Main Points
- Charles Schwab has now fully integrated TD Ameritrade after their acquisition in 2020, combining the strengths of both platforms and keeping thinkorswim as its main trading platform
- Both platforms offer free commission trading for stocks and ETFs, but there are differences in options contracts, futures trading, and access to forex
- TD Ameritrade’s thinkorswim platform has superior technical analysis tools with over 400 technical studies, making it the preferred choice for active and advanced traders
- Schwab’s StreetSmart Edge has strong capabilities for intermediate traders and also offers better overall research tools and wealth management services
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Charles Schwab vs TD Ameritrade: Which Platform Gives You the Advantage?
When comparing Charles Schwab and TD Ameritrade, you are basically looking at two sides of the same coin since Schwab’s acquisition of TD Ameritrade in 2020. While full integration is still ongoing, both platforms maintain distinct offerings that cater to different types of traders. Understanding the differences between them is key to determining which one is more aligned with your trading style, investment goals, and experience level. The right choice could significantly affect your trading efficiency and potential profitability.
Both platforms have their own distinct advantages. Schwab is known for its extensive research tools, wealth management, and customer service with a wide branch network. TD Ameritrade is famous for its thinkorswim platform, which is considered one of the best trading platforms for active traders and technical analysts. The great thing for traders is that the acquisition will eventually combine the strengths of both platforms.
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Effects of the Schwab-TD Ameritrade Merger
Charles Schwab completed its $26 billion purchase of TD Ameritrade in October 2020. The merger, which occurred during the industry’s transition to commission-free trading, resulted in a brokerage behemoth with over $6 trillion in client assets. Schwab’s wealth management expertise was combined with TD Ameritrade’s active trading tools. Schwab has wisely chosen to keep the thinkorswim platform as its primary trading tool, acknowledging its value to active traders, as the complete integration of all accounts and services continues.
The shift has been slow and steady for current clients. TD Ameritrade accounts are being transitioned to Schwab, and the firm is providing resources to make this change as seamless as possible. The most noticeable change has been the retention of thinkorswim’s capabilities within the Schwab ecosystem, which now allows Schwab clients to use this robust platform. This strategic move shows Schwab’s recognition of the value of thinkorswim to active traders who depend on its sophisticated features.
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Charles Schwab excels in:
- Robust wealth management services
- High-quality research tools and screeners
- Excellent banking integration with Schwab Bank
- Wide-ranging branch network for in-person assistance
- Impressive retirement planning resources
Strengths of TD Ameritrade/thinkorswim:
- Elite technical analysis capabilities
- Superior options trading tools and analytics
- More extensive paper trading features
- Better platform customization
- More robust educational content for beginners
When selecting between these platforms, consider your trading style. If you’re primarily focused on long-term investing with occasional trades and value comprehensive research, Schwab’s native platform might be preferable. However, if you’re an active trader who relies heavily on technical analysis, options strategies, or futures trading, thinkorswim remains the superior choice. The good news is that following the acquisition, you can now access both under the Schwab umbrella.
Active Trader Cost Comparison
Charles Schwab and TD Ameritrade both have commission-free stock and ETF trading, which is in line with industry standards set in late 2019. Both platforms charge $0.65 per contract for options traders. However, Schwab offers a reduced rate of $0.50 for high-volume traders (over 30 trades per quarter). These competitive prices mean that cost is not a significant factor in deciding between the platforms for most standard trading activities.
When it comes to futures trading, TD Ameritrade charges $2.25 per contract, compared to Schwab’s $1.50. Forex trading is another area where the two differ – TD Ameritrade offers this through thinkorswim with competitive spreads, while Schwab doesn’t directly offer forex trading. For those who trade on margin, Schwab generally has slightly lower interest rates, which could result in significant savings for active margin traders over time.
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Comparing Trading Platforms: User-Friendliness and Ease of Access
When it comes to user experience, Schwab’s platforms and TD Ameritrade’s thinkorswim are like chalk and cheese. Schwab’s main platform has a more straightforward, user-friendly interface that’s perfect for beginners and intermediate traders. It’s easier to learn, and the most important features are easy to find without overwhelming you. If you need something more advanced, Schwab’s StreetSmart Edge has more features, but it still can’t compete with the depth of thinkorswim.
