Interactive Brokers vs Merrill Edge

Merrill Edge vs Interactive Brokers


Interactive Brokers IBKR vs Merrill Edge—which is better in 2022? Compare IRA/Roth accounts, online investing fees, stock broker mutual fund rates, and differences.


Overview of Interactive Brokers and Merrill Edge


Interactive Brokers attracts a lot of professional-level traders. But Merrill Edge also has an advanced desktop platform—plus some services that IB lacks. Could Merrill actually be a better choice? Here’s our answer:


IBKR vs Merrill Fees


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
IB $0 $14.95 $0.70 per contract $0 $30
Merrill Edge $0 $19.99 $0.65 per contract $0 $0
WeBull $0 na $0 per contract $0 $0


IBKR vs Merrill Services


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
IB
Merrill Edge
WeBull


Promotion Links


Interactive Brokers: Use this referral link to get up to $1,000 of IBKR stock for free!

Merrill Edge: Get up to $600 when you open a new Merrill Edge account with at least $20,000.

Webull: 6 FREE stocks valued $34-$12,600 give-away at Webull.



First, Let’s Take a Look at Financial Instruments


Merrill Edge clients can buy and sell these investment products:

  • Options
  • Equities
  • Exchange-traded funds
  • Mutual funds
  • Closed-end funds
  • Bonds and other fixed-income securities

Merrill provides access to penny stocks and the over-the-counter marketplace. Foreign markets, however, are off limits.

Interactive Brokers maintains trading in these assets:

  • ETFs
  • Closed-end funds
  • Mutual funds
  • Futures contracts (including many esoteric instruments, such as cryptocurrency contracts)
  • Forex
  • Precious metals
  • Structured products
  • Contracts for difference
  • Equities
  • Options (options on futures, too)
  • Warrants
  • Many kinds of bonds
  • Cryptocurrencies

On top of this long list of financial vehicles, IB offers direct access to foreign exchanges in multiple asset classes. IB customers also can participate in upcoming IPOs.

Winner: Interactive Brokers


Next, It’s Desktop Software


Merrill Edge customers get to use MarketPro, the firm’s flagship software. It delivers many features professional traders need, including:


Merrill Lynch vs IB


- Full-screen charting with many tools, including technical indicators, right-click trading, and drawing tools
- Advanced derivative tools, including OptionsPlay
- Stock research from Merrill Lynch
- Technical analysis from Recognia
- Economic calendar
- And much more
Our biggest gripe about MarketPro is that you have to log into the Merrill Edge website and download a file every time you want to launch the program. Although MarketPro is a desktop program, there is no actual login from the desktop.

IB clients get to use Trader Workstation, a platform that definitely rivals MarketPro. Highlights include:


IB vs Merrill Edge


- Excellent graphing program with lots of tools
- An entry-level Artificial Intelligence (will probably get better with time)
- Multi-asset trading (currencies, warrants, futures, options)
- Two main layouts
- Alerts
- Direct trading on foreign exchanges

Perhaps the biggest advantage that Trader Workstation has over MarketPro is simulated trading.

Winner: Interactive Brokers


Third, Other Computer Software


Besides its desktop software, Interactive Brokers also gives its customers API functionality. For less sophisticated traders, IB offers a user-friendly client portal that has good research tools, fractional-share trading, and several other useful features.

Last, but not least, is WebTrader. This is an HTML-based platform that delivers very simple charting but nevertheless provides trading in many countries and many asset classes.

Merrill Edge doesn’t quite have the number of platforms that Interactive Brokers has. It does have a very good website with basic charting, an advanced order ticket, and effective security screeners.

Winner: Interactive Brokers


Fourth, Mobile Apps


Mobile trading is possible at either brokerage firm in this study. During our examination, we found the IB platform to have many more trading features, such as a demo mode, multiple trade tickets, and advanced charting. The software also incorporates an Artificial Intelligence, the same AI on Trader Workstation.


IBKR Lite Mobile App Review


Merrill’s app isn’t as sophisticated. But it does proffer a free credit score and several educational tools.


