Overview
The first broker-dealer to roll out free commissions was Robinhood. But now TD Ameritrade has joined the ranks
of $0 firms. So which company is the better bet: Robinhood or TD Ameritrade? This article will provide the
answer.
Cost Comparison
Services
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Trading Tools |
Customer Service |
Research |
Overall Rating |
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TD Ameritrade
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Robinhood
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First, Let’s Look at Available Investments
TD Ameritrade delivers a large assortment of financial instruments. There are stocks, fixed-income securities, option contracts, forex, futures (including bitcoin futures), ETFs, mutual funds, closed-end funds, and IPOs. Over-the-counter and penny stocks are part of the smorgasbord as well.
Robinhood customers don’t have access to bonds, forex, futures, mutual funds, or closed-end funds. The broker sometimes offers limited selections of IPOs. Its penny and OTC equity selection is also smaller than TD Ameritrade’s. Robinhood does offer trading in 7 cryptocurrencies (bitcoin and 6 others).
Overall, our pick here is TD Ameritrade.
Next, Let’s Analyze Mobile Platforms
Robinhood’s mobile app is simple, but it gets the job done. During our testing, we were able to quickly and easily submit orders. Charting unfortunately is on a very basic level. There are just two chart styles, and there’s no way to display a chart horizontally. The app’s trade ticket provides just two duration choices, but extended-hours trading is possible.
TD Ameritrade actually has three mobile platforms. Charting comes with many tools and the ability to rotate a graph. One app has 400 technical studies. Financial news streams in video format, something that’s not available on the Robinhood platform. Other features that we didn’t find on Robinhood’s platform that we did find on at least one of TD Ameritrade’s include Level II data and mobile check deposit.
TD Ameritrade easily wins the second category.
Third, We’re Going to Take a Look at Websites
After testing out the mobile apps, we next went to the brokers’ websites. TD Ameritrade’s has a very nice trade bar. Named SnapTicket, it can quickly send orders to the exchanges not just for stocks and ETFs, but also for options. Although the brokerage firm no longer has a browser platform, its website has decent charting and order forms.
Robinhood’s website has less material on it. But we did find its trade ticket easy to use. There are stop and trailing orders, although SnapTicket offers more types. Charting has two graph styles and four technical indicators, far fewer than TD Ameritrade’s site. Robinhood’s site has a watchlist, but no alerts. TD Ameritrade’s has both.
Another defeat for Robinhood.
TD Ameritrade: $0 commissions + transfer fee reimbursement.
Robinhood: Get one free $3-$7 value stock when you open an account.
Fourth is Desktop Trading
Traders who would rather pass on browsers and mobile apps can use TD Ameritrade’s desktop program instead. Called thinkorswim, it offers a lot of powerful features not found on the company’s website. Even better, it’s completely free to use with no account requirements.
thinkorswim has hundreds of technical indicators, lots of drawing tools, and tick-by-tick price history. There is a simulated trading mode, which is a good way to learn the software. Other highlights that we really liked include Level II quotes, forex and futures dealing boxes, free streaming of CNBC, and direct-access routing.
Robinhood does not offer desktop platform.
TD Ameritrade again.
Fifth is Funds
As noted in the opening category, Robinhood doesn’t provide mutual fund investing, while TD Ameritrade does. Obviously, TD Ameritrade is our pick there. But what about ETFs?
On Robinhood’s browser platform, we found ETF data, such as distribution yield and price history. There is no ETF center, although there is a limited fund screener that is able to search by a few variables, such as popularity and analyst ratings.
Over at TD Ameritrade, we found a very extensive ETF center. Some of the resources include Morningstar and CFRA fund analysis, an icon-based search tool for different classes of funds, and an x-ray portfolio analyzer. The broker’s ETF screener is much more thorough, and we really liked the list of All-Star funds, which are a great resource for anyone looking for professional ETF picks.
Once again, TD Ameritrade.
Sixth is Security Research
During our inquiry, we located many research materials on TD Ameritrade’s platforms. The website has in-depth screeners for all securities offered. Stock profiles have enormous amounts of information, including free analyst reports from third parties. TD Ameritrade even has its own TV channel now. It streams free of charge on the website and thinkorswim. Educational materials (in article and video format) help newbies learn the basics of investing.
At Robinhood, there are no educational materials to speak of. The broker-dealer does provide a stock/ETF screener; but it doesn’t have very many search variables. Security profile pages don’t have much information on them, and we didn’t find any stock reports.
Robinhood has yet to win a single category.
Seventh is Options
Robinhood’s software doesn’t use traditional option chains. Instead, the broker displays call and put buttons alongside buy and sell buttons. Users simply click or tap on the appropriate choices, and the order ticket is automatically filled. Different strike prices and expiration dates can be selected. For some odd reason, only the mobile app offers pre-defined strategies like straddles.
On TD Ameritrade’s software, traditional chains are used. During our testing, we found both formats equally effective. The website offers calls/puts in addition to pre-defined strategies. One highlight is free option analyst reports in pdf format from CFRA.
thinkorswim provides direct-access routing for derivative orders, one of the few platforms we know of to do so.
Another defeat for Robinhood.
Eighth is Crypto
Bitcoin futures contracts can be traded at TD Ameritrade on the thinkorswim platform. A few advanced order types are available, but there are only two duration choices. The brokerage house charges $2.25 for each contract traded.
Robinhood’s policy has always been zero commissions on everything. So cryptocurrency trades cost nothing. Moreover, other currencies besides bitcoin are available. These include Dogecoin and Ethereum.
Robinhood finally takes a trophy.
Ninth is Other Services
TD Ameritrade, but not Robinhood, offers IRAs, and auto deposits into mutual funds.
Both brokers offer DRIPs and banking tools.
TD Ameritrade wins the final category.
Finally, Our Recommendations
Mutual Fund Traders: TD Ameritrade of course.
Beginners: We also propose TD Ameritrade for new traders. The company has a large network of branch
locations, learning materials, and decent customer service, none of which are available at Robinhood.
Retirement Savers: Robinhood still hasn’t rolled out Individual Retirement Accounts, let alone a solo 401(k). So TD Ameritrade is our pick.
Trading Tools: TD Ameritrade easily.
ETF and Stock Trading: TD Ameritrade for its software.
TD Ameritrade: $0 commissions + transfer fee reimbursement.
Robinhood: Get one free $3-$7 value stock when you open an account.
TD Ameritrade vs Robin Hood: Results
TD Ameritrade succeeded in every single category except crypto. With its new pricing schedule, it is head and
shoulders above Robinhood.
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