On the other hand, TD Ameritrade’s thinkorswim platform may be a bit more challenging to learn, but it offers far more customization options. Active traders can adjust almost every part of the interface to suit their exact workflow, creating custom studies, scans, and layouts that can be saved and accessed quickly. This adaptability makes thinkorswim the go-to platform for serious traders who spend several hours each day analyzing markets and making trades.
Trading Platforms Offered by Schwab: Web, Mobile, and StreetSmart Edge
With three main trading platforms on offer, Schwab caters to a variety of investor needs. The standard web platform is perfect for casual investors and those managing retirement accounts, thanks to its user-friendly interface. It comes equipped with robust research tools and basic charting capabilities, as well as streamlined order entry. This makes it not only accessible for beginners, but also functional enough for intermediate investors.
Trading Platforms of Schwab: Web, Mobile, and StreetSmart Edge
Schwab has three main trading platforms that cater to different investor requirements. The standard web platform offers a clean, easy-to-use interface that’s perfect for casual investors and managing retirement accounts. It comes with robust research tools, basic charting capabilities, and simplified order entry, making it user-friendly for beginners and functional enough for intermediate investors.
StreetSmart Edge is Schwab’s high-tech desktop platform intended for active traders who require more advanced tools. The platform features customizable layouts, advanced charting with technical indicators, real-time streaming quotes, and powerful options tools. Despite its comprehensive nature, StreetSmart Edge has a somewhat gentler learning curve than thinkorswim, making it suitable for intermediate traders who want advanced features without the overwhelming complexity.
The Schwab Mobile app is a perfect addition to the ecosystem, providing a seamless experience for trading and managing accounts on the move. It gives you the ability to monitor your portfolio, trade, research, and get real-time quotes. Schwab has been steadily improving its mobile experience, but it doesn’t have some of the advanced charting and analysis features that you can find in the thinkorswim mobile app.
Capabilities of TD Ameritrade’s thinkorswim Platform
Thinkorswim is recognized as one of the most robust trading platforms in the industry, particularly shining in the areas of technical analysis and options trading. The desktop version boasts more than 400 technical indicators—significantly more than most of its competitors—along with the capacity to create custom studies using the unique thinkScript programming language. These extensive technical analysis capabilities make it unparalleled for traders who depend heavily on chart patterns and indicators to make decisions.
What makes thinkorswim stand out are its impressive options analysis tools, such as the Strategy Roller for automated options rolling, Risk Profile for visualizing potential results, and Option Hacker for finding trading opportunities. The platform also excels with its paper trading environment, offering a realistic simulation that includes virtual live data, enabling traders to try out strategies without risking real money. For those comparing platforms, you might find this comparison of Charles Schwab and TD Ameritrade useful.
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Functionality and Performance of Mobile Apps
Both TD Ameritrade and Charles Schwab offer exceptional mobile trading experiences, but they focus on different features. Schwab Mobile has a clean, easy-to-understand interface that focuses on portfolio monitoring, research, and basic trading functions. The app integrates seamlessly with Schwab’s banking services, allowing for easy fund transfers and bill payments. This is a significant benefit for those who use Schwab as their main financial institution.
TD Ameritrade provides two unique mobile experiences: the regular TD Ameritrade Mobile app and thinkorswim Mobile. The regular app is designed for casual investors with a simple interface for portfolio monitoring and basic trading. On the other hand, thinkorswim Mobile is one of the most potent trading apps available, offering advanced charting, complex options strategies, futures trading, and technical analysis tools that are almost on par with its desktop version—making it the obvious choice for active traders who require extensive capabilities when they are away from their computers.
Stability of the Platform During Market Fluctuations
The stability of the platform becomes important during high-volatility market fluctuations when the timing of trade execution can greatly affect the results. Both Schwab and TD Ameritrade have had occasional shutdowns during extreme market conditions, such as the fluctuations of early 2020 during the onset of the COVID-19 pandemic. However, both brokers have since heavily invested in improvements to the infrastructure to increase stability.
Over the past few years, Schwab has shown slightly superior overall uptime statistics, with fewer reported outages during key market hours. Both platforms employ redundant data centers and have backup plans in place for service interruptions, although neither can promise 100% availability. For vital trading needs, serious traders frequently keep accounts at several brokerages to ensure execution capability in the event of potential service interruptions—a practice worth considering no matter which platform you primarily trade on.
