streams in real time, but you can only have one active device at a time
• Orders are routed to maximize rebates, and could be split among venues to maximize price improvement

TradeStation supplies streaming real-time prices on the mobile app, and enables the trading of all options strategies. There are numerous customization settings for the mobile app, including bypassing a trade confirmation for faster order entry. The mobile apps synch to your desktop or web-based platform, including charting customization settings. The firm added 22 new chart studies to the mobile app over the last year, including Ichimoku clouds. The “Hotlist” tool, which shows major market movers, is included with the mobile app. You can interact with a chatbot on Facebook Messenger.

Interactive Brokers also provides streaming real-time data for watchlists and charts on its mobile app. Options trading on IB's mobile app is very simple. You tap on tiles representing the strikes and expiry dates you want to trade to build a spread. You can compare two potential trades with the Performance Profile tool. Most of the international exchanges can be accessed on the app, but there are a few missing. There’s a persistent Trade button letting you send orders to market quickly. IBot, Interactive Brokers' AI-powered assistant, is built into the mobile app, helping you find advanced order types and analytical tools on the app.

TradeStation

• Streaming real-time data for all watchlists and charts
• Technical chart studies, including Ichimoku clouds, enabled on mobile
• Customer service via a chatbot on Facebook Messenger is available

Interactive Brokers

• Streaming real-time data for all watchlists and charts
• All options strategies can be traded on a mobile device, as well as many international equities and derivatives
• IBot, the AI-powered assistant, helps customers find features easily

TradeStation has built its options strategy analyzer, OptionStation Pro, into the desktop platform. The graphical display gives you a picture of the potential profitability of a strategy, which you can adjust in the trade ticket at the bottom of the screen. RadarScreen is an incredibly flexible stock scanner, which lets you create stock screens based on technical and/or fundamental criteria. TradeStation’s historical data set is second to none, with over 50 years of daily history, 27 years of minute history, and 6 months of tick by tick history. There are no analyst reports available, however, though TradeStation’s in-house market commentary, called TradeStation Market Insights, is available in the desktop platform and is updated five to ten times during the trading day.

Interactive Brokers has built numbers options-specific tools TradersWorkstation, such as Probability Lab, which lets you compare your market outlook to current conditions, suggesting strategies you can trade. IB offers its clients free research from nearly 100 providers including Alexandria Social Sentiment, Market Realist, Zacks, TipRanks, ValuEngine, Dow Jones, and many more. ESG ratings are available from Thomson Reuters, letting you compare and rank companies based on factors that matter to you. You can also buy discounted subscriptions to premium research. The Risk Navigator lets you stress-test your portfolio by seeing how a certain change in market conditions would affect your holdings.

TradeStation

• OptionStation Pro is a flexible toolset for analyzing and places options trades
• Screen stocks in real time using RadarStation
• Historical data available for charting is unmatched in the industry

Interactive Brokers

• Probability Lab helps customers build options strategies
• Free research available from over 100 providers, with discounted subscriptions possible from additional premium research sites
• The Risk Navigator lets you stress-test your portfolio by seeing how a certain change in market conditions would affect your holdings.

TradeStation offered more than 300 webinars in 2018, including lessons on placing trades, available asset classes, technical analysis, and options trading. They added to their YouTube channel’s video content and have been offering five-day “Master Class” events in Chicago and Plantation, Florida. You’ll find live education events streaming on all platforms on topics such as using margin, trading ETFs and IPOs (initial public offerings), and cryptocurrencies. TradeStation's websites and applications use 256-bit data encryption (TLS/SSL) to protect customer accounts.

Interactive Brokers' Traders Academy offers free online courses on a wide array of topics, ranging from TWS for Beginners up to in-depth explanations of various trading algorithms you can use. Traders Academy is accessible from all platforms, including mobile. IB holds approximately 250 live webinars a year, and they have an archive with nearly 900 previously recorded webinars. The Traders’ Insight blog includes educational content on retirement and tax topics, along with outlooks for US, Asia-Pacific, Europe, and various market sectors. The IBKR Quant Blog is there for clients who want to model the financial markets and write their own trading algorithms. IB's customers can use a secure device, supplied by the firm, for two-factor authentication of their accounts.

TradeStation

• More than 300 webinars offered in 2018 with a similar number planned for 2019
• TradeStation has a YouTube channel with constantly updated video content
• TradeStation's websites and applications use 256-bit data encryption

Interactive Brokers

• Traders Academy, offering free online classes on a wide variety of topics, is accessible from all platforms
• Blogs are offered on topics from retirement and tax planning to algorithmic trading
• Request a device from IB to use two-factor authentication at login

TradeStation gives customers the choice of several different pricing tables, depending which assets and how frequently you trade. A standard trade of 500 shares is $5. If you trade frequently in small blocks, you might consider per-share pricing, which starts at $0.01 per share. Options transactions are near the average for the brokers we reviewed, while margin rates are slightly above average until you get up into 7 figures.

Interactive Brokers is one of the least expensive places to trade online. Clients can choose from a fixed rate plan or a tiered plan, depending on trading volume. The fixed rate plan is best for occasional traders who favor market orders, while the tiered model minimizes trading costs for frequent traders who factor exchange rebates into their strategies. We used the fixed rate plan for our calculations, which is $.005 per share with a minimum of $1 per trade. There is no per-leg fee for options trades; commissions range from a maximum of $0.70 per contract to $0.15 per contract depending on volume. Margin rates were the lowest in our survey, and you can borrow against your assets for any reason – not just trading. Plus, IB pays 1.7% on idle cash over $10,000. 

TradeStation

• Stocks/ETF trade fees: $5 standard fee. Per-share fees available
• Options fees: $5 per trade plus $0.50 per contract
• Futures fees: $1.50 per contract

Interactive Brokers

• Stocks/ETF trade fees: $0.05 per share, minimum $1 per trade for U.S. stocks
• Options fees: $0.15-0.70 per contract, $1 minimum
• Futures fees: $0.85 per contract