Tradestation vs Interactive Brokers





TradeStation review 2015
3-star brokerage firm rating

Interactive Brokers review 2015


Tradestation vs Interactive Brokers 2015: Account Pricing, Commissions, Fees



Tradestation


Interactive Brokers

  • Stocks and ETFs flat-rate plan: $9.99 (1 to 9 trades/month); $7.99 (10 to 29 trades/month); $6.99 (30 to 99 trades/month); $5.99 (100 to 199 trades/month); $4.99 (200 or more)
  • Stocks and ETFs per-share plan: $0.01 per share first 500 shares, $0.006 per share after that
  • Options per contract plan: $1.00, no base or ticket charge, market or limit orders
  • Options per trade plan: $9.99 + $0.70 per contract (1 to 9 trades/month); $7.99 + $0.50 per contract (10 to 29 trades/month); $6.99 + $0.40 per contract (30 to 99 trades/month); $5.99 + $0.30 per contract (100 to 199 trades/month); $4.99 + $0.20 per contract (200 or more)
  • Futures: $0.25 - $1.20 per side, per contract + exchange, regulatory & overnight fees
  • Mutual funds: $14.95
  • Bonds: $14.95 + $5 per bond
  • Forex: commission-free with tight spreads and fractional pips
  • OTCBB: $9.99 (100,000 share position maximum)
  • Pink Sheet Stocks: $9.99 (100,000 share position maximum)
  • Investment products: stocks, options, mutual funds, bonds, futures, T-Bills, OTCBB, Pink Sheet Stocks, Forex, ETFs
  • Tradestation minimum deposit to open account: $5,000 for non-daytraders, futures and forex accounts, $5,500 for futures and forex IRA accounts, and $30,000 for daytraders
  • All Tradestation fees

  • Stocks and ETFs: $0.005 per share with $1 minimum, 0.5% of trade value maximum for SMART routed orders
  • Options: $0.70 per contract if Premium => $0.10; $0.50 per contract if $0.05 =< Premium < $0.10; $0.25 per contract if Premium < $0.05 + exchange fees. Minimum $1 per order.
  • Mutual funds: $14.95 (minimum size on initial fund order is $3,000, subsequent minimum order size is $100)
  • Corporate and Municipal Bonds: 0.1%* Face Value (10 bps) if <= $10,000 Face Value; 0.025%* Face Value (2.5 bps) if > $10,000 Face Value
  • Treasuries (Bills, Notes, Bonds): 0.025%* Face Value (2.5 bps) if <= $10,000 Face Value; 0.005%* Face Value (0.5 bps) if > $10,000 Face Value; $5 minimum
  • Metals: 0.15 basis point * Trade Value; minimum $2; storage cost 0.10 % per annum
  • Forex: 0.20 basis point * Trade Value if <= $1,000,000,000; minimum $2
  • US SSFs: $0.30 if <= 20,000 contracts
  • EFPs: $0.50 if < 100 contracts; $0.30 if 100 to 499 contracts;
  • Investment products: stocks, options, mutual funds, ETFs, bonds, futures, currency transactions, US SSFs, EFPs, metals
  • Interactive Brokers\IB minimum deposit to open account: $10,000 for non-IRA account, $5,000 for IRA account
  • All Interactive Brokers fees




Tradestation vs Interactive Brokers: Pros



Tradestation


Interactive Brokers

  • Low commissions for active traders
  • Great direct-access platform
  • Best charting package
  • Trading modeling functionality
  • Rich selection of investment products
  • Active online trader community
  • Good mutual funds pricing at $15 per transaction

  • Low stock commissions on orders with 1,000 shares or less
  • Professional trading platform (Trader WorkStation)
  • Best margin rates
  • Access to many markets
  • Rich selection of products for trading




Tradestation vs Interactive Brokers: Cons



Tradestation


Interactive Brokers

  • $99.95 monthly fee if not traded at least 5,000 shares in previous month (or 50 options contracts a month; or 10 round-turn futures or futures option contracts; or 50 round-turn single stock futures). Fee also doesn't apply for accounts with $100,000+ balance
  • High stock and ETF commissions for those who don't trade a lot
  • Direct routing up to 1,000 shares is no additional charge, $0.004 per share thereafter
  • $35 annual IRA fee
  • Steep learning curve to master the trading platform
  • Only about 100 mutual funds available
  • Minimum amount to open account is high: $5,000 for non-daytraders and $30,000 for daytraders

  • $10,000 minimum to open most accounts
  • $30 per month minimum commission requirement to avoid $10 monthly fee (rises to $20 monthly if account balance is less than $2,000; waived for $100,000+ accounts)
  • $10 monthly for market data feed (waived if trade commissions are more than $30 per month)
  • $7.50 quarterly fee for IRA accounts ($30 per year)
  • Extremely complicated fee structure: huge number of various fees
  • Fees on modified or canceled orders
  • Trader Workstation is designed for professional traders; it is not intuitive and difficult to learn
  • Expensive to make trades with over 1,600 shares
  • Lots of customer complains about snobby customer service (and yes, we experienced it ourselves)
  • Merciless margin tightening and fast margin calls - IB apparently doesn't care if their customers get completely wiped out
  • Minimum size on initial mutual fund order is $3,000 (subsequent minimum order size is $100). Only no-load funds with no early redemption fee are offered
  • Technical problems with trading platforms




Interactive Brokers vs Tradestation: Comparison Summary



Interactive Brokers/IB (Interactive Brokers Review) and Tradestation/TOS (Tradestation Review) are two very similar brokerage companies with the same customer base: very active traders (day-traders), institutions and hedge funds.

Tradestation has active trader oriented flat-rate commission structure, while IB does not offer flat-rate plans. Both firms offer pay-per-share pricing: Interactive Brokers' rate is lower than what Tradestation charges - $0.005 per share at IB versus TOS' $0.01 per share for up to 500 shares and $0.006 per share thereafter. Minimum commission per trade is $1 at both firms. Obviously, it means that all orders of up to 1,000 shares will be very cheap, and all orders with over 2,000 shares will be very expensive ($10 or more).

The two firms developed impressive, customizable, powerful trading platforms, and Tradestation offers clients access to helpful trader community. These brokerages also provide wide selection of investment products, and access to many international markets for customers to trade.

Both companies are trying to discourage customers who rarely trade to apply for account: IB has monthly $10 fee ($20 per month for accounts with balances less than $2,000) and another $10 per month charge for market data if client makes less than $30 in commissions per month. Tradestation charges $100 monthly fee to use its trading platform if client have not traded at least 5,000 shares in the previous month (excluded are also accounts with $100K+).

Interactive Brokers is known for very obnoxious customer service, and the firm will tighten margin requirements and liquidate positions with very little warning. It often happens at the worst possible time for clients (last time was during market crash in 2008), and it wipes out completely some customers who use the margin carelessly. IB is also the only company we reviewed who's clients complain that the firm is trading against them.

Interactive Brokers never offers promotional offers in U.S. Tradestation right now offers new customers 90 days of no account service fee (logo link below). This is an excellent opportunity to try one of the best trading platforms in the industry and save a lot of money.

We recommend Tradestation and Interactive Brokers only for experienced, active traders and hedge funds. Tradestation is the best firm for futures and options trading. IB is excellent for stock trading. For everybody else, especially beginners and anyone who rarely trades, we suggest researching companies in Online Brokers List.


Tradestation Promotion - trade commission
free for up to 90 days:

TradeStation review 2015


Interactive Brokers Promotion - none
right now:

Interactive Brokers review 2015


This article was updated on 8/14/2015.



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