Quantopian vs. TradeStation

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Contributor, Benzinga
March 20, 2020

Open-source and closed-source coding both play major roles in online securities trading. Open-source software can be accessed by the public, so it is always changing. On the other hand, closed source software is proprietary and the code is closely guarded. The best software choice isn’t always obvious, and both open-source and closed-source software offer advantages. 

Quantopian is an open-source platform with a self-service environment for traders. TradeStation is a closed, one-source platform with the tools ready for you to use.

Both business models offer traders diverse opportunities to profit in the securities market. Dive into Benzinga’s matchup to determine which company is best for you.

securely through Quantopian's website

Who is Quantopian for?

Quantopian has the most appeal if:

  1. You’re an algorithm developer.
  2. You’re a beginner ready to use algorithms to create money-earning investment strategies.
  3. You represent an investment group or organization in need of an investing algorithm that promises good returns.

To the average trader, Quantopian is a different type of online trading business. Simply put, Quantopian is the Uber of the investing industry. It matches algorithm developers with individual investors to create a mutually beneficial relationship.

This Boston-based company creates crowd-sourced hedge funds by recruiting freelance quantitative analysts to develop algorithms to trade securities. The algorithm developers can either back-test, use or sell their strategies. Or they can lend them to institutional investors for a cut in the equity. 

Developers can enter completed algorithmic strategies in the company-sponsored contest called the Quantopian Open. Winning algorithms are matched with institutional investors and the investor members pay successful developer members a commission on their equity. 

The open-source platform attracts algorithm developers and wannabes by creating a well-equipped workspace with major support. Quantopian promises that almost anyone can venture into quantitative finance with its tools, data and free education for beginners. 

Quantopian’s platform is very hands-on. If you are non-techie who’s seeking a new venture, this may be an opportunity for you to become better at trading, stocks, options, mutuals, forex and other tradable instruments. If you stay on with Quantopian, you’ll discover novice developers can clone an algorithm from the Quantopian community. You can backtest ideas with a huge collection of data sets from the Quantopian algorithm library, tutorials and lectures. 

Best For
  • Futures Trading
securely through TradeStation's website

Who is TradeStation for? 

TradeStation is a discount broker for active traders and a leader in trading technology. Its web-based and desktop platforms provide a turnkey trading center with professional-grade tools to trade stocks, options, futures and cryptocurrency. 

TradeStation continues to maintain professional clients with its TS Select plan. For a premium fee, brokers get to benefit from the advanced capabilities of the TradeStation 10 Desktop platform. 

This online broker’s original product was the TradeStation desktop — a favorite among professional traders. Today even average traders can take advantage of this powerful platform. Take a look at TradeStation’s distinguishing features:

  • Scanner with custom screen
  • Matrix, including ladder trading
  • Radar screen with a real-time streamlined stock tracer featuring hundreds of customized columns
  • Walk-Forward Optimizer to test your strategy
  • EasyLanguage coding language, which allows you to code apps for your platform

TradeStation offers access to over 40 years of historical data on stock charts and offers 274 available studies you can adjust with EasyLanguage. 

The platform’s OptionStation Pro is its built-in tool for options trading and analysis. It can also create custom groupings and stream real-time risk levels. 

TradeStation Web offers a secure login through any web browser so you can check breaking news, monitor the markets, place a trade or manage your positions or account. It offers chart trading capabilities many platforms don’t. The web-based platform makes it easy to analyze stock charts and manage active positions. Both the web-based and desktop platforms accommodate futures traders and its equity tools can help you make smooth transactions. 

The mobile app — TradeStation Go — has full-day trading capabilities. The Matrix tool facilitates ladder trading, and the charts are full-service with after-hours visibility. TradeStation Go has over 43 optional indicators and real-time streaming quotes. TradeStation Go also offers the Futures Plus tool and unique abilities like custom strategy building, advanced contract analysis and risk management through greeks.

TradeStation is a closed-source software with a complete suite of tradable products, including cryptocurrency. It no longer offers Forex but still supplies all types of traders with over 80 futures contracts. TradeStation provides more than 2,000 ETFs and it pays 0.55% interest on your idle cash in your account. 

Quantopian Fees and Commission

Once you start comparing cost, Quantopian beats Tradestation — hands down. Everyone gets to play for free. There are no maximum usage fees or membership fees. It doesn’t even ask for donations. Quantopian provides all investment data for free. 

Quantopian claims its revenues come from its enterprise product, Quantopian Enterprise. The company still operates in the start-up phase. Quantopian was started with funding from private and corporate investors like Andreessen Horowitz, Bessemer Venture Partners, Khosla Ventures, Spark Castle and others. 

In fact, major investors have shown interest in the future of quantitative investing. Forbes Magazine ranked Quantopian 98th on its list of America’s most promising companies in 2014. Quantopian gives you the opportunity to break into the field free of charge if you want to explore an innovative form of investing. 

TradeStation Fees and Commissions

TradeStation’s rates are low compared to other discount brokers but it can be hard to pinpoint its fees and commissions. The main platform requires a minimum deposit of 2,000, which gives you access to the other 3 TradeStation platforms. TradeStation Go has a $0 minimum deposit.

It’s true that TradeStation offers $0 commission for most trades, it charges a per-share commission. The rate is $.01 per share for the first 500 shares — $0.006 per share after that. It requires a per order minimum of $1. This means you would pay $5 for a 500 share trade and $8 for a 1,000 share trade. Take a look at the table below for an idea of TradeStation’s pricing structure.

InstrumentCommission per TradeCommission per Share or ContractFee
Minimum DepositN/AN/A$2,000
Stocks$0$.01/500 shares$0
Options$0$0$0.50/contract + $14.95
Mutual funds$0$0$14.95
Futures Options$0$0$1.50/contract/side

To avoid a $99 per month account fee, casual traders must reach the minimum of trading 5,000 shares each month. Also, TradeStation waives the fee if you maintain an account balance of $100,000. Casual traders could have a hard time meeting these trading standards. 

Quantopian’s Research Offerings

Quantopian is flush with data. Its massive library offers equity data from exchanges in 57 countries. 

However, identifying equities can be a difficult task — there is no standard way of doing this. Quantopian simplies this task by mapping all data sets into a common group of identifiers called security identifiers (SID). 

Quantopian has a browser add-on called IPython Notebook so you can use charting and plotting tools to spot patterns in fundamentals and pricing data. It also allows you to learn new coding methods from shared notebooks of other users.

TradeStation’s Research Offerings

TradeStation is similar to its discount broker competitors — it doesn’t offer much research support. None of its platform options supply in-depth research but instead focus on trading action. 

TradeStation does provide backtesting, a full screening of stocks and options and streaming futures data, though there is no focus on research. 

Choose Between Quantopian and TradeStation

Quantopian and TradeStation are both big figures in online trading — but open- and closed-source software each offer completely different experiences. 

Quantopian operates within the quantitative investment environment. TradeStation works within the discount broker space. While Quantopian opens up its shop for its clients to explore and tinker around, TradeStation closes its proprietary doors and clients pay for quick, inexpensive trades. 

Rather than declaring a winner, it’s more important that you determine what is best for you. 

And you could choose both. Quantopian is unconditionally free. You can use Quantopian’s data and development tools to develop your own investment algorithms. Then you can access TradeStation’s instruments to carry out your investment strategy. Take a look at both players in this matchup to decide which is best for you.