Explore TD Ameritrade vs. Robinhood for options trading. From tools to fees, find out which platform meets your trading needs.
Choosing the right platform for options trading can be a key factor in your success. If you’re comparing TD Ameritrade and Robinhood, you’re considering two of the most popular options in the market. But which one is better for your trading style? Let’s take a look at the features each platform offers and break down their differences to help you decide.
1. Account Minimum and Fees
TD Ameritrade:
TD Ameritrade does not require a minimum deposit to open an account. It charges $0.65 per options contract and $2.25 per contract for futures, though there are no commissions for stocks or ETFs. The platform’s fees are standard for industry offerings, and it provides a broad range of investment products.
Robinhood:
Like TD Ameritrade, Robinhood has no account minimum, and it doesn’t charge commissions for stocks, ETFs, or options. Robinhood also offers a fee-free model for options trades, although it charges $5 per month for its Robinhood Gold account, which provides margin trading at a lower rate (6.25%) compared to the standard 12%.
Winner: Draw
Robinhood offers a fee-free structure that could make it more attractive for traders focused on low costs. However, TD Ameritrade’s fees are in line with industry norms, and its comprehensive services make the cost difference less of a concern.
2. Usability
TD Ameritrade:
TD Ameritrade’s platform is flexible and customizable. It works well on both desktop and mobile, giving users a clean, easy-to-navigate experience. You can personalize your dashboard with market news, account balances, and more. While the mobile app is convenient and feature-packed, it may not offer every tool available on the desktop version.
Robinhood:
Robinhood keeps things simple. Its app is designed to be easy for anyone to use, making it a good choice for beginners or traders who prefer a straightforward experience. However, the simplicity means it lacks many advanced features that more experienced traders might look for.
Winner: TD Ameritrade
TD Ameritrade’s versatility makes it the better option for those who need flexibility and more tools, while Robinhood is better for those who prefer simplicity.
3. Trade Experience
TD Ameritrade:
TD Ameritrade’s thinkorswim platform offers some of the most powerful tools available. It includes advanced charting, technical analysis, and custom indicators. You also have the ability to place a variety of order types, including one-triggers-others (OTO), which is useful for complex strategies.
Robinhood:
Robinhood keeps trading simple with basic features like market orders and limit orders. It doesn’t provide advanced charting or technical analysis, which makes it less suitable for experienced traders who rely on these tools.
Winner: TD Ameritrade
TD Ameritrade leads in trade functionality, offering more customization and features for advanced trading.
4. Range of Offerings
TD Ameritrade:
TD Ameritrade supports a wide variety of asset types, including stocks, ETFs, mutual funds, options, futures, and forex. This makes it an ideal platform for traders who want a range of investment options and the ability to diversify their portfolios.
Robinhood:
Robinhood focuses on stocks, ETFs, options, and cryptocurrency. It doesn’t offer mutual funds or futures, which can be a limiting factor for traders looking to explore different asset classes.
Winner: TD Ameritrade
TD Ameritrade offers a much broader range of investment options, making it the preferred platform for traders seeking variety.
5. Order Types
TD Ameritrade:
TD Ameritrade provides a full set of order types, including market, limit, stop-limit, trailing stop, and conditional orders like OTO. These options are essential for traders who need flexibility in executing complex strategies.
Robinhood:
Robinhood supports basic order types: market and limit orders. It does not have advanced options like conditional orders, which could be a drawback for traders who require more control over their trades.
Winner: TD Ameritrade
TD Ameritrade offers more order types, making it better suited for traders who need flexibility.
6. Trading Technology
TD Ameritrade:
TD Ameritrade uses advanced order routing technology that ensures fast execution times. Orders typically get processed in less than 0.04 seconds, and the platform offers features like backtesting so traders can test strategies using historical data. TD Ameritrade also has a strong price improvement rate for orders, meaning traders often get better execution prices.
Robinhood:
Robinhood’s order routing system uses market makers for order execution, with price improvement of $0.0174 per share. However, the platform doesn’t offer backtesting or demo accounts, which may be a limitation for traders looking for more robust analysis tools.
Winner: TD Ameritrade
TD Ameritrade’s more advanced technology and superior order execution make it a better choice for active traders.
7. Research Amenities
TD Ameritrade:
TD Ameritrade offers a wide range of research tools, including detailed charting, screeners, technical analysis, and third-party resources. Its social sentiment tool helps traders gauge market trends, and it also provides calculators and other useful resources.
Robinhood:
Robinhood offers basic research tools, such as simple charts and analyst ratings. However, it lacks the advanced screening tools and detailed research options that TD Ameritrade provides.
Winner: TD Ameritrade
TD Ameritrade offers a more comprehensive suite of research tools, making it the better option for traders who rely on in-depth data.
8. Costs and Fees
TD Ameritrade:
TD Ameritrade charges $0 for stocks, ETFs, and options trades, though it charges $0.65 per options contract. Its fees are competitive compared to other industry leaders and are well-suited to active traders.
Robinhood:
Robinhood is still known for its fee-free trading structure, which applies to stocks, ETFs, and options. Robinhood’s costs are ideal for beginners or casual traders who don’t need advanced features, though the $5/month Robinhood Gold fee may apply if you want margin trading.
Winner: Draw
Both platforms offer low-cost trading, but if you’re new to trading or you’re only making a few trades, Robinhood’s fee-free structure may be more appealing. However, TD Ameritrade’s pricing is competitive, especially for traders who require more sophisticated tools.
Final Thoughts
TD Ameritrade is the better choice for experienced traders who need advanced tools, research options, and a range of asset types. Its powerful trading technology and versatile platform provide everything a serious trader would need.
Robinhood, on the other hand, is a solid choice for beginners and casual traders who prefer simplicity and lower costs. While it may not offer the same depth of features as TD Ameritrade, its user-friendly design and fee-free structure make it an excellent option for those just starting out.
Winner: TD Ameritrade
For those who need advanced features and more flexibility in their trading, TD Ameritrade stands out. However, for those who prefer simplicity and minimal costs, Robinhood remains a great choice.
