Thanks to technological advancements, online traders have many advanced trading tools that they can use to streamline their active investment experience. However, not all of these tools are created equally.
Whereas the lowest-cost trading platform may provide the best value for money, it may also be lacking features—such as support for foreign stock trading or other types of investment assets—that could be essential to a trader.
That said, the most expensive platform could offer more features than a trader will actually use, resulting in them wasting value capital that would be better allocated in their investments.
Today, we’ll be taking a look at two of these online brokerages. Keep reading this TradeStation vs Thinkorswim comparison to find out which one comes out on top!
|TradeStation is Better for:||Thinkorswim is Better for:|
|US-based assets||Forex trading|
|Analysis & Analytics||Paper trading|
|Automated trading||Straightforward fees|
Both of these online brokers share many similarities that active traders can appreciate. For example, both services offer dedicated desktop platforms and a mobile app. They also support many of the same trade types, such as stock, ETF, and options trading.
|Free Features||Trading (most asset classes), real-time data, OptionStation® Pro,||Trading, charting, Level II quotes, simulated trading, screeners, drawing tools, research tools|
|Paid Features||Options, contracts, Portfolio Maestro||N/A|
|Annual Subscription Fees||$50 annual fee (N/A if account minimums are met)
Stocks, bonds, mutual funds, options, futures, ETFs, crypto
|Securities Analyzed||Stocks, bonds, mutual funds, options, futures, ETFs, crypto||Stocks, futures, options, ETFs, bonds, Forex, mutual funds, crypto|
|Best Use||Buy-and-hold trading||Trading with TD Ameritrade|
|Modest Money Overall Rating|
Factor 1: Free Features
Each financial product offers plenty of features for both active and casual investors. Basic free features include access to the mobile app, support for most types of trading, and free data.
TradeStation Offers More Tools for Free
- TradeStation supports commission-free stock & ETF trading
- Thinkorswim is free to use
- TradeStation offers free market data
Active investors who are invested in commission-free trading for stocks and ETFs (exchange-traded fund) will enjoy TradeStation. The platform has recently eliminated its requirement for minimum balances, and most features can be accessed for free.
However, certain types of trades (such as options contracts or cryptocurrency trading) will incur fees.
Thinkorswim offers a wide range of features for free, including mobile trading, access to the virtual trading simulator (which uses fake money). Notably, the platform gives users access to the foreign exchange. Many trades are commission-free, although—like TradeStation—certain asset types do incur fees.
Factor 2: Paid Features
Like most brokerages, both TradeStation and Thinkorswim charge trading fees, but are there any other charges you’ll need to watch out for? Let’s take a closer look and compare!
TradeStation comes out slightly on top
- TradeStation offers all features for free with a brokerage account
- Thinkorswim offers all features for free
- TradeStation supports backtesting
If you have a brokerage account then you won’t need to pay for access to the base version of the TradeStation platform. However, if you don’t, there is a monthly fee (which varies for consumers vs. “professionals”).
RadarScreen® and OptionStation® Pro are offered for free regardless, but without a brokerage account, you can expect to pay $59.95 per month for Portfolio Maestro® (TradeStation’s back-testing tool).
Fortunately, most experienced investors and advanced traders will already have a brokerage account, which means their only real conversions will be commissions (such as the fees on a futures contract).
Advanced traders will appreciate the fact that they can get complete access to Thinkorswim for free. However, the catch to this is that you will have to be a TD Ameritrade customer. There are also fees to consider, but we’ll be covering those in the following section.
Factor 3: Trading Fees
If you’re focused on a certain type of trading—such as options trading—then you’ll want to keep track of each and every trading fee you’re charged by trading platforms. Although the fees are relatively low and will be of little concern for institutional investors, as a retail trader, every fee counts!
Thinkorswim Has a More Straightforward Fee Struct
- Neither platform has a balance requirement to open an account
- TradeStation has a wide range of confusing fees
- Thinkorswim charges extra for IVR & broker-assisted trades
While stocks and ETFs may be commission-free, other trade types incur fees. Options cost $0.60-$1.50 per contract; futures cost $0.50-$1.50 per contract. Cryptocurrencies are charged as a percentage (which ranges from 0.25%-0.60%). You can find a complete list of all possible fees on the TradeStation website.
Learn More About TradeStation
Thinkorswim charges $0.65 per options contract, and futures contracts can cost up to $5 per trade. Forex trades will incur a $6.95 trading fee. Thinkorswim does not support cryptocurrency as of yet.
TradeStation vs Thinkorswim: Summary
For active traders who already use TD Ameritrade, Thinkorswim might be enough to meet their needs. It offers the essentials, it’s convenient, and it’s reliable.
However, if you don’t already trade through TD Ameritrade, we think TradeStation is the better option. While the fee structure is a bit confusing and it lacks forex support, the complex features (like backtesting and portfolio analysis) more than justify the additional expenses.
Head over to TD Ameritrade to make an account to use Thinkorswim, or click here to start enjoying commission-fee trading—complete with an array of trading tools—on TradeStation!