Ally Invest vs. TradeStation: A Complete Brokerage Comparison

This article was updated on Feb. 12, 2018 and originally published Jan. 4, 2017.

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, Ally Invest (formerly TradeKing) and TradeStation, to show you how they compare on features and functionality that are most important to long-term investors.

Trading costs and commissions

Online brokerages rose in popularity thanks to their ability to drive down prices. Today, investors pay less than $5 to place most trades through discount brokers, a huge savings from the cost of full-service brokerage firms. Here's how Ally Invest and TradeStation compare on the basis of trading commissions.

Source: Company websites

Pricing varies minimally between brokerages, with a few dollars and cents making up the difference in trading costs. The gap in pricing may be even smaller than it appears. TradeStation reduces commissions for high-volume traders, particularly those who choose to pay commissions on a per-share or per-contract (options) basis. Likewise, Ally reduces its commissions to $3.95 per trade (and $0.50 per options contract) when its clients make more than 30 trades per quarter or keep more than $100,000 in their account. Brokerages also provide special offers in the form of commission-free trades and cash bonuses, which can reduce your total trading costs.

Account minimums

Some brokerages require a minimum initial deposit in order to open a brokerage account. Ally Invest is a no-minimum brokerage, and thus it doesn't have any requirements about how much you deposit to get started. TradeStation reduced its minimum to $500 for cash accounts and $2,000 for margin accounts.

You won't have to break the bank to open an account at Ally Invest or TradeStation. Image source: Getty Images.

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 investing to 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 your personal needs.

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 Ally Invest and TradeStation compare on international investing choices.

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 Ally Invest and TradeStation provide free research capabilities to their clients.

Ally Invest offers technical and fundamental stock screeners, as well as streaming quotes and other helpful tools through its online interface. 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 Feb. 12, 2018.)

Source: Relevant app stores

The better brokerage: Ally Invest or TradeStation?

Depending on your needs, Ally Invest or TradeStation could be a good fit. Ally Invest's lower standard commission prices and lower minimum account sizes may be better suited for less active investors, or those who are just starting out. TradeStation's volume discounts may make it a better fit for active investors who don't mind its $500 initial deposit requirement.

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.