Investment Research and Learning Materials
Both platforms have an extensive list of research tools, but each has its own strengths. Schwab offers a more comprehensive fundamental research, including detailed analyst reports, earnings estimates, and a proprietary rating system that helps investors evaluate potential investments. Their equity rating system and Schwab Select List provide curated investment ideas based on rigorous analysis, which is particularly valuable for fundamental investors.
TD Ameritrade shines when it comes to technical analysis tools via the thinkorswim platform. It offers top-notch charting capabilities, customizable technical studies, and features for recognizing patterns. Both platforms offer news feeds from leading providers like Reuters and Dow Jones. However, TD Ameritrade stands out with its integration of social sentiment analysis from Social Market Analytics. This feature provides traders with extra insight into how the market perceives securities. This is a unique feature that Schwab’s offerings do not match.
Investment Research and Stock Screening
Charles Schwab’s stock screener is impressive for its user-friendly design and extensive filtering capabilities. Investors can filter by fundamental metrics, technical indicators, analyst ratings, and Schwab’s own equity ratings. The screener is particularly strong in its ability to analyze fundamentals, with in-depth financial data, comparisons by sector, and earnings surprise history all readily accessible. Schwab also adds value to its research offerings with its equity rating system, which assigns easily understandable grades from A to F based on a combination of fundamental and technical factors.
TD Ameritrade’s screening tools, especially those in thinkorswim, offer more robust technical filtering options. The Stock Hacker feature enables complex queries that combine technical indicators, fundamental data, and custom thinkScript formulas, offering considerable flexibility for traders with specific criteria. The platform also includes predefined scans for common patterns and market conditions, helping traders quickly identify potential opportunities without having to build screens from scratch.
Comparing Technical Analysis Tools
If you’re a technical analyst, you’ll find that thinkorswim provides much more robust features than Schwab’s platforms. Not only does it offer a library of over 400 technical studies (compared to roughly 100 in StreetSmart Edge), but it also provides more sophisticated drawing tools, pattern recognition capabilities, and the option to develop custom indicators with thinkScript. The ability of the platform to analyze multiple timeframes at the same time and apply complex conditional formatting to charts provides serious technical traders with a lot more analytical capabilities.
StreetSmart Edge has adequate technical analysis features that would suffice for most intermediate traders, including popular studies like moving averages, RSI, MACD, and Bollinger Bands. The platform offers decent chart customization options and the ability to save chart layouts. However, it lacks the programming capability and extensive customization options that make thinkorswim the preferred choice for dedicated technical analysts who require maximum flexibility in their chart analysis.
Education Resources for New Investors
TD Ameritrade has long been a leader in education, with its TD Ameritrade Network (akin to a financial news network), extensive video library, and interactive courses for various skill levels. The platform offers structured learning paths that guide beginners through the basics of trading, with content specifically tailored to different types of assets and strategies. Their virtual trading workshops and daily webcasts provide ongoing education that helps new investors build skills over time.
Schwab responds with top-notch learning materials via its Schwab Knowledge Center, which provides articles, videos, and webinars that cover the basics of investing, retirement planning, and trading strategies. Schwab’s education leans more towards principles of long-term investing than active trading techniques, which mirrors the broker’s historical focus on wealth management. Both platforms provide ample resources for investors of all levels, though TD Ameritrade’s content is more suited to those who are specifically interested in active trading techniques.
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Mock Trading and Training Accounts
TD Ameritrade’s thinkorswim platform outperforms in the area of mock trading, delivering a fully-functioning simulation that replicates the experience of live trading. The mock trading account comes with real-time data, lets you practice with all accessible asset types (including options and futures), and keeps a distinct watchlist and analysis configuration from live trading. This complete simulation environment makes it a great resource for strategy creation and platform familiarisation without putting capital at risk.
Compared to thinkorswim’s simulation, Schwab’s StreetSmart Edge paper trading capabilities are more basic and offer fewer advanced features. While Schwab’s paper trading environment is sufficient for basic strategy testing, it falls short when it comes to practicing complex scenarios involving options spreads or advanced order types that active traders might want to test before using real money.
