thinkorswim (TD Ameritrade) vs Interactive Brokers 2020


Compare Interactive Brokers (TWS) versus TD Ameritrade thinkorswim (TOS): whose trading platform, charting, and mobile app are better?



Two Rivals: thinkorswim and Interactive Brokers


If you’re an experienced and active trader, you probably have already heard of thinkorswim and Interactive Brokers. Both offer many important trading services at very low cost. But perhaps one would be a better partner in your specific trading regimen. Here are the details:


Broker Fees


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Thinkorswim $0 $49.99 $0 + $0.65 per contract $0 $0
IB $1+ $14.95 $0.25+ per contract $0-$240** $30


Services


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Thinkorswim
IB


Promotions


TD Ameritrade/Thinkorswim: Get $0 commissions and ACAT fee reimbursement.

Interactive Brokers: Open account and get $200 for a friend you refer.



Brokerage Firm Backdrop


thinkorswim is a powerful desktop program owned and maintained by TD Ameritrade. Although thinkorswim isn’t the only trading resource TD Ameritrade offers, it is the one platform active traders use most frequently.

Similarly, Interactive Brokers offers multiple trading resources, one of the most salient being its desktop software Trader Workstation. TWS and thinkorswim have a lot of tools in common; but there are important differences between them.


What Can Be Traded on the Two Platforms


On thinkorswim, traders can buy and sell stocks, ETFs, closed-end funds, options, futures, and forex. Although TD Ameritrade offers bonds and mutual funds, they can’t be traded on the desktop system.

On Trader Workstation, the same investment vehicles that thinkorswim can handle can be traded. Moreover, Interactive Brokers has enabled its desktop software to trade warrants, contracts for difference, structured products, bonds, and global securities.


Software Overview


Both platforms are launched from the desktop. At the login screen, each program offers a demo mode in case you want to practice the software without risking real money. Because both are very complex, we definitely recommend choosing this option (frequently).

Once inside, neither platform is user-friendly. This isn’t all that surprising given the professional nature of these programs. TWS offers two layouts by default: Mosaic and Classic. We recommend trying each one.

thinkorswim has only one layout, although it can be adjusted by going to the Setup menu in the upper-right screen (noted with a gear icon), and then selecting Look and feel inside the menu. There are light and dark layout choices, and font sizes can be changed. Modifications can be saved to a template as well.


TOS vs TWS


Other Software


TD Ameritrade has a thinkorswim mobile app. As you might expect, this mobile platform has very advanced charting, a sophisticated order ticket, and other professional-level trading tools. The broker’s website itself provides a very good trading experience and includes a trade bar.

Interactive Brokers also has a very advanced mobile app. It incorporates two trading tickets, advanced graphs, and more. Like the thinkorswim app, it too has a simulated trading mode.

IB customers can use a client portal, whose trade ticket is enabled for whole-dollar investing. WebTrader is an HTML-based system that has low-level charting but an excellent trade ticket.


Security Research


Both TWS and thinkorswim deliver live streaming of financial news. In TWS’s case, it’s Bloomberg (oddly limited to just 15 minutes per day). On thinkorswim, TD Ameritrade offers CNBC and its own video network, aptly titled TD Ameritrade Network.


IBKR vs thinkorswim


For additional news, both platforms have widgets for news articles and upcoming economic events. thinkorswim’s economic calendar is color-coded, which makes it easier to use when sorting through splits, conference calls, earnings announcements, dividends, and other events.

Security screeners are available on the two desktop platforms and on the brokers’ websites. During our inquiry, we found TD Ameritrade’s web-based stock screener the easiest to use. However, it is only able to search the U.S. marketplace. For foreign securities, you’ll need to use Trader Workstation’s stock screener. TWS also has a bond screener, something that thinkorswim lacks.


