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Interactive Brokers vs. Robinhood

If you want to compare trading simplicity with professional sophistication, your case study could be a side-by-side between Interactive Brokers and Robinhood. They’re two polar opposites but that proves to be a seriously interesting comparison.

Robinhood offers a quintessential everyone-can-trade solution and Interactive Brokers’ knotty platform tells quite the opposite story.

Overview

Broker Best For Commissions Account Minimum Choose your platform
Interactive Brokers
  • Forex traders
  • Professional traders
  • Frequent traders with a thirst for different order types (63!)
$0.005 per share minimum $1 and maximum 0.5% of trade value; volume discount available $0 for cash account, or a margin account with $2,000
Get started securely through Interactive Brokers's website
1 Minute Review

If you consider yourself a sure-footed professional trader, Interactive Brokers might be a major possibility for you, particularly if you’re adept at navigating tricky trading platforms (can you say 124 option indicators?) or have done more than just dipped your toe a “coupla times” into the complex world of international markets.

Pros
  • If you’re into trading on margin, you’re in luck. Interactive Brokers offers the lowest rates in the industry.
  • Low pay-per-share commissions on stock trades (up to 1,000 shares) and on options trades (up to 20 contracts)
  • Vast order types options for professional traders
Cons
  • Interactive Brokers charges account fees (including annual, transfer, closing an inactivity fees) and offers an extremely complex trading platform
Current Promotion

Lower minimum activity requirements ($3/month) and opening account minimum requirement ($3,000) for clients 25 and younger.

Robinhood
  • Low cost stock trading
  • Beginners looking to start trading
  • Investors on the go
Free $0
Get started securely through Robinhood's website
1 Minute Review

Robinhood is a free stock trading mobile app that serves both iOS and Android devices. They offer an easy to use interface and have excellent integrations to easily deposit money and begin investing.

Pros
  • Free trading for all stocks
  • Multiple integrations for banking deposits
  • No transfer out fees
Cons
  • Lacks research reports
  • Some features require premium paid upgrades
Current Promotion

Invite a friend and get a free stock

Who’s Interactive Brokers For?

Interactive Brokers is famous for its complex trading platform and advanced service. It’s a great trading partner if you’re a trading professional who has extensive trading experience. It is also a good solution for active investors and forex traders.

Read Benzinga’s full Interactive Brokers Review

Who’s Robinhood For?

Robinhood is exactly the opposite. It’s extremely basic and simple and its platform is heaven for the absolute beginner, as it contains no intermediate or advanced features. If you aren’t into charting and trading indicators, this is a good platform for you. If you are want to trade cryptocurrency, Robinhood has crypto squeezed tightly in its arsenal.

Read Benzinga’s full Robinhood Review

Platform and Tools

What Interactive Brokers Offers

As we say in every Interactive Brokers review, the most remarkable feature about Interactive Brokers is its super-advanced desktop platform Trader Workstation. TWS is anything but a basic trading platform. It’s an advanced platform that requires lengthy experience and proper training in order to use it.

Source: InteractiveBrokers.com

TWS is a multi-module system that contains many advanced features. If you want to reveal its full potential, you’ll need more than a single-monitor laptop. The software includes many charting elements and advanced indicators for high-quality technical analysis.

However, beginners are not fully left behind by Interactive Brokers. They can enjoy the web-based platform WebTrader, which is very basic compared to TWS. The platform is HTML-based and it is fully customizable. The platform still includes tools and features, but they aren’t as advanced as Interactive Brokers’ desktop solution.

Source: InteractiveBrokers.com

What Robinhood Offers

There isn’t much to write about on Robinhood’s trading platforms. Robinhood supports web-based, desktop, mobile and smartwatch platforms. Though there’s a range of devices, all look pretty much the same; they’re basic and easy to understand.

Every person can download them, start trading instantly and only support basic market orders. (It’s part of Robinhood’s plan to keep things as simple as possible.)

Source: Robinhood.com

Bottom Line

These two trading solutions offer totally opposite functionality. If you want a complex trading solution, sign up for Interactive Brokers and TWS. If you’re an absolute beginner and you simply want to buy and sell financial assets, then Robinhood will let you do it with simple screen taps.

Research Offerings

What Interactive Brokers Offers

Although Interactive Brokers includes some market research from Dow Jones and Thomson Reuters, it’s not very likely that this satisfies all highly-skilled traders. But if you really want to geek out and spend some money, you can integrate some third-party research sources in your TWS platform. One of these providers is Benzinga itself. Note that some of the third-party features are free, but most of the “good” ones involve a paid subscription.

