Tastytrade versus Interactive Brokers: compare IRA, commissions, investing fees, trading tools, account differences, pros and cons. Which online broker is better?

Interactive Brokers vs. tastytrade Introduction

Experienced traders often choose Interactive Brokers for its advanced software and wide range of services. Could tastytrade provide them with a better experience? Let’s have a look.

Comparison Table

Investment Lineups

tastytrade offers the following asset classes for trading inside of self-directed accounts:

• ETF’s
• Closed-end funds
• Options
• Stocks
• Futures
• Options on futures
• Cryptocurrencies

Interactive Brokers offers everything on this list plus the following asset classes:

• Mutual funds
• Bonds and other fixed-income vehicles
• Precious metals
• Warrants
• Structured products
• Forex

Interactive Brokers, but not tastytrade, offers access to several foreign exchanges.

Robo accounts are available through Interactive Advisors, an affiliate of Interactive Brokers, that trade low-cost ETF’s. tastytrade does not offer managed accounts.

Margin Accounts

Both cash and margin accounts are available at both investment firms in this competition. At Interactive Brokers, it’s possible to upgrade an existing cash account to margin status. At tastytrade, this is not allowed; consequently, a new margin account must be opened to gain margin privileges.

Both broker-dealers offer portfolio margin. tastytrade requires $175k, while Interactive Brokers requires $110k.

Interactive Brokers displays margin requirements for entered ticker symbols. tastytrade’s software does not do this.

The cost of borrowing at Interactive Brokers is quite reasonable. Currently, IBKR Lite customers pay a flat 6.83%. tastytrade clients pay margin interest on a tiered schedule that starts at 11% and ends at 8%.

Websites

Interactive Brokers and tastytrade have decent websites with several account management tools. These include links to add beneficiaries, transfer funds, and to establish communication preferences.





For actual trading, tasty has a platform that launches from the website (look for the Trading Platform link at the top of the site). Features we especially like include:

- Trade ticket with multiple interfaces
- A Follow section that displays trades of tasty insiders
- tastylive, an educational platform with video commentary





The biggest downside of tasty’s web-based platform is rudimentary charting. This problem is solved at Interactive Brokers. Although it doesn’t have a discrete platform, advanced tools are integrated into the site itself, and charts have many tools. These include indicators, drawing gadgets, and a full-screen mode. Very extensive equity research is icing on the cake.

Mobile Apps

The tastytrade mobile app does make some improvements over its website. For example, bracket orders are now integrated on the trade ticket. Charting can be accomplished in full-screen mode horizontally, and there are several integrated option spreads. tastylive makes another appearance, and there are many pre-installed watchlists.





The Interactive Brokers app has many of the same features, like watchlists, bracket orders, and option spreads. However, we found fewer spreads (nine versus three), although there is a step-by-step strategy builder on the IB app. It also has simulated trading, which the tasty app lacks, and very good charting tools. To top it all off, IB’s app has an Artificial Intelligence named iBot.

Desktop Software

iBot makes another appearance on Trader Workstation, which is Interactive Brokers’ very sophisticated desktop software. It offers access to global exchanges across many asset classes, like warrants and futures. There are dedicated dealing boxes for currency trading, and we really like the platform’s order ticket. It has many advanced features, including adaptive and snap orders, a margin checker, and hot keys.





Option tools are very advanced on TWS as well. During our investigation, we found a probability lab, a strategy workspace, a volatility widget, and a strategy builder.

tasty’s desktop program doesn’t have a name but it does have good charting (it is the lone platform at tasty to have decent charting). Features include indicators, drawing tools, and a full-screen mode.





There is a multi-chart trade window that displays up to 4 graphs with order tickets below them. Other useful resources include watchlists, alerts, and news articles, but the software just doesn’t live up to the standard established by Trader Workstation.

Day Trading

PDT Reset: A pattern day-trading account can be reset at both IB and tastytrade. Interactive Brokers’ software, but not tasty’s, shows how many day trades an account has before hitting PDT status.

Direct Access to Venues: Only available at Interactive Brokers on Trader Workstation.





Extended-hours Trading: Possible at either firm. Interactive Brokers offers more hours in both pre-market and after-hours periods.





Level 2 Quotes: Trader Workstation has them.

Shorting: It’s possible to take a short position at either firm. Only tastytrade has a discrete sell short button. Interactive Brokers has better short resources, including a list of stocks that are available for shorting.

Maker-Taker Fees: Interactive Brokers offers fees and rebates for some order types.

Extra Services

Fractional Shares: It’s possible to buy equities and ETF’s in whole dollars at Interactive Brokers. Cryptocurrencies trade in whole dollars at both firms.

IPO Access: Neither brokerage firm in this comparison offers Initial Public Offerings.

IRA Service: It’s possible to open an Individual Retirement Account at either firm. tastytrade does charge $60 to close an IRA.

Dividend Reinvestment Plan: Interactive Brokers clients can reinvest cash dividends from stocks as additional shares. tastytrade offers the service for both stocks and ETF’s.

Cash Management: A Mastercard debit card can be attached to an Interactive Brokers account. This is not possible at tasty.

Periodic Mutual Fund Investing: Neither broker-dealer offers this.

Promotions

Tastytrade: Get $250 for each person you refer with this referral link.

Interactive Brokers: Get up to $1,000 in IBKR stock with this referral link!

Interactive Brokers vs Tastytrade Summary

Both brokers are great for active traders, and tastytrade has a slight edge over Interactive Brokers.

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Open Interactive Brokers Account

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