TradeStation vs. Interactive Brokers - Everything You Need to Know

TradeStation vs. Interactive Brokers - Empty Conference Room
Bill Cascade   NEW 09/07/2019 00:00:00 Guides

If you’re a day trader, you may well be wondering which broker is right for you, TradeStation or Interactive Brokers? On first glance, there does seem to be many similarities when comparing the two. However, the further you research the two, you’ll soon come to see those differences appearing.

We thoroughly believe each broker has its own advantages. This is clear when it comes to individual trading requirements. Therefore, one company may suit you better than the other. Here we take a look at the two in detail. This means considering what it is that sets both companies apart from one another. We also try to reach conclusions about which broker edges the competition here. 

Who Are These Brokers?

Before looking at their similarities and differences in further detail, let’s introduce both companies:

TradeStation 

Established in 1982, TradeStation is a focused trade broker. It is a good choice for the more active of traders. It is claimed to be suitable for both beginners and advanced traders. TradeStation deals with options and stocks and futures traders - but doesn’t offer Forex Trading. This is a better fit for those who prefer the intensive nature of trading styles.

Interactive Brokers

Established in 1977, Interactive Brokers cater to Forex traders. It also serves the more professional traders. They offer access to a rich set of the most advanced trading tools. They also have comprehensive charting making them more suitable for those advanced traders. They’re a good fit for those who prefer reliable trading styles. Interactive Brokers work for those who demand consistency throughout.  

Those Areas Where TradeStation Excels

  • TradeStation offers an advanced type of trading platform. This is one which is exclusively designed by traders for traders. Thus, the company claims it's sophisticated - but equally accessible. 
  • There is the possibility here to add-on a vast selection of third-parties.  
  • They also offer an immense selection of historical data. When utilizing this, traders can back-test many trading ideas. 
  • This broker can cope with those high volumes of active traders.


Possible drawbacks to TradeStation:

TradeStation tends to put those lesser of active traders at a disadvantage on their site. This is because it’s all predominantly geared towards the more active traders. Besides this, their ETFs are commission-free here. 


Those Areas Where Interactive Brokers Excels

  • Interactive Brokers claim to offer some of the lowest rates seen in the industry. So, if you like to trade on margin, you’re in luck here.
  • They also offer a vast selection of different order types. This makes it better for that professional of traders. This is also said to include as many as over 60!
  • Additionally, Interactive Brokers offer pay-per-share commissions which are lower on stock trades. This is up to 1,000 shares. They also apply this to options trades, up to 20 contracts. 

Possible drawbacks to Interactive Brokers:

Interactive Brokers do charge account fees. These include transfer fees, annual fees, and fees for when closing inactivity. Some people may also find their trading platform an extremely complex one. This includes when navigating it and indeed using it in general.

The Difference Between the Two Brokers and What This Means

Now we’re aware of the general concept of each broker, it’s time to look at how they differ to one another. Here we look at the differences between TradeStation and Interactive Brokers on:

  1. Platform and Tools
  2. Research Offerings
  3. Security
  4. Customer Support
  5. Trading Asset Classes

1. TradeStation vs. Interactive Brokers for Platform and Tools

TradeStation vs. Interactive Brokers - Platforms and Tools - Desktop, tablet, mobile

Interactive Brokers allow you to trade with them on all types of devices. Yet, though their platform is comprehensive. It's this inclusiveness that may be too much for the average trader. They do, however, offer multitasking features, flexible charts, and screeners. There’s also an option for those less experienced traders to readily adapt here. This is especially so with the more basic technical elements if they need to.

TradeStation offers trading platforms on desktop, mobile, and web browsers. It is also accessible wherever you’re located. Their platform may also show signs of advancement. But, it is more user-friendly. Upon first glance, it can look quite complicated, especially to beginners. But, you do get more selection here, including advanced charting tool and fast order execution. Cutting edge trading tools, high-quality market research, and strategy automation feature are also accessible here.

The Result: Both sites are confident and extensive. But, the Interactive Brokers may be too intense for the average trader. TradeStation seems advanced upon the first impression. But, it actually offers a more user-friendly experience overall. Thus, the choice is all about your personal trading experience and starting level.

2. TradeStation vs. Interactive Brokers for Research Offerings

Interactive Brokers doesn’t quite offer a vast level of research offerings, yet. But, what it does do is give users much helpful fundamental insight. This is alongside new releases for Thomson Reuters and Dow Jones. It does have some high-quality analysis available from other investments research avenues. Plus, there's an option to integrate a third party to their platform. It’s worth noting - some such sources may need a paid subscription beforehand.

This is where TradeStation excels though! They favor themselves in the industry as a research powerhouse. This is all due to the masses of historical data which can be pulled from their vast database. They also offer enough information about how to use your trading resources. Alongside this, you can take advantage of their comprehensive education suite.

The Result: It’s a close one to call here. Both broker firms can supply you with some extremely important market data. But Interactive Brokers offer research for authoritative sources, TradeStation research has more variation.

3. TradeStation vs. Interactive Brokers for Security

TradeStation vs. Interactive Brokers - Security - Screen

Both TradeStation and Interactive Brokers are U.S. brokers. So, they follow domestic laws for financial regulation. This indicates that both offer a higher security overall. This is because the US has some of the most robust rules in the world!

Interactive Brokers is also a member of SIPC (Securities Investor Protection Corporation). This is as well as FINRA (Financial Industry Regulatory Authority). They also have an extra insurance program where clients can protect their funds up to $2.5 million.

TradeStation is also members of SIPC and FINRA. They too offer extra insurance to their clients. This covers up to $24.5 million and a firm limit for a total of $300 million.

The Result: Both brokers here are equally as hardworking. This is clear when it comes to making client security top priority. Thus, they draw here for their security features.

4. TradeStation vs. Interactive Brokers for Customer Support

Interactive Brokers offers a customer support channel. This differs for current clients and that of potential clients. It does this interactively every business day with weekends covered by email support. Email support is therefore 24/7 with this broker while weekdays you can talk via live chat as well.

TradeStation also offers support via email, phone, and live chat. It’s reachable during weekday business hours, with the odd department open on Sunday.

The Result: Both brokers offer an adequate level of support. Interactive Brokers goes slightly above here with 24/7 email support. Yet, TradeStation has some restrictions on business hours instead.

5. TradeStation vs. Interactive Brokers for Trading Asset Classes

Interactive Brokers pretty much cover all the financial assets traders need. This means they include all the different portfolio classes. It has a larger variety of tradeable assets. Here you can trade Forex, stocks, metal, mutual funds, ETFs, options, futures, and bonds.

TradeStation also covers a wide range of tradable assets. These again include those such as stocks, futures, options, bonds, mutual funds, and ETFs. Yet, they do not offer commission-free ETFs.

The Result: Perhaps a clear winner, Interactive Brokers offers many tradable financial assets. This is certainly when compared to that of TradeStation. This includes covering fields such as metals, Forex, and those commission-free ETFs. It’s also worth highlighting here how TradeStation is unsuitable to many traders. This is because of its inability to offer Forex.

Final Thoughts on TradeStation vs. Interactive Brokers

In concluding, the best choice here should suit your specific day trading activities. However, Interactive Brokers have a broader range of assets for all to trade on. Yet, their most significant advantage is that they offer Forex as well. If your trading endeavors include Forex, TradeStation will not support this. Thus, this may well be a clear-cut decision for you. 

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