Online trading platforms have changed the brokerage business. Mobile apps give millions of consumer investors access to commodities and stock trades. Each one has different options, capabilities and areas of focus.
Two of the more popular trading platforms are compared in this post: Interactive Brokers vs. tastytrade (formerly tastyworks). Both offer convenient and easy trading but concentrate on different types of investing.
Interactive Brokers vs. tastytrade
Who is Interactive Brokers?
Interactive Brokers (IB) is an online brokerage firm preferred by many experienced investors. It offers a complete set of services and products, including its advanced trading platform. Investors are especially drawn to Interactive Brokers’ account services, research tools and educational resources.
- Low fees and commissions
- Advanced trading platform
- Focus on research and education
- Wide range of assets
- Operative in overnight trading
- May be too complex for beginner investors
- Difficult account opening process
- Slow customer service
Who is tastytrade (Formerly tastyworks)?
The newly named broker tastytrade is an online brokerage firm that focuses on options trades. Its features mirror other online investing resources, including mobile and desktop apps, educational and research tools and tutorials. However, tastytrade’s area of focus makes it attractive to options traders.
- Powerful and feature-rich
- Many strategies and order types
- Reasonable commission fees
- High-risk trading vehicles
- Can intimidate novice investors
- No paper or demo trading
Comparing Interactive Brokers and tastytrade
What factors distinguish these two trading platforms? Here’s a comparison of their features and policies.
Pricing and Fees
Interactive Brokers offers a broader range of services with different commission setups. For example, trading stocks or exchange-traded funds (ETFs) incurs a commission of $0.005 per share, with a $1 minimum fee and a maximum of 0.5% of total trade value. Options trading costs $0.70 per contract with a $1 minimum fee. Volume discounts are available for stock and options trading only.
Investors who use the tastytrade platform must focus on stock and futures options trading. Stock options cost $1 per contract, and future options charge $2.50 per contract. Once the options are converted to shares, there’s a $5 flat fee to open stocks and a fee of $1.25 per contract to open futures.
Closing out on futures costs $1.25 per contract. Users incur monthly inactivity charges for low-level, low-volume accounts.
Winner: Both platforms charge reasonable fees, but Interactive Brokers charges slightly lower fees for options trading.
Interactive Brokers and tastytrade were designed to fit the needs of experienced traders. Both provide desktop and mobile trading tools.
Interactive Brokers’ desktop app, Trader Workstation, is built for professional traders. It’s powerful but is so intensive and feature-heavy that it will likely intimidate beginning, novice and even some sophisticated investors. IB offers a different app, WebTrader, for less experienced traders.
The tastytrade desktop platform is more or less a requirement for those who use the service. It’s a self-contained, complete trading terminal with a user-friendly interface and fast execution on orders. There’s also a browser version with similar features, but it’s markedly slower with order execution. Rich features and visualization abilities characterize tastytrade’s mobile app.
Winner: Both brokerages cater to experienced traders. Based on its more streamlined look and feel, tastytrade earns a slight nod.
To use either platform’s brokerage services, investors need to be well-seasoned traders. Options trading, in general, is only recommended to the most experienced investors in the marketplace. However, Interactive Brokers and tastytrade have educational modules for investors to learn about trading.
Both services provide articles, video tutorials and webinars with qualified educators and market professionals. Interactive Brokers hosts an organized education center on a wide range of topics for both new and experienced traders. tastytrade, true to its business focus, primarily offers education on options trading.
IB also allows for paper trading accounts, which let traders simulate and practice transactions without real money. While tastytrade has a trade simulator, it doesn’t support paper trading.
Winner: Offering a wider range of educational subjects and paper trading earns Interactive Brokers the advantage.
Interactive Brokers and tastytrade offer customer support via chat, email and telephone. Neither company has brick-and-mortar branches to visit live.
There’s one notable distinction between the two platforms in terms of customer service: live support availability. Interactive Brokers offers live chat and phone service 24 hours a day, Monday through Friday. It provides live support after and before business hours when forex and after-hours exchanges are open.
Live support on tastytrade is only available during domestic stock exchange business hours, so traders have no after-hours options for live chats or phone calls.
Winner: Thanks to its greater access to live interactions, Interactive Brokers wins in customer support.
Interactive Brokers allows investors exposure to an extensive range of investment vehicles. They include stocks, futures, options, ETFs, mutual funds, penny stocks, currencies and cryptocurrencies. IB works with exchanges all over the globe for over-the-counter (OTC) trading.
With tastytrade, traders can invest in stocks and options listed on the U.S. exchange. Its offers do not include forex, mutual funds or penny stocks. Until late 2022, tastytrade did not offer access to cryptocurrency, but its new tastycrypto brand allows users access to digital wallets and crypto assets.
Winner: Investors focused on options trading may find tastytrade to their liking, but Interactive Brokers has a wider range of offerings.
Interactive Brokers and tastytrade have mobile apps available for Android and iOS smartphone users. For what it’s worth, Interactive Brokers used to have an app for Windows phones as well. tastytrade did not.
The IB mobile app closely replicates its desktop cousin, which means it’s extraordinarily complex. However, it’s easy to navigate through various offerings, contract searches and visualizations. It should be noted, though, that Interactive Brokers only allows for three spreads.
The tastytrade app, on the other hand, is more streamlined and optimized than the desktop version. While it’s still designed for expert traders, its interface and visualizations are a bit easier on the eyes. Most importantly, the tastytrade mobile app allows users to use up to nine spreads.
Winner: Ease of usability and interface are the most important aspects of mobile apps, so tastytrade is the winner in this category.
Interactive Brokers and tastytrade have multiple account options and structures to offer traders. IB allows for single and joint accounts, including trusts, IRAs, corporations, partnerships, limited liability companies and unincorporated businesses. IB also offers margin accounts in all countries.
The account types tastytrade offers largely duplicate those from IB. Its margin account offerings break down to “Limited,” “Basic” and “The Works.” Only investors in the latter platform are allowed access to futures trading, and tastytrade maintains stringent requirements for investors who want to trade at that advanced and risky level.
Winner: Account structures between the two are very similar and typical of most online brokerages. This category is a tie.
Interactive Brokers vs. tastytrade: Who Wins?
Interactive Brokers and tastytrade offer robust services for experienced traders. Those without expert-level experience in trading may find both platforms too advanced for everyday trading. Thanks to its wider range of offerings, live support availability and comprehensive educational resources, Interactive Brokers wins this comparison.
Frequently Asked Questions
Are Interactive Brokers good for day trading?
Yes. Interactive Brokers’ transaction speed and low-margin trading rates support its use in day trading.
Why did tastytrade change its name?
The brokerage changed its name from tastyworks to tastytrade in 2023 to reflect the core business service it provides: options trading.
What is the difference between tastytrade and Interactive Brokers?
Interactive Brokers offers a complete range of trading services and products while tastytrade focuses primarily on options trading, stocks and futures.