Integration with Third-Party Research
Charles Schwab offers a broader selection of third-party research reports from reputable companies such as Morningstar, Credit Suisse, and Argus. This comprehensive set of analyst insights offers investors various perspectives on potential investments, which is especially helpful for fundamental and value investors doing detailed due diligence. Schwab also incorporates these research reports smoothly into their stock profile pages, making it simple to access expert analysis along with price data.
TD Ameritrade also provides strong third-party research, including reports from Morningstar and CFRA, although the selection is not quite as extensive as Schwab’s. TD Ameritrade distinguishes itself by incorporating alternative data sources, such as social sentiment analysis, which offer viewpoints beyond traditional research. The thinkorswim platform is particularly good at integrating economic data calendars and visualizing the potential effects of economic events on securities prices.
Understanding Commissions and Hidden Charges
Both TD Ameritrade and Charles Schwab offer commission-free trading for stocks and ETFs, but to fully understand the fee structure, you need to look beyond the surface. Both brokers have done away with most account maintenance and inactivity fees, creating a relatively transparent cost structure. However, traders need to be aware of various specialty fees that might apply to specific transaction types or account services.
Comparing Stock and ETF Commissions
Charles Schwab and TD Ameritrade both provide commission-free trading on all U.S.-listed stocks and ETFs. They got rid of these fees in late 2019, following the industry-wide trend away from transaction-based revenue models. The fact that their commission structures are the same means that cost isn’t a deciding factor for stock and ETF traders when choosing between these platforms. Neither broker requires trading minimums, so both are suitable for investors who are starting with small amounts.
Costs of Options Trading
Options traders can expect to pay $0.65 per contract with no base fee on both platforms. Schwab provides a reduced rate of $0.50 per contract for customers who execute more than 30 trades per quarter or maintain significant account balances. This tiered pricing structure can lead to substantial savings for high-volume options traders who qualify for the reduced rate, potentially saving hundreds of dollars annually for those trading multiple contracts regularly.
Both brokers don’t charge extra fees for standard options strategies, including spreads and other multi-leg positions. Both platforms allow options on futures trading for qualified accounts, though the fee structures are slightly different, with thinkorswim generally offering more competitive rates for these specialized instruments.
Charges for Mutual Funds and No-Transaction-Fee Options
Schwab has a slight advantage in mutual fund offerings, with around 4,200 no-transaction-fee (NTF) mutual funds, compared to TD Ameritrade’s 4,000+ NTF funds. For funds outside of the NTF program, Schwab charges $49.95 per transaction, while TD Ameritrade charges $49.99 – the pricing is virtually the same. Both platforms offer extensive screening tools to help investors find funds that meet their investment criteria while keeping costs low.
Schwab’s lineup of low-cost index mutual funds provides additional value, featuring some of the industry’s lowest expense ratios. These proprietary funds, along with Schwab’s commission-free ETF lineup, provide cost-effective building blocks for long-term investment portfolios, giving Schwab a slight advantage for mutual fund investors focused on minimizing both transaction costs and ongoing expense ratios.
Costs for Account Maintenance and Inactivity
Both Charles Schwab and TD Ameritrade don’t charge any fees for account maintenance or inactivity, removing these potential expenses that some other brokers still levy. They have also gotten rid of transfer fees for ACH transactions, although wire transfers do come with standard fees ($25 for domestic outgoing wires at both brokers). There are no minimum balances required to keep standard brokerage accounts at either broker, making both of them accessible options for investors of all asset levels.
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Advanced Trading Capabilities
In addition to basic trading features, each platform offers advanced capabilities that cater to traders with specific needs. This is where the platforms really differ, especially for derivatives traders, futures specialists, and traders of non-equity products.
Tools and Strategy Builders for Options Trading
TD Ameritrade’s thinkorswim platform offers a wealth of options analysis tools that serious options traders will find invaluable. The platform’s Strategy Roller makes automated options roll forwards possible, the Risk Profile tool offers visual probability analysis, and Option Hacker helps identify potential trades based on custom criteria. These specialized tools help make complex options strategies more understandable and offer analytical depth that Schwab’s platforms can’t fully match, even though they have solid basic options capabilities.
StreetSmart Edge from Schwab has commendable options trading features, such as a specialized options trading interface, strategy builders, and fundamental probability calculators. However, it doesn’t have the depth and sophistication of the specialized options tools on thinkorswim, especially when it comes to analyzing complicated multi-leg strategies. Schwab’s tools are adequate for casual options traders, but dedicated options specialists will find that the capabilities of thinkorswim are more in line with their advanced requirements.
