TradeKing vs. TradeStation: A Complete Brokerage Comparison

By Jordan Wathen Markets Fool.com

When you want to start investing, you'll find a number of brokerages that would be happy to have you as a customer. But selecting the best brokerage out of the pile isn't easy to do, especially given the many ways in which they can differ from one another. Below, we'll compare just two well-known brokers, TradeKing and TradeStation, to show you how they compare on features and functionality that are most important to long-term investors.

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Trading costs and commissions

Online brokerage rose in popularity thanks to their ability to drive down prices. Today, investors pay less than $10 to place most trades through discount brokers, a huge savings from the cost of full-service brokerage firms. Here's how TradeKing and TradeStation compare on the basis of trading commissions.

Broker

Stocks/Options

ETFs

Mutual funds

TradeKing

$4.95 per trade + $0.65 per options contract

$4.95 per trade

$9.95 per purchase

TradeStation

$8.99 per trade + $0.70 per options contract

$8.99 per trade

$14.95 per purchase

Source: Company websites

Pricing varies minimally between brokerages, with a few dollars and cents making up the difference in trading costs. Notably, the gap may be smaller than it appears. TradeStation reduces commissions for high-volume traders. Brokerages also provide special offers in the form of commission-free trades and cash bonuses, which can reduce your total trading costs.

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Account minimums

Some brokerages require a minimum initial deposit in order to open a brokerage account. TradeStation requires a minimum deposit of $5,000 for traditional accounts, or $5,500 for IRAs. TradeKing is a no-minimum brokerage, and thus it doesn't have any requirements about how much you deposit to get started.

Trading platform

As long-term investors rather than traders, we at The Motley Fool tend to hold our investments for years or decades, and generally prefer to buy and hold rather than rapid trading. As a result, we don't really push a platform to its limits -- virtually any broker can live up to our very infrequent trading needs.

If active trading is more your style, and a platform is particularly important to you, then it's worth giving a broker's platform a test drive. Many brokers provide demo accounts through which you can see if a platform is a good fit for you.

We tend to think that trading platforms can be useful, but they can also be distractions to a long-term investment philosophy. Image source: Getty Images.

International stocks and ADRs

Want to invest overseas? Many brokers allow you to invest all around the world, with just a few exceptions. Here's how TradeKing and TradeStation compare on international investing choices.

Investments

TradeStation

TradeKing

American Depositary Receipts (ADRs)

Yes

Yes

International stock markets

No

No

ETFs/Mutual funds of foreign stocks

ETFs and mutual funds

ETFs and mutual funds

Source: Company websites

Both brokers allow you to invest in ADRs and funds of foreign stocks. However, when it comes to placing trades directly on foreign stock exchanges, neither broker currently offers that capability. Admittedly, only a handful of brokers allow you to trade directly on international stock exchanges.

Research quality and tools

We think investors can benefit from having access to research and second opinions. Both TradeKing and TradeStation provide free research capabilities to their clients.

TradeKing offers technical and fundamental stock screeners, S&P stock reports, and its own Breakfast Bell reports before market open. TradeStation offers similar stock screeners, Morning Market Briefing reports on every trading day, and weekly stock and ETF reports. We could go on and on here -- we've just scratched the surface of what each broker has to offer -- but suffice it to say that individual investors can find plenty to like at either brokerage.

Mobile app reviews

If you have an internet connection, you can now trade from just about anywhere with mobile trading applications. Here's how users and clients of each broker rated their iOS and Android apps (as of 1/03/2017).

Broker

Apple App Store

Google Play

TradeKing

1.0 star

4.0 stars

TradeStation

3.5 stars

4.5 stars

Source: Relevant app stores

The better brokerage: TradeKing or TradeStation?

Depending on your needs, TradeKing or TradeStation could be a good fit. TradeKing's lower standard commission prices and lower minimum account sizes may be better suited for less active investors, or those just starting out. TradeStation's volume discounts may make it a better fit for active investors who don't mind its higher initial deposit requirements.

Ultimately, there isn't just one brokerage for every type of investor. It's all about finding the best mix of features and functionality to fit your portfolio. To be clear: The Motley Fool doesn't endorse any particular broker, but we can help you shop around. Visit Fool.com's Broker Center for a comparison of features and special offers for traditional brokerage accounts. The Fool.com IRA Center is specifically designed with the retirement saver in mind.

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