TD Ameritrade (TDA) and Interactive Brokers (IBKR) have been in the brokerage space since the 1990s. These two companies have consistently gained recognition for a platform of trading products, analytical tools, and technology.
In 2022, TD Ameritrade was recognized as top-rated for customer service, mobile, beginners, and investor education. Interactive Brokers have a long list of recognitions, such as top-rated for advanced options traders, advanced traders, advanced day traders, charting for day trading, day trading in general, fractional share trading, low margin rates, and ETF research. We think TD is the best choice for international trading and non-U.S. investors but it isn’t the ideal choice for futures trading.
The biggest differences between Interactive Brokers, TD Ameritrade, & Paradigm Futures are their fee structures and the amount of support they provide. The best option for futures trading is Paradigm Futures. The best option for other trading is TD Ameritrade.
On the other side of things, Paradigm Futures is new to the market, although they work with the oldest name in futures trading.
Below is a rating table of its usability, trade experience, range of offerings, order types, trading technology, and cost. As you can see, when comparing Interactive Brokers, TD Ameritrade, and Paradigm Futures, Paradigm Futures is the best option.
|Interactive Brokers||TD Ameritrade||Paradigm Futures|
|Range of Offerings||9/10||8/10||9/10|
This section is a brief touchpoint on the history of these brokers. We will cover the significant points, making this section short.
TD Ameritrade (TDA)
- 1975 – The Securities and Exchange Commission (SEC) prohibited the practice of fixed brokerage commissions.
- 1983 – The establishment of Ameritrade Clearing Inc., a central counterparty clearing broker.
- March 1997 – An initial public offering (IPO) paved the way to becoming a public company.
- 2009 – The acquisition of thinkorswim by the company.
- 2013 – The company launched its USD 250 million headquarters in Omaha, United States.
- October 2019 – The company introduced commission free for most online trades.
- October 2020 – Charles Schwab Corporation acquired TD Ameritrade.
- February 2023 – Charles Schwab began moving all TD Ameritrade customers to Schwab. Ameritrade customers can bring relevant information and documents, including ten years of transaction statements.
The 2009 acquisition of thinkorswim catapulted TD Ameritrade’s trading platform to the forefront.
Interactive Brokers (IBKR)
- 1977 – Thomas Peterffy resigned from his designing commodity trading software job. He bought a market maker seat on the American Stock Exchange (AMEX).
- 1978 – He formed his first company under the name T.P. & Co.
- 1983 – Peterffy pitched to computerize the options market.
- 1993 – The incorporation of Interactive Brokers Inc. as a U.S. broker-dealer.
- April 2014 – Interactive Brokers was the first online broker offering direct access to IEX. At that time, IEX was a private electronic communication network for trading securities.
- 2020 – Its customer base reached more than one million users. It also restricted the trading of several stocks during the GameStop short squeeze.
- 2021 – The company allows users to trade cryptocurrencies, such as Ethereum and Bitcoin.
Through these years, IBKR developed and innovated its technology since its first hand-held stock trading device. Sophisticated traders know IBKR for offering extensive product offerings, including foreign exchange, options, futures, and access to international markets.
Paradigm Futures is an independent brokerage company servicing end users, producers, and speculators across the globe. They help traders achieve the success they want while maintaining competitiveness. Jamie Gieseke and Kent Beadle are the key people in Paradigm Futures.
Gieseke understands the market factors, including technical and fundamental analysis of commodity markets. He enjoys working with end-users and producers looking to maintain solid purchases and sales. Gieseke also aids in decision-making and the risks involved.
Beadle is a series III licensed commodity broker with over 38 years of experience in the industry. He started his career in the Minneapolis Grain Exchange, dealing with the cash grain markets.
Beadle and Gieseke are the faces of Paradigm Futures.
Interactive Brokers and TD Ameritrade offer several amenities to their users and customers. These companies provide access to watchlists, streaming quotes, research, news, calendars, fundamentals, technical/charting analysis, market updates, and daily commentary. Their trading platforms are available in mobile, desktop, and web versions, making them accessible almost anywhere.
The flagship program of TD is thinkorswim, a sophisticated tool packed with features comparable to IBKR’s Trader Workstation. They also have more simple web platform than IBKR. Moreover, it has two helpful and powerful apps – one mirroring thinkorswim and one mirroring the web platform.
Interactive Brokers (IBKR) has two new platforms, which we have below.
- GlobalTrader – It is an application supporting cryptocurrency trading. It aids traders and investors in international market opportunities.
- Impact Mobile – An application designed to help investors whose interests are around environmental, social, & governance (ESG). These investors are keen to invest across the 90 international markets.
In addition to these two popular new platforms, IBKR has Trader Workstation, IBKR Mobile, and Client Portal.
TD Ameritrade has a smoother account opening process than IBKR, making it an advantage for customers wanting to open and fund an account via mobile or computer. It owes this advantage to the broker’s tenure on the retail side.
On the other hand, IBKR’s accounting opening process is more tedious and requires more time. IBKR has several offerings to its customers, making it an overwhelming experience for amateur users. Although they have already improved and streamlined this process, there is still more room for improvement.
Paradigm Futures provides 24-hour access to trade on your mobile phone or desktop if you have internet access. Transactions between 7:30 AM to 7:00 PM Central Standard Time (CST) do not have additional charges, while transactions outside this timeframe have a USD 3.00/filled contract night desk fee.
We give the edge to TD Ameritrade in the usability category because of the simple and smooth account opening processing. Moreover, their platform is more intuitive to use overall, partially because they have fewer offerings.
Trade Experience: Desktop vs. Mobile
We can divide trade experience further into two categories – desktop and mobile.
