TradeZero vs Interactive Brokers: Highlights
• High-powered traders will find much to like about Interactive Brokers and TradeZero.
• Only TradeZero has software fees and account minimums.
Introduction
For advanced trading resources, Interactive Brokers and TradeZero are top brokerage firms. Let’s check them out.
Cost
| 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
|
|
TradeZero
|
$0
|
na
|
$0.59 per contract
|
$0
|
na
|
Services
| Broker Review |
Cost |
Investment Products |
Trading Tools |
Customer Service |
Research |
Overall Rating |
|
IB
|
|
|
|
|
|
|
|
TradeZero
|
|
|
|
|
|
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Promotions
Interactive Brokers: Use this referral link to get up to $1,000 of IBKR stock for free!
TradeZero:
Trade stocks, options & ETFs for free.
Tradable Products
Traders at Interactive Brokers can sell and buy the following financial products:
- Stocks
- Options
- Warrants
- Funds (mutual, closed-end, and exchange-traded)
- Bonds and other fixed-income assets
- Cryptocurrencies
- Futures
- Forex
- Precious metals
TradeZero subtracts a lot from this list. There are no precious metals, warrants, futures, forex, bonds, mutual funds, or cryptocurrencies.
To actually place a trade, TradeZero requires $2,500 in equity, at least for a U.S.-based account. Accounts based in Canada or the Caribbean, which are possibilities, require only $500. Interactive Brokers has no minimum.
Winner: Interactive Brokers
Margin
Both brokerage houses in this faceoff offer margin trading. For borrowed funds, IBKR charges
7.08% across all debit levels. TradeZero also has a flat
margin rate. Currently, it’s 9%.
Winner: Interactive Brokers
Computer Software
For all the website traders out there, Interactive Brokers offers charting, account management, security research, and trading on its web portal. There are many advanced tools, including charts with all sorts of add-ons, like drawing tools and comparisons.
The TradeZero site, by comparison, only has account-management tools. There are no trading resources to speak of, although the brokerage firm succeeds in delivering not one, but two, web-browser platforms. There is no options trading on either one of them, however, and the basic platform of the two, ZeroFree, doesn’t provide hotkeys for free.
A more advanced program is available for desktop traders. Called ZeroPro, it has a lot more features, including options tools and custom layouts. However, and this is a big however, there is a $59 monthly software fee to use the program (the second browser platform, ZeroWeb, is included in this fee). The uncomfortable fee is waived for accounts above $30k.
Interactive Brokers clients with any account value can use Trader Workstation, the broker’s flagship desktop platform. It, too, has many pro-level features, including time & sales data, practice trading without an account, a volatility skew, a probability lab, and so much more. The charting window has a right-click menu with trade buttons and many other helpful links.
Winner: Interactive Brokers
Mobile Apps
Moving from computers to tablets and phones, TradeZero eliminates its software fee, but its app is rather basic on the whole. For example, there is no Artificial Intelligence or economic calendar. The IBKR app, by comparison, does have these resources.
Both apps have charting and order entry (including for options). Both apps also have details on shorts; TradeZero’s app has an actual short-locate tool. But alerts are missing in action on TradeZero’s app; they do exist on the IBKR app.
Winner: Interactive Brokers
Day/Swing Trading
Offshore Services: A Caribbean branch of TradeZero offers day trading without a $25k account requirement and 6:1 leverage with only a $500 balance.
PDT Counter: Software at both firms displays the number of day trades an account has recently placed.
Routing: Both firms offer direct access to market makers and ECNs (electronic communication networks). TradeZero does require a balance of at least $25k to use this feature in a U.S.-based account.
Extended Hours: Interactive Brokers now offers 24-hour trading in many stocks and ETFs. TradeZero has early-morning and after-hours periods.
Shorting: Bearish trades are possible at both firms, and both firms have shorting resources.
Maker-Taker Fees: Both firms offer fees and credits for providing and removing liquidity.
Level II Quotes: Both broker-dealers have them.
Premium Services: TradeZero America customers with at least $30k in assets qualify for various perks, including VIP customer service and discounts on short locates.
Winner: Overall, pretty even
Additional Services
Fully-Paid Securities Lending: Interactive Brokers offers it.
IRA Lineups: Only Interactive Brokers has retirement accounts.
Initial Public Offerings: Neither broker offers access to IPOs.
Fractional Shares: Interactive Brokers customers can trade securities in whole dollars.
Recurring Mutual Fund Purchases: Not possible at either broker-dealer.
Dividend Reinvestment Plan: Stock positions at Interactive Brokers can be set up to reinvest cash dividends as additional shares.
Winner: Interactive Brokers
Recommendations
Small Accounts: Due to TradeZero’s atrocious software fees and account minimums, we defend IBKR.
Beginning Investors: Interactive Brokers offers simulated trading on Trader Workstation and its mobile app.
Long-Term Investors & Retirement Savers: Interactive Brokers offers several tax shelters, including custodial accounts and trusts.
Stock and ETF Trading: Besides fractional-share trading, Interactive Brokers also provides access to many foreign exchanges, so we suggest it over TradeZero.
Mutual-fund Trading: For obvious reasons, our pick is Interactive Brokers.
Promotions
Interactive Brokers: Use this referral link to get up to $1,000 of IBKR stock for free!
TradeZero:
Trade stocks, options & ETFs for free.
TradeZero vs Interactive Brokers Final Verdict
Traders with more than $30k may find a decent value at TradeZero, although Interactive Brokers is clearly the overall outperformer here.
Broker Reviews
Go to Interactive Brokers Review
or to Tradezero Review
Updated on 10/7/2024.
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.
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