TradeStation vs. Robinhood: Which Broker Is Right for You?

If you're looking to start trading stocks, you'll need a brokerage account. Two popular and technology-focused choices are TradeStation and Robinhood, although there are some big differences between the two platforms. In this comparison, we'll take a look at the similarities and differences between TradeStation vs. Robinhood so you can decide if one of these might be right for you.

Robinhood is known as the low-cost brokerage leader, so it shouldn't be a big surprise that its pricing is generally lower than TradeStation's. Both offer $0 commission stock and ETF trades, but Robinhood is one of the only places where you can trade options and cryptocurrencies with no fees.

That said, we wouldn't exactly call TradeStation expensive. Its standard options commission of $0.60 per contract is on the lower end of the spectrum among its peers, and TradeStation's cryptocurrency fees of 0.05% to 0.30%, depending on the account balance, are among the lowest we've seen.

As you'll see as we go on, TradeStation has a greater variety of account types and investment products than Robinhood, so it's not possible to make a direct comparison for all fees. For example, TradeStation charges a standard mutual fund commission of $14.95, which is relatively cheap compared to most brokers we've reviewed, while Robinhood doesn't allow mutual fund trading at all. TradeStation also offers competitive commission rates on futures and bonds, while neither of these are supported on Robinhood's platform.

Both platforms are designed for traders, but not necessarily for long-term investors or people who want all of their investments in one place. And there are some big differences between the investment types offered by these two brokers.

Both offer stocks, ETFs, options, and cryptocurrencies. However, TradeStation doesn't offer fractional share investing, while Robinhood does. This can be a big perk for newer investors -- for example, if Amazon stock is trading for $3,000 per share, you would need at least this much free cash to add Amazon to your TradeStation account. With Robinhood, you can invest in an expensive stock like Amazon with just a few dollars.

TradeStation offers mutual funds (although the selection isn't great), and it also offers the ability to invest in bonds. One of the big differences, and something that TradeStation focuses on, is the ability to trade futures and other related instruments (like options on futures).

LEARN MORE: Best Options Trading Platforms

Robinhood offers individual, standard (taxable) brokerage accounts, traditional IRAs, and Roth IRAs. If you want to open a joint account with another person, or open an UGMA or UTMA custodial account for a minor, you can't do it through Robinhood.

On the other hand, TradeStation supports traditional and Roth IRAs, as well as SEP IRA and SIMPLE IRA accounts for qualifying self-employed clients. It offers the ability to open a brokerage account jointly with as many as three owners. And you can open a custodial account for a minor.

LEARN MORE: Best IRA Accounts

Both offer margin accounts (the ability to invest with borrowed money). Robinhood offers margin investing to all members, though it reserves its best rates for Robinhood Gold members who pay a monthly $5 membership fee. TradeStation allows all of its customers to apply for margin privileges, although it's worth noting that Robinhood's margin interest rate is much lower for most balances.

It's also important to note that neither broker is owned or affiliated with a bank, so there isn't an option to open checking, savings, or credit card accounts through either. However, Robinhood does offer an optional brokerage cash sweeps program for uninvested funds. Users who opt in earn interest on these funds without losing access.

If you're looking for a more hands-off approach, be aware that neither TradeStation nor Robinhood offers robo-advisor services.

READ MORE: Best Robo-Advisors

Robinhood is a mobile-first trading platform and is essentially designed to give clients the most user-friendly way to trade stocks, options, and cryptocurrencies on the go. It does have a web-based trading platform, but you won't find any sophisticated trading platforms available.

On the other hand, TradeStation prides itself on its feature-packed trading platform. It offers an app and web-based trading platform that are highly rated and very functional, but its desktop trading software is a professional-grade platform with things like customizable charting, automated strategy trading, and other features active and experienced traders want.

Both have trading apps that are very functional and easy to use. TradeStation holds ratings of 4.5 and 3.5 out of 5 stars on the App Store and Google Play store, respectively. And Robinhood's ratings are 4.2 and 4.1 (Note: Robinhood's ratings were significantly higher prior to the "meme stock" frenzy of early 2021, when it was forced to suspend trading in certain volatile stocks to the disappointment of many customers.)

LEARN MORE: Best Online Stock Brokers for Beginners

The bottom line is that these are two solid brokerage choices, but they're built for different types of investors. In many cases, the choice is easy. For example, if you want to invest in bonds, you aren't going to do it on Robinhood. The same can be said if you want to open a joint brokerage account with your spouse. The best course of action is to determine which broker has the features and capabilities that matter to you most, and if neither of these do, check out our other top brokerage picks to find one that better meets your needs.