Tastytrade vs. Interactive Brokers: Which Broker Is Right for You?

Choosing a broker to trade options can be tricky. Is Tastytrade safe and beginner-friendly? Do Interactive Brokers’ advanced features suit professionals better? This article compares Tastytrade vs Interactive Brokers, checking their strengths, fees, and safety. Choosing between Tastytrade vs Interactive Brokers depends on your experience and trading style. Here’s what we think.

Key takeaways

• Both Tastytrade and Interactive Brokers are great for options traders, but Interactive Brokers offers more features and cheaper options commissions, while Tastytrade focuses on simplicity and U.S. markets.
• Tastytrade is best for options and futures traders seeking a simple, beginner-friendly platform.
• Interactive Brokers excels for professional traders with global access and advanced tools.

What Is Tastytrade?

Tastytrade (formerly known as Tastyworks) is a brokerage built specifically for options and futures traders. Founded by the creators of thinkorswim, it focuses on low-cost options trading, high-speed execution, and advanced order management tools.

When comparing Tastytrade vs Interactive Brokers, we feel Tastytrade is best for those who want simplicity in options trading.

Is Tastytrade Legit?

Key highlight: Is Tastytrade legit? Yes, we’ve tested the platform and believe it’s a trustworthy choice for options traders.

If you’re wondering, is Tastytrade legit?, we believe it is. Based on our experience, the platform is well-regulated and backed by IG Group, a publicly traded company. Tastytrade is a fully regulated broker under FINRA and the SEC, ensuring compliance with industry standards. Additionally, traders’ funds are protected under SIPC, offering up to $500,000 in coverage ($250,000 for cash claims). At the end of the day, for those still asking, “Is Tastytrade legit?” the answer is yes, especially for U.S.-focused traders.

Is Tastytrade Safe?

Key highlight: Is Tastytrade safe? Yes, from our experience, the platform meets industry security standards.

Is Tastytrade safe? We feel that Tastytrade is safe, based on our experience with its encryption and security protocols. The platform uses advanced encryption, secure account protections, and risk management tools. Unlike some brokers, Tastytrade does not engage in payment-for-order-flow (PFOF) for options, leading to more transparent execution. However, beginners should be aware that its risk controls could be more robust, especially compared to Interactive Brokers vs Tastytrade in this area.

What Is Interactive Brokers?

Interactive Brokers (IBKR) is a full-service brokerage catering to both professional and retail traders. Founded in 1978, IBKR is a publicly traded company (NASDAQ: IBKR) with a long-standing reputation in the industry.

Unlike Tastytrade, Interactive Brokers (IBKR) caters to traders who need advanced tools. In the Tastytrade vs Interactive Brokers debate, IBKR is known for its global reach.

Is Interactive Brokers Legit?

Key highlight: Is Interactive Brokers legit? Yes, this is a legitimate company with a good reputation (among its pros and cons) within the options trading community

Is Interactive Brokers legit? From what we’ve seen, absolutely. IBKR is a highly regulated broker, operating under FINRA, the SEC, CFTC, and various international regulators. It is a member of SIPC, protecting investors’ funds up to $500,000. As a publicly traded company with a strong financial position and decades of experience, IBKR stands as one of the most reputable brokerages in the industry.

This makes IBKR stand out in the Tastytrade and Interactive Brokers comparison for traders who prioritize strong regulatory oversight.

Is Interactive Brokers Safe?

Key highlight: Is Interactive Brokers safe? Yes, we believe it is one of the most secure brokerage platforms available today.

Is Interactive Brokers safe? We believe so. IBKR employs industry-leading security measures, including account protection, encryption, and customizable risk controls. Unlike many brokers, it offers FDIC-insured bank accounts for uninvested cash balances, adding an extra layer of safety. Its robust risk management tools, such as portfolio margin and advanced exposure monitoring, provide professional-grade security for traders managing large portfolios.

Tastytrade vs. Interactive Brokers: Key Differences

We believe that choosing between Tastytrade vs Interactive Brokers is anything but similar. Having used both platforms, we feel they cater to entirely different types of traders. When analyzing Tastytrade vs Interactive Brokers, the differences in their trading focus become clear.

Trading Focus

• Tastytrade: We feel Tastytrade excels at options and futures trading. The platform is intuitive and designed for managing complex strategies with ease.
• Interactive Brokers (IBKR): IBKR stands out with its multi-asset offerings like stocks, ETFs, forex, bonds, and options (which you may trade through our options screener).

Fees & Commissions

• Tastytrade: The flat-fee pricing is straightforward—$1 per contract to open, $0 to close, which is ideal for casual traders.
• IBKR: With tiered pricing as low as $0.25 per contract, we believe this is a better deal for high-volume traders.

Market Access

• Tastytrade focuses primarily on U.S. markets.
• We feel that IBKR’s global reach is a significant advantage, particularly for traders who need access to multiple markets outside the U.S. For traders who need international exposure, Interactive Brokers vs Tastytrade is an easy choice—IBKR provides access to 135+ global markets. Traders who need access to global markets often ask, “Is Interactive Brokers safe?” Given its regulatory oversight, we feel confident in IBKR’s security.

Margin Rates

• Tastytrade has competitive rates but isn’t the cheapest.
• IBKR wins here with some of the lowest in the industry, starting as low as 5.83%.

This is another point where Tastytrade vs Interactive Brokers shows clear differences, as IBKR offers some of the lowest margin rates in the industry.

Platform Usability

• We find that Tastytrade is beginner-friendly, but for those needing advanced order routing, IBKR might be the better choice.
• IBKR, while more complex, offers powerful, customizable tools that cater to professionals

Ultimately, the choice between Tastytrade vs Interactive Brokers depends on your trading style. If you’re primarily an options/futures trader who values simplicity, Tastytrade is a great pick. For those seeking global market access, lower margin rates, or advanced features, we believe IBKR offers more versatility.