What Robinhood Offers

Robinhood’s research is extremely limited, but this is normal, as it’s the company’s policy to keep its trading platform as simple as possible. You’ll find some analyst ratings, company information for your stocks and insights about the trading sentiment of other Robinhood investors.

Bottom Line

Interactive Brokers has a more flexible research section. Even though it’s basic, its third-party solutions give you the option to make it advanced. Robinhood, on the other hand, offers minimal market research and there’s nothing you can do to change it.

Commission and Fees

Interactive Brokers Fees

Interactive Brokers has a complex pricing structure, based on the amount you are trading.

FOPs and Futures

Fixed

  • From $ 0.15 / contract

Tiered System 

# Of Contracts Tiered Commission / Contract
<= 1,000 $0.85
1,001 – 10,000 $0.65
10,001 – 20,000 $ .45
20,000 < $ .25

Forex

Volume / month Commission (X Value of trade) Min order
<= $1,000,000,000 0.2 basis point $2
$1,000,000,001 – 2,000,000,000 0.15 basis point $1.50
$2,000,000,0001 – 5,000,000,000 0.1 basis point $1.25
$5,000,000,000 < 0.08 basis point $1

Options

Volume / month Commission / contract Min order
<= 10,000
Premium < $0.05 $0.25 $1
$ .05 <= Premium $0.50 $1
< $ .1 $0.70 $1
10,001 – 50,000
Premium < $ .05 $0.25 $1
$0.05 <= Premium $0.50 $1
50,001 – 100,000
All premiums $0.25 $1
100,001 <= Premium
All premiums $0.15 $1

 

Type of fee Cost
No-commission ETF contracts $0
Interactive Brokers transaction fee Lesser of 3% x the trade value or $14.95 / transaction

Warrants, ETFs, and Stocks

Fixed Comission:

  • $0.005 per share (min $1)
Commission tiered Commission / share
Volume / month ETPs, ETFs, Stocks, Warrants Min order Max order
<= 300,000 $0.0035 $0.35 1% x trade
300,001 – 3,000,000 $0.002 $0.35 1% x trade
3,000,001 – 20,000,000 $0.0015 $0.35 1% x trade
20,000,001 – 100,000,000 $0.001 $0.35 1% x trade
100,000,000 < $0.0005 $0.35 1% x trade

Margin rates

Balance Rates
<= 100,000 3.9%
100,000.01 – 1,000,000 3.4%
1,000,000.01 – 3,000,000 2.9%
3,000,000.01 – 200,000,000 2.7%
200,000,000.01 <= 2.7%*

*A surcharge of 1% based on the spread can apply if financing is not pre-arranged.

Robinhood’s Fees

This is where nobody can beat Robinhood. The upshot of every Robinhood review is that its trading solution is 100% free. This means no spread fees, no commissions, no platform charges no nothing! You put your money in and you’re ready to go with your free trades.

Robinhood operates as a subscription service. In addition to this fully-free plan, you can pay a monthly subscription of $6 per month and get Robinhood Gold. This premium membership lets you trade on a 50% margin. Your trades will still be free, though, and margin rates will not apply.

Bottom Line

Robinhood operates 100% for free. Interactive Brokers charges standard fees for the industry. Notice that Interactive Brokers has extremely low margin rates more than twice lower than its major competitors. These margin rates still can’t beat Robinhood, which doesn’t charge its client a margin rate at all.

Financial asset Interactive Brokers Robinhood
Stocks $0.005 / share Free
Options $0.15 – $0.7 per contract N/A
Mutual funds 3% X volume or $14.95 per trade N/A
ETFs $0.005 / share Free
Forex 0.08 – 0.2 base points X volume N/A
Cryptocurrency N/A Free

Security

What Interactive Brokers Offers

  • U.S.-based broker
  • Complies to tough domestic regulations
  • SEC regulation
  • FINRA/SIPC/FDIC member
  • SIPC insurance up to $250,000
  • FDIC insurance up to $2,500,000
  • Publicly traded on a stock exchange

What Robinhood Offers

  • U.S.-based broker
  • Complies to tough domestic regulations
  • SEC regulation
  • FINRA/SIPC member
  • SIPC insurance up to $500,000

Bottom Line

Both companies comply with tough regulatory requirements and take your security seriously. Yet, the difference comes with deposits above $500,000 as this is the top of the Robinhood’s SIPC insurance.

Customer Support

What Interactive Brokers Offers

One of Interactive Brokers’ disadvantages is that it doesn’t have a physical office for face-to-face meetings with clients. Interactive Brokers maintains dedicated customer support, however. You can chat with a rep via email 24/7. Its phone and live chat support are both offered 24/5.