TOS or TWS


For stock research, Interactive Brokers offers free reports from Zacks Investment Research. They are available on Trader Workstation and include trade recommendations and price targets. On the client portal, we found trade recommendations from TipRanks and many analysts, such as:

  • Goldman Sachs
  • Morgan Stanley
  • Argus
  • Raymond James
  • Mizuho Securities

Although stock reports can’t be accessed on thinkorswim, TD Ameritrade’s website does have them. We found pdf briefs from:

  • TheStreet.com
  • CFRA
  • New Constructs
  • Research Team
  • Ford Equity Research
  • Market Edge
  • Vickers
  • Credit Suisse


Pre-Market and After-Hours Trading


If you can’t trade during the regular session because you have a day job, no problem. You can trade early in the morning and late into the evening with either Interactive Brokers or TD Ameritrade.

IB’s early-bird session starts at 4:00 am, EST. Its late-night period ends at 8:00 pm. TD Ameritrade has the same after-hours session, but its morning session begins at 7:00 am. While this is a weakness, TD Ameritrade does offer overnight trading in several ETFs, a fantastic service that Interactive Brokers doesn’t have.


Level II Quotes


Level II data is available both on Trader Workstation and on thinkorswim. The one difference is that Interactive Brokers charges for the data. At TD Ameritrade, even professionals get Level II quotes for free.


Option Tools


Neither firm in this assessment has forgotten about derivatives. Option contracts can be traded on the desktop platforms and mobile apps. On TWS, we found eleven option strategies. Very small profit-loss diagrams are displayed with them. Nevertheless, the platform has many great derivative tools, including:

  • Probability lab
  • Strategy lab
  • Volatility skew
  • Greek values
  • And more

On thinkorswim, there are six spreads. And there are three main option tools:

Option Hacker looks for calls and puts.

Spread Hacker scans the entire U.S. stock market for the six multi-leg strategies.

And Spread Book scans a single stock for the spreads.

TD Ameritrade’s website has other option tools and research materials that we found easier to use.


Direct-Access Routing


Because Trader Workstation and thinkorswim are professional-level platforms, it should come as no surprise that direct-access routing is enabled by default. TD Ameritrade, however, provides just two routes for equity orders (besides the auto default); they are Nasdaq and Arca.

On Trader Workstation, we found no less than twenty destinations, including an algorithmic trading option.


thinkorswim vs IBKR


Maker-Taker Fees


With so many destinations, it shouldn’t be surprising that IB provides maker-taker fees (available only to IBKR Pro customers). TD Ameritrade does not offer this commission service.


Trading on Margin


Another big difference between Interactive Brokers and its rival here is in the margin arena. On Trader Workstation, margin details for each entered ticker symbol are shown. That is not the case on thinkorswim.

Margin rates are also very different. Both Pro and Lite customers at IB pay below 2.6%. TD Ameritrade, on the other hand, is currently at 7.5% to 9.5%.


Other Services


Dividend Reinvestment Program: TD Ameritrade and Interactive Brokers convert dividends into additional shares free of charge. However, at Interactive Brokers, it’s only possible to enroll an entire account.

IRAs: TD Ameritrade has more retirement accounts than Interactive Brokers.


Finally, Our Recommendations


Newbies: thinkorswim has a learning center on it designed for beginners. This in our mind tips the balance in favor of TD Ameritrade.

Stock Trading: Toss up.

ETF Trading: We pick TD Ameritrade for its extensive ETF hub on its website.

Options Trading: Trader Workstation is much better than thinkorswim.

Futures and Forex Trading: thinkorswim for its user-friendly dealing boxes.

Day Trading: Interactive Brokers.


Promotions


TD Ameritrade/Thinkorswim: Get $0 commissions and ACAT fee reimbursement.

Interactive Brokers: Open account and get $200 for a friend you refer.



Interactive Brokers vs Thinkorswim: Recommendation


Interactive Brokers has done an excellent job with Trader Workstation; and thinkorswim is a powerful platform in its own right. Because it’s possible to practice either one without opening an account, you have no excuse not to test drive each one.