Interactive Brokers vs. Tastytrade: Which Broker Is Best for You?

First of all, here is a table that summarizes the key differences between Tastytrade and Interactive Brokers:

When deciding between Tastytrade vs Interactive Brokers, it really depends on what you need. We think Tastytrade is a solid pick if your focus is on options or futures trading and you prefer a user-friendly interface. It’s straightforward, affordable, and tailored to simplicity.

However, we believe Interactive Brokers is the better choice if you trade multiple assets, need ultra-low margin rates, or want access to global markets. The platform is more advanced and offers extensive tools and data for professionals who require a comprehensive solution.

Fees & Commissions: Which Broker Is Cheaper?

While we really do not recommend choosing an options broker based on fees and commissions, it would also be dangerous to ignore how costs impact your trading. From our experience with both Tastytrade and Interactive Brokers, here’s how they compare:

Stock Trading Fees

• From our perspective, both brokers are equally appealing for stock investors. TastyTrade proposes $0 fees on U.S. stocks, while IBKR will generally ask for a few cents per share, depending on the market.

Options Fees

• Tastytrade charges a flat $1 per contract to open and $0 to close.
• Interactive Brokers (IBKR) offers tiered pricing, starting at $0.65 per contract, with even lower rates for high-volume traders. For active options traders, we think IBKR’s structure may save you more.

When comparing Tastytrade vs Interactive Brokers, we see Tastytrade as simpler and more predictable, while IBKR offers cost savings for high-volume and margin traders. Price-conscious traders with diverse portfolios might be better served by IBKR, but casual traders may prefer Tastytrade’s straightforward pricing.

Platform & Tools: Which One Offers Better Features?

The platform(s) you can use to trade is another essential factor when comparing Tastytrade vs Interactive Brokers. In fact, you’d be surprised to know how many potentially good options brokers fail to catch a good group of traders due to poor trading platforms. From our experience, both platforms serve very different types of traders.

Tastytrade Platform

Tastytrade offers a user-friendly platform tailored for options traders. Its intuitive interface simplifies trade execution, making it accessible for both beginners and experienced traders.

For those comparing Tastytrade and Interactive Brokers, platform usability plays a major role in choosing the right broker. If you are wondering, “Is Tastytrade legit?,” we believe that the platform delivers a simple, intuitive experience tailored for options traders.

IBKR Trader Workstation (TWS)

Interactive Brokers’ Trader Workstation (TWS) is designed for professional traders requiring a highly customizable platform. TWS supports paper trading, allowing users to practice strategies without financial risk.

Market Research: Tastytrade vs. IBKR

In the realm of market research, IBKR provides extensive resources, including real-time streaming news, comprehensive analyst research, and a wide array of market data. These tools are integrated into the TWS platform, offering traders in-depth insights to inform their trading decisions.

Conversely, Tastytrade emphasizes educational content, offering a variety of resources aimed at helping traders understand market dynamics and develop trading strategies

In summary, when comparing Tastytrade vs. Interactive Brokers, Tastytrade offers a straightforward platform ideal for options traders who prioritize ease of use and educational resources. In contrast, Interactive Brokers’ TWS caters to traders seeking advanced tools, extensive market research, and the ability to execute complex trading strategies.

Mobile Trading: Which App Is Better?

Of course, we cannot expect to have continuous access to our laptops, so mobile trading apps are essential. After testing both Tastytrade and Interactive Brokers, here’s what we found:

Tastytrade Mobile App

• Optimized for options and futures trading.
• The interface is clean and visually appealing, prioritizing simplicity for quick trades.
• However, it lacks advanced charting tools and customizable alerts, which may limit more technical traders.

Interactive Brokers (IBKR) Mobile App

• Mirrors its desktop platform with features for multi-asset trading, news integration, and stock alerts.
• Provides advanced charting and order types, giving a professional edge.
• Though packed with features, navigating the app can feel overwhelming, especially for beginners.

When weighing Tastytrade vs Interactive Brokers for mobile trading, we think Tastytrade’s app is better for straightforward options and futures trading, thanks to its ease of use and spread capabilities. On the other hand, IBKR’s app caters to traders who need detailed tools and access to multiple asset classes. If you prioritize simplicity, Tastytrade wins. For advanced functionality, we’d recommend IBKR.

So, when it comes to mobile trading in Tastytrade vs Interactive Brokers, it really depends on whether you prioritize simplicity or advanced features.

Bottom Line—Which Options Broker Do We Prefer?

When it comes to Tastytrade vs Interactive Brokers, we lean toward IBKR for most traders, but that doesn’t mean Tastytrade isn’t a great choice for the right person.

• If you want simplicity, you can reread the review starting from the “What is Tastytrade?” section and focusing on the features we highlighted on this broker.
• If you need advanced tools, then focus on IBKR starting from the “What is Interactive Brokers?” section. In short, as we told you, IBKR is better for professional traders, offering global market access, lower margin rates, and extensive research tools.

As for security, is Tastytrade safe? Yes, but its risk controls aren’t as advanced as IBKR’s. Is Interactive Brokers safe? We think so—it offers extra protection like FDIC-insured cash balances and extensive risk management tools.

the end of the day, is Tastytrade legit? And is Interactive Brokers legit? Absolutely. However, in the Tastytrade vs Interactive Brokers comparison, we strongly feel IBKR offers more flexibility, making it our preferred choice for most traders. For most traders, Interactive Brokers vs Tastytrade comes down to whether you value simplicity or a full-featured trading experience.