Tradestation vs Interactive Brokers



3-star brokerage firm rating

TradeStation review 2014
3-star brokerage firm rating

Interactive Brokers review 2014


Tradestation vs Interactive Brokers 2014: Account Pricing, Commissions, Fees



Tradestation


Interactive Brokers

  • Stocks and ETFs flat-rate plan: 1 to 9 trades/month - $9.99/trade; 10 to 29 - $7.99/trade; 30 - 99 - $6.99/trade; 100 - 199 - $5.99/trade; 200 or more - $4.99/trade
  • Stocks and ETFs per-share plan: first 500 shares $0.01 per share, $0.006 per share thereafter, $1 minimum per trade
  • Options: $1 per contract with no ticket charge, or $4.99 per trade + $0.20 per contract
  • Futures: 25¢ - $1.20 per side, per contract + exchange, regulatory & overnight fees
  • Mutual funds: $14.95
  • Bonds: $14.95 + $5 per bond
  • 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 per trade 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
  • 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

  • Great direct-access platform
  • Trading modeling functionality
  • Rich selection of investment products
  • Active online user community

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




Tradestation vs Interactive Brokers: Cons



Tradestation


Interactive Brokers

  • $99.95 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). Excluded are also accounts with $100,000 balance
  • High stock and ETF commissions for those who don't trade a lot
  • Lots of fees for market data
  • Direct routing up to 1,000 shares is no additional charge, $0.004 per share thereafter
  • $35 annual IRA fee
  • Steep learning curve: trading platform is too complicated for beginner investors
  • Poor research amenities
  • Excluding the first 10 free cancels, if the total number of cancels is more than the total number of contracts executed per day, per account, there is a $1.00 options cancelation charge per each cancel that is over and above the number of contracts executed
  • 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)
  • $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




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, hedge funds and day-traders.

Tradestation has somewhat high 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 cents per share versus 0.01 cents per share (for up to 500 shares and $0.006 per share thereafter) at the competitor. 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. But, at the same time, all orders with over 2,000 shares will be very expensive: $10 or more.

Both companies are trying to discourage new potential customers who rarely trade to apply: 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.

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.

Interactive Brokers never offers promotional offers in U.S. Tradestation right now offers new customers 90 days of commission-free trading (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 in commissions.

We only recommend Tradestation and Interactive Brokers for experienced, active traders and hedge funds. For everybody else, especially beginners and those who rarely trade, we suggest researching companies in Online Brokers List.


TradeStation Promotion - trade
90 days for free:

TradeStation review 2014


Interactive Brokers Promotion - none
right now:

Interactive Brokers review 2014


This article was updated on 3/3/2014.



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