Thinkorswim vs. Interactive Brokers

This under construction page provides a comparison of the popular online brokers thinkorswim and Interactive Brokers. This data is believed to be current as of October 20, 2009, but is not guaranteed to be perfect. I’m human and I make mistakes.

Thinkorswim options commissions were calculated using the company’s standard rate plan, while stock commissions calculated using per-share pricing. The company also has flat pricing of $9.95 per stock trade if you wish to use that. In addition, the company will match the commission plans of most online brokers.

Interactive Brokers’ stock commission are calculated using the bundled option. Option commissions are calculated with the assumption they are smart-routed, carry a premium equal to or above 10 cents, and in an account trading less than 10,000 contracts per month. The pricing gets cheaper as your volume increases.

Please keep in mind that most discount and online brokers’ commission and margin rates are negotiable for traders who move big volume. If you make hundreds or thousands of trades a month, you should be able to negotiate a sweet deal for yourself.

Now, there’s no question that Interactive Brokers is much, much cheaper than Thinkorswim. Nobody with a brain can deny that. So for very active traders, Interactive Brokers is a much better deal – especially for those trading many product classes across the globe. When you’re making thousands of trades a month, saving just a dollar per trade adds up to a lot of money.

But, and there’s always a but, all my research indicates that Thinkorswim’s customer service is far superior to Interactive Brokers’, and possibly the best in the industry. So if you’re not that active, Thinkorswim may be a better choice. For me, being able to get someone on the phone quickly is just as important as getting the best commission rate. Then again – I probably make just 6-7 trades per month.

Here’s a table comparing commission rates between the two. I know it looks like crap, but I’ll try to spruce it up a bit if I can find the right Wordpress plugin:

	Thinkorswim*	Interactive Brokers
Stock Commissions
100 shares	$5	$1
500 shares	$7.50	$2.50
1,000 shares	$15	$5
5,000 shares	$75	$25
Options Commissions
1 contract	$2.95	$1
5 contracts	$14.75	$3.50
20 contracts	$39.95	$14
50 contracts	$84.95	$35
100 contracts	$159.95	$35
1,000 contracts	$1,509.95	$70

Extras:

Thinkorswim Offers the Following Goodies:

• Account transfer rebate to cover ACAT fees up to $100
• High-Speed Internet Rebate for those who make 40+ trades or 4 million RT in   currencies per month
• 3 Free Mutual Fund Trades Per Month
• Free Stuffed Monkey

Interactive Brokers Offers the Following Goodies