IB vs Merrill Lynch


Winner: Interactive Brokers


Fifth, Funds


The client portal at Interactive Brokers supplies many fund data points, such as:

Risk analysis
Fund events, such as dividends
Ownership
Reports from one analyst

Interactive Brokers has an ETF screener, but there is no search tool for mutual funds.

Merrill Edge does have a mutual fund screener. The broker also presents mutual fund (and ETF) trade recommendations based on Merrill Lynch research. Fund profiles give ratings from both Lipper and Morningstar. Some funds have in-depth analysis from Morningstar or CFRA.

Winner: Merrill Edge


Sixth, Options


By default, Trader Workstation provides chains for calls and puts. Clicking on a Strategy Builder button presents 11 spreads that can be selected instead. WebTrader also has spreads, but the client portal does not.

At Merrill Edge, traders have access to OptionsPlay on MarketPro. This piece of software provides trading strategies based on a ticker symbol and bullish or bearish sentiment.

During our testing, we found the Merrill website very useful for options trading as well. There are materials on options education, an options screener, and a strategy builder. The broker’s software returned no less than 38 spreads with profit-loss diagrams. Case closed.

Winner: Merrill Edge


Seventh, Investment Advice


Merrill Edge has two investment-advisory programs: Guided Investing and Guided Investing with an advisor. The former option costs 0.45% per year with a $5k starting balance. The latter option costs an extra 40 basis points and requires $20k. But, as the title suggests, this package comes with a working relationship with a licensed financial planner.

Interactive Brokers offers nothing here.

Winner: Merrill Edge


Eighth, Swing Trading & Day Trading


Shorting: MarketPro doesn’t have a feature to locate equity shares to short, and neither does Trader Workstation. But IB's website does have a short locator.

Extended Hours. Both companies provide pre-market and after-hours trading. IB has more hours.

Level II Quotes. MarketPro and Trader Workstation both deliver Level II data. It’s free on MarketPro, but IB charges for it.

Direct-access routing. Surprisingly, MarketPro doesn’t have direct-access routing. Trader Workstation does; and so does WebTrader.

Margin. Margin accounts are available at both broker-dealers. Currently, IBKR Lite customers pay 4.08% across all balance tiers. IBKR Pro customers get even lower rates. Merrill Edge charges either 9.989% or 8.864%, depending on the balance. Debits above $100,000 qualify for negotiated pricing.

Routing Fees and Rebates. Maker-taker fees are available at Interactive Brokers. Because Merrill doesn’t have direct-access routing, it’s not possible to get them at Merrill.

Winner: Interactive Brokers


Ninth, Miscellaneous Services


Dividend Reinvestment Program: DRIP service can be enabled (free of charge) at either firm in this survey. But only Merrill Edge permits the enrollment and unenrollment of individual securities.

IRAs: Retirement accounts are available at both IB and Merrill Edge. The latter firm has more IRA types.

Automatic Mutual Fund Investing: Interactive Brokers doesn’t offer periodic investing services, but Merrill Edge does.

Winner: Merrill Edge


Finally, Our Recommendations


Long-Term Investors and Retirement Savers: We like Merrill’s financial planning services and mutual fund resources. The brokerage house also has a solo 401(k) plan.

Beginners: Interactive Brokers revolves around professionals and experienced traders. So of course we pick Merrill Edge.

Stock/ETF Trading: Interactive Brokers.

Small Accounts: Either will work. Interactive Brokers customers should choose IBKR Lite.

Mutual Fund Traders: Merrill Edge.


Promotion Links


Interactive Brokers: Use this referral link to get up to $1,000 of IBKR stock for free!

Merrill Edge: Get up to $600 when you open a new Merrill Edge account with at least $20,000.

Webull: 6 FREE stocks valued $34-$12,600 give-away at Webull.



Merrill Edge vs Interactive Brokers Judgment


MarketPro didn’t quite succeed in unseating Trader Workstation. For high-powered domestic and global trading, Interactive Brokers is hard to beat. But Merrill Edge does deliver better resources in some important areas, not least of which is fund investing.


About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.