Interactive Brokers, TD Ameritrade, and Paradigm Futures have working desktop platforms. It has multiple features and good functionality, the qualities an investor would expect from a brokerage platform.
These platforms provide customization to the user, including but not limited to the following:
- Route orders
- Setup custom defaults
- Group orders
- Select tax lots
- Create specific trade orders to use as criteria
- Percent loss or gain
- Specific data pieces
Sophisticated and advanced traders and investors will find the experience satisfying. However, we noticed IBKR is evolving faster than Paradigm Futures and TDA because it continues to add markets, features, and assets to its platform. On the other hand, TDA is focusing on the final integration phase with Schwab as part of its acquisition.
All three brokers have excellent platforms, with functionalities surpassing their competition. Although TDA has a more modern look and feels than the other two, we rate this section a tie. IBKR is a more promising option for accessing more asset classes and international markets.
TD Ameritrade offers two options for mobile users – the TD America Mobile app for a simple user interface and the thinkorswim app for more active and sophisticated users. IBKR offers IBKR Mobile, an excellent application for delivering organization multi-exchange, multi-country, and product offerings in a single platform. IBKR also has GlobalTrader, an application with a streamlined experience designed for newer investors. Paradigm Futures also features a mobile application that is simple to use.
IBKR Mobile, Paradigm Futures, and thinkorswim app mostly replicate the workstations, with pages for watchlists, portfolios, and the ability to book order tickets. These applications also support several order types, including options strategy and conditional orders. Options strategies are either calendar and vertical spreads, condors using dropdowns, and butterflies. It is worth noting IBKR Mobile does not support chart drawings. However, it shows the order to cancel or change.
On the other hand, the drawing tools in TDA’s mobile app are accessible. The watchlist also syncs between mobile and desktop applications.
One notable limitation of thinkorswim is the lack of support for fixed-income trading. However, the said app lets users simultaneously log onto the mobile and desktop versions. On the other hand, IBKR and Paradigm Futures only allows users to log onto one platform at an instance.
With everything said, we think TDA’s thinkorswim app is the best choice for the mobile experience. It is easy to use and does an excellent job of copying the desktop experience.
Range of Offerings
Interactive Brokers, TD Ameritrade, and Paradigm Futures offer a wide set of asset types in the trading platform. These include the following typical ones:
- Long and short ETFs and stocks
- Mutual funds
- OTCBB issues
- Fixed income
- Foreign exchanges
- Single and multi-leg options
International exchanges between brokers have a huge gap, as TDA provides access to one international exchange, while IBKR supports 95 international exchanges and 200 countries.
TDA offers 70 pairs in 19 currencies, while IBKR offers 100 pairs in 24 currencies in foreign currency trading.
Although both brokers have distinct offerings, the clear winner for this section is IBKR. The sheer number of markets and products tradeable on IBKR’s platform is unrivaled by any other broker.
TD Ameritrade supports the typical order types, such as trailing stop orders, limit, market, and stop-limit. Its platform allows conditional orders, including but not limited to order-triggers-two (OTT) and one-cancels-the-other (OCO). It also supports late entry on stage orders, allowing investors to select the tax lot when placing orders.
On the other hand, Interactive Brokers support the same order types but go the extra mile by supporting more than 100 algorithms and order types on the TWS Pro platform. It allows users to combine OCO orders and logical conditions. It leverages margin cushion, volume, price, time, percent change, daily P&L, and other significant variables to create customized orders. The lite version of IBKR supports 25 different order types, including the ability to use the custom algorithm.
Paradigm Future has a similar feature set to TDA.
IBKR holds a clear advantage because it goes much further.
The excellent technology behind Paradigm Futures, TDA, and IBKR enables a smooth trading experience. These brokers can route and stage orders and allow automated trading strategies.
IBKR and TDA have portfolio margining and securities lending, a feature unavailable to Paradigm Futures.
With everything said, TDA has an advantage over Paradigm Futures and IBKR for trading technology.
Below is a table of the associated costs for TD Ameritrade and Interactive Brokers.
|Interactive Brokers||TD Ameritrade|
|Option for no base commission for trading penny stocks||No – users must pay base commission to trade penny stocks||No – there is a flat $6.95 commission on penny/OTCBB stocks|
|Option for no base commission for stocks and ETFs||Yes – users can trade stocks and ETFs with no base commissions||Yes|
|Transaction fee on no-load mutual funds with transaction fees||The fee is the lesser of 3% or $14.95 for US funds. Over 95% of offshore funds have a transaction fee of 4.95 Euros||Up to $49.95 for buys, $0 for sells|
|Recurring investment fees||No||N/A|
|Base commission for options||Yes||No|
|Cost per stock trade||$0.00||$0.00|
|Cost per options contract||$0.40||$0.65|
|Cost per futures contract||$0.55||$2.25|
|Broker-assisted trade fee||$30.00||$25.00|
|Volume-based options discounts (upon meeting a threshold)||Yes||No|
|Account closure fees||No||No|
All three brokers provide top-notch customer service to their clients with options in support, including live chat, phone, email, and a live broker (for a fee). The Frequently Asked Questions (FAQ) section is also helpful for quick assistance. Interactive Brokers highly recommend interacting with the chatbot first before trying other options. IBKR is also less efficient in handling calls than Paradigm Futures and TDA.
We give this point to TDA for overall customer service satisfaction in 2022. However, Paradigm Futures is close behind, having positive reviews from a large percentage of its customers.
Paradigm Futures, TDA, and IBKR meet industry standards for security. Neither has experienced a data outage or breach in the past year. They all offer biometric recognition and two-factor authentication for a more secure login experience. Security is likely the only category they are all a tie.