What Robinhood Offers

These guys are hard to reach. Robinhood’s company policy is that it keeps service as minimal as possible, which keeps its services absolutely free. You can still reach Robinhood via phone or email, but you need to be patient. Robinhood exists only on the internet and you can’t reach anyone in person.

Bottom Line

Interactive Brokers manages a full-time support team, which is definitely not the case with Robinhood. In the end, when something goes wrong with Robinhood, you’re out of luck when it comes to immediate support.

Tradable Asset Classes

What Interactive Brokers Offers

Interactive Brokers offer a rich set of tradable assets:

  • ETFs
  • Options contracts
  • Bonds
  • Futures
  • Mutual funds
  • Warrants
  • Stocks
  • Forex
  • Cryptocurrency
  • Metals

What Robinhood Offers

Robinhood is basic here again, as it only offers stocks, ETFs, options and cryptocurrencies.

Bottom Line

Robinhood offers few tradable assets. In comparison, Interactive Brokers has an extensive set of financial assets available for trading.

Ease of Use

What Interactive Brokers Offers

Simplicity is not a word that’s synonymous with Interactive Brokers. Just the opposite, its full-stack trading Trader Workstation platform might look like the inside of an airplane’s cockpit. Its service appeals to highly-skilled trading professionals who want to extract the maximum from their trading provider. Beginners will still find some support from WebTrader and the mobile platform. Intermediate traders might struggle between TWS and WebTrader.

What Robinhood Offers

Robinhood equals simplicity its overall company mission. Its interface is so simple and basic, even a kid can handle it. Don’t forget that the major goal of Robinhood’s software is to let you open and close trades.

Bottom Line

Interactive Brokers is a professional trading and investing partner. Compared to its platform, Robinhood’s looks like an innovative IT solution rather than a trading broker, but Robinhood does what it promises — it gives free access to the financial markets.

Final Thoughts

Broker Best For Commissions Account Minimum Choose your platform
Interactive Brokers
  • Forex traders
  • Professional traders
  • Frequent traders with a thirst for different order types (63!)
$0.005 per share minimum $1 and maximum 0.5% of trade value; volume discount available $0 for cash account, or a margin account with $2,000
Get started securely through Interactive Brokers's website
1 Minute Review

If you consider yourself a sure-footed professional trader, Interactive Brokers might be a major possibility for you, particularly if you’re adept at navigating tricky trading platforms (can you say 124 option indicators?) or have done more than just dipped your toe a “coupla times” into the complex world of international markets.

Pros
  • If you’re into trading on margin, you’re in luck. Interactive Brokers offers the lowest rates in the industry.
  • Low pay-per-share commissions on stock trades (up to 1,000 shares) and on options trades (up to 20 contracts)
  • Vast order types options for professional traders
Cons
  • Interactive Brokers charges account fees (including annual, transfer, closing an inactivity fees) and offers an extremely complex trading platform
Current Promotion

Lower minimum activity requirements ($3/month) and opening account minimum requirement ($3,000) for clients 25 and younger.

Robinhood
  • Low cost stock trading
  • Beginners looking to start trading
  • Investors on the go
Free $0
Get started securely through Robinhood's website
1 Minute Review

Robinhood is a free stock trading mobile app that serves both iOS and Android devices. They offer an easy to use interface and have excellent integrations to easily deposit money and begin investing.

Pros
  • Free trading for all stocks
  • Multiple integrations for banking deposits
  • No transfer out fees
Cons
  • Lacks research reports
  • Some features require premium paid upgrades
Current Promotion

Invite a friend and get a free stock

If Interactive Brokers is an airplane, then Robinhood is just a hang glider you can still fly it, but it might not take you far. Like a hang glider, Robinhood is easier and cheaper to operate. The key question you need to ask yourself is this: What do you expect from your trading broker?

  • If you are an extreme beginner, Robinhood is a good fit, although Interactive Brokers can still cover your needs.
  • If you’re a highly-skilled professional, the TWS platform will meet your expectations.
  • If you’re an intermediate-level trader, neither Interactive Brokers nor Robinhood might be a fit.
  • If you want a bond, futures, mutual fund or forex broker, Interactive Brokers is the only option between the two, as Robinhood doesn’t offer these financial assets.
  • If you want to trade for free, Robinhood lets you trade 100% free. Interactive Brokers doesn’t.
  • If you want a piece-of-cake interface, Robinhood is your answer.
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