Capabilities for Futures Trading
For futures traders, thinkorswim offers a more extensive suite of futures trading tools, including advanced futures contract charting, dedicated futures analysis workspaces, and specialized futures spread trading capabilities. The platform provides trading access to a broad range of futures markets, including equity index futures, commodities, currencies, and interest rates, with competitive per-contract pricing of $2.25.
While Schwab does offer futures trading via its subsidiary, Charles Schwab Futures and Forex LLC, at a rate of $1.50 per contract, it is cheaper than TD Ameritrade. However, Schwab’s futures trading tools lack some of the specialized features that are available in thinkorswim, making it less appealing for active futures traders despite the pricing advantage. If you are primarily focused on futures, you might find the extra analytical capabilities of thinkorswim worth the slightly higher per-contract cost.
Forex Trading Accessibility
TD Ameritrade offers direct forex trading via the thinkorswim platform. It provides access to more than 70 currency pairs with competitive spreads and no additional commission structure. The platform also features specialized forex analysis tools, economic calendars with currency impact ratings, and heatmaps that display relative currency strength. This built-in forex functionality makes thinkorswim a flexible platform for traders who include currency trading in addition to other asset classes.
Charles Schwab lacks the direct forex trading capabilities that TD Ameritrade offers. While Schwab clients can gain exposure to currencies through ETFs, futures, or options, those seeking direct forex trading capabilities will find TD Ameritrade’s offering superior. This represents one of the clearer differentiators between the platforms for traders who include currencies as part of their trading approach.
Options for Trading Cryptocurrency
At present, neither Charles Schwab nor TD Ameritrade provide direct cryptocurrency trading on their platforms. Both brokers restrict cryptocurrency exposure to futures products (like Bitcoin futures) and publicly traded securities such as cryptocurrency trusts or ETFs that monitor digital asset prices. This is a constraint for traders looking for extensive crypto exposure on the same platform they use for conventional securities.
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Comparing Customer Service and Support
Both brokers have a high standard of customer service, but they each have their own strengths. Schwab has always been a leader in this area, winning many industry awards for customer satisfaction and service quality. They offer personalized assistance through a variety of channels, including a large network of branches that provide in-person support options that most online brokers do not offer.
Customer Support
Charles Schwab and TD Ameritrade both provide 24/7 phone support, ensuring that traders can always get help when they need it. This 24/7 availability is particularly important for active traders who may trade at all hours of the day and night or need help during major market events that happen outside of normal business hours. Both brokers have dedicated trading desks with specialized representatives who understand complex order types and platform-specific features.
Physical Branches and Face-to-Face Help
Charles Schwab has a leg up with over 300 physical branches across the country, providing face-to-face help that many online brokers don’t offer. These physical branches allow customers to meet with financial advisors in person, attend educational seminars, and get personalized help with complicated account issues. This network of branches is especially helpful for customers who prefer face-to-face conversations for sensitive financial talks or detailed financial planning.
Prior to the merger, TD Ameritrade had about 175 branches. However, these branches are being combined into Schwab’s branch network as part of the integration. As the merger continues, former TD Ameritrade customers will gain access to Schwab’s larger branch network. However, some branches may close during the consolidation, potentially requiring some customers to travel further for in-person help.
Customer Support Response Times
Both brokers have good response times across all their support channels, though wait times can get longer during market volatility or major corporate actions. Schwab usually has shorter average wait times for phone support, often connecting clients to representatives in under two minutes during normal conditions. Their chat support is also very responsive, with quick connection times and representatives who can resolve most common issues without needing to escalate them. For those interested in comparing other platforms, check out this comparison of LinkedIn vs. Facebook for B2B lead generation.
TD Ameritrade’s customer service is on par with Schwab’s, although you may have to wait a bit longer during peak times. Both brokers offer the option to request a callback so you don’t have to wait on hold. They also respond to emails within a similar timeframe, usually within 24 hours. Both platforms offer a wealth of self-service resources, including searchable knowledge bases and tutorial videos, which can answer many common questions without the need to contact customer service.
Types of Accounts and Investment Products
Both platforms provide extensive options for account types, including individual and joint brokerage accounts, traditional and Roth IRAs, SEP and SIMPLE IRAs for small business owners, and specialized accounts such as Coverdell Education Savings Accounts and UGMA/UTMA accounts for minors. The wide range of account options makes both suitable for investors with various financial planning needs, from basic investing to complex retirement strategies.
Personal and Combined Brokerage Accounts
Both firms offer standard brokerage accounts with no minimum balance requirements, no maintenance fees, and the same commission structures for most securities. Margin trading is available on both platforms, with competitive interest rates. Schwab usually has slightly lower margin rates, which can benefit frequent margin traders. The account opening process is quick and easy at both brokers, with most accounts up and running within 1-2 business days of submitting an application.
Retirement Account Choices
Both of these brokers have a wide range of retirement account choices, and neither of them charge setup or annual maintenance fees. Traditional and Roth IRAs are the basis of their retirement offerings, and both companies provide top-notch educational resources to assist clients in understanding the tax implications and contribution limits for each type of account. For small business owners and self-employed individuals, both platforms offer SEP IRAs, SIMPLE IRAs, and individual 401(k) plans with competitive fee structures.
Charles Schwab offers a bit more in the way of retirement planning tools, including retirement calculators, strategies for optimizing Social Security, and RMD calculators that help clients navigate the complex rules of retirement distributions. TD Ameritrade can match most of these capabilities, but they offer fewer specialized retirement planning resources for complex scenarios like maximizing pensions or strategies for sequencing retirement income.
Money Management Tools
Charles Schwab has a leg up on cash management tools due to its integration with Schwab Bank. Account holders have access to high-yield checking accounts, bill payment services, and a worldwide ATM fee rebate program that essentially provides free ATM access globally. The smooth integration between brokerage and banking services enables efficient cash management, with immediate transfers between accounts and a consolidated view of finances across the Schwab ecosystem.
TD Ameritrade provides cash management features through its Cash Management account, which includes check writing, bill pay, and a debit card. However, these services do not offer the complete banking integration that Schwab offers through its banking subsidiary. As the merger continues, former TD Ameritrade customers will be able to access Schwab’s superior banking services, which will significantly improve their cash management abilities.
Access to International Trading
When it comes to international market access, Schwab has a wider reach. With its Global Account, it offers direct trading on exchanges in 12 foreign countries. This service allows investors to buy foreign securities in local currencies, giving them true international diversification beyond ADRs or international ETFs. The platform also includes research on international securities and automatically handles currency conversion, making the process of international investing simpler.
TD Ameritrade’s international trading capabilities are more limited, primarily restricted to U.S.-listed ADRs and international ETFs rather than direct foreign market access. While these instruments provide exposure to international markets, they don’t offer the same level of diversification or selection as direct market access. This represents a meaningful advantage for Schwab among investors seeking comprehensive global investment capabilities.
Quality and Speed of Order Execution
Both brokers uphold high standards for the quality of order execution, although they have different strengths in their routing practices and speed optimization. The quality of execution affects the real price that investors get when trading, which could add or subtract significant value beyond the main commission rates.
Savings on Trades
Both TD Ameritrade and Charles Schwab release regular reports on how often their customers get better prices than the national best bid and offer (NBBO). Schwab has a slightly better track record in this area, with recent quarterly reports showing an average savings of $1.85 per 100 shares on eligible market orders. This can add up to big savings for active traders who make a lot of trades.
How Orders Are Routed
Both of these brokers accept payment for order flow (PFOF) from market makers. This is a common industry practice that makes commission-free trading possible. Schwab’s approach to routing orders focuses on a combination of improving prices and speeding up executions. Orders are sent to several market makers based on their past performance. The routing algorithms they use are constantly assessing the quality of executions across venues to get the best results for clients.
TD Ameritrade has a similar approach, but it may prioritize speed more in certain market conditions. Both brokers are transparent about their order routing practices, as required by SEC regulations, and reveal how they handle trade execution in quarterly reports. Neither broker offers direct routing on their basic platforms, but thinkorswim does offer some advanced routing options for more experienced traders.
Handling of Complex Orders
When it comes to handling complex orders, TD Ameritrade’s thinkorswim platform is a standout, especially for options strategies. The platform allows for complex order types like conditional orders, one-cancels-other (OCO) orders, and first-triggers-sequence orders that enable traders to automatