TradeStation vs Robinhood 2023
If you’re looking at online brokers, one of the common features you’ll see is robo-advisor services. These are great for passive investors, but what if you’re an active trader? In that case, then you need to check out one of the trading platforms that offer commission-free trading!
Online brokers—like the two we’ll be comparing today—generally offer a lot to their users. Access to the stock market, ETF trading (exchange-traded funds), crypto trading, and options trading are practically standard features these days, but what makes each platform unique?
Find out the differences, advantages, and downsides of each platform in this TradeStation vs Robinhood review!
|TradeStation is Better for:||Robinhood is Better for:|
|Educational resources||No account minimum|
|Portfolio analysis tools||Cryptocurrency trading/td>|
|The experienced trader||Beginner investors|
These brokerage services share many of the same features to help you reach your financial goals, such as mobile applications and offering commission-free trades. However, one is designed with institutional investors and advanced investors in mind, coming equipped with a variety of portfolio analysis tools.
The other platform can be easily utilized by traders of any level, offers resources to improve your financial literacy, and is especially useful for making crypto trades.
|Free Features||Trading (most asset classes), real-time data, OptionStation® Pro, RadarScreen®, Portfolio Maestro (with a brokerage account), educational content||Commission-free trading, instant deposits (up to $1,000), margin investing (at 11%), options investing, IPOs, retirement accounts, banking solutions|
|Paid Features||Options, contracts, Portfolio Maestro (without a brokerage account)||4% interest rate on uninvested funds, increased Instant deposits, Morningstar research, Level II Nasdaq market data, margin investing (at 7%)|
|Annual Subscription Fees||$50 annual fee (N/A if account minimums are met)||$5 per month for Robinhood Gold|
|Securities Analyzed||Stocks, bonds, mutual funds, options, futures, ETFs, crypto||Stocks, ETFs, options, crypto, IPOs|
|Best Use||Buy-and-hold trading||Trading Individual Securities|
|Modest Money Overall Rating|
Factor 1: Free Features
To begin this comparison, we’ll first take a look at what each of these trading platforms has to offer for free. Generally speaking, paying for premium brokerage accounts is the fastest way to reach your financial goals.
However, if your financial situation doesn’t allow for it, using free resources may be the only way to make informed investing decisions. So, which service offers a better experience for free? Let’s see.
Robinhood is Practically Designed for Free Use
- Robinhood offers a seamless mobile platform
- TradeStation is free with a brokerage account
- Both platforms offer commission-free trades for stocks
The basic version of TradeStation is available for free, so long as you have a brokerage account. You’ll be able to conduct trading activity more effectively, thanks to the many technical indicators offered. With over 120 to utilize, TradeStation easily outperforms many alternative trading platforms in this regard.
Making trades on stocks and ETFs is free on the platform, as is RadarScreen®, OptionStation® Pro, and market data. However, trading other types of assets (such as futures or options contracts) will incur fees.
Robinhood is one of the best financial products for beginner investors and those on a budget. The platform supports a wide range of asset classes, and the highly-optimized mobile platform makes it easy to conduct trading activity on the go.
Like TradeStation, you won’t pay any commissions for stock trade once you open a brokerage account. Robinhood also offers commission-free crypto trading, although you’ll still have to pay a commission for options contracts and similar types of trades.
Factor 2: Paid Features
Now that we’ve briefly reviewed the free capabilities of both trading platforms, let’s see what you can gain access to if you’re willing to pay for it!
Robinhood Offers More Premium Benefits for Less
- Robinhood Gold charges a low monthly fee
- TradeStation charges add-on fees, not a membership
- Robinhood Gold gives access to Morningstar data & Level II data
Users can pay for a few different premium benefits on TradeStation. The main one you’ll likely be interested in is Level II data. Portfolio Maestro®, which is TradeStation’s backtesting software, is generally offered for free. However, if you’re using the platform without a brokerage account, you’ll need to pay monthly for access to the backtesting feature.
Robinhood offers a monthly membership plan, Robinhood Gold, which provides a variety of features that may be useful to the experienced trader.
The first benefit, larger Instant Deposits, is especially useful for investors who want to take advantage of commission-free trading but don’t have time to wait for a funding payment to clear.
Robinhood Gold members also gain access to margin investing at 7%—as opposed to the 11% offered with a free account—Level II Nasdaq data, and Morningstar research (one of the best educational resources).
Factor 3: Subscription Costs
Ongoing and one-off expenses are important to consider when comparing trading platforms. Let’s take a look at the differences between the two to find out which option will cost you less over time.
Robinhood is a Better Value
- Robinhood Gold is affordably priced
- TradeStation charges commissions for crypto trading
- Robinhood offers commission-free crypto trading
The entire TradeStation platform itself is free to use, on both the desktop and the mobile version. However, there are some add-ons that users can pay for to improve their experience. For example, Level II data costs $11 per month.
Users should also consider fees. Per-contract fees range from $0.60 to $1.50 per trade. However, other types of trades—such as cryptocurrency—are charged by percentage, instead of a flat fee per trade.
Robinhood Gold is an easy expense to plan for. Costing only $5 per month, you’ll never need to pay more than $60 per year for access to all of its premium features. That said, much like TradeStation, you still be aware that certain types of trades will incur fees.
Learn More About Robinhood
TradeStation vs Robinhood: Final Thoughts
Each one of these trading platforms has its place, but we think which option is “superior” really depends on who’s using them. Between the two online brokers, TradeStation offers data and analytical tools that Robinhood simply can’t match up to, making it the better option for advanced and/or institutional investors.
However, the average active trader will likely find that Robinhood Gold is the preferred option. Offering enough data to satisfy the retail trader, commission-free trades via Robinhood Crypto, and straightforward pricing, Robinhood is a platform that trades of any level can use successfully for a variety of trading styles.
That said, both of these online brokers are free to use (and entirely commission-free when you’re trading stocks) so it’s worth testing them out for yourself to see which one best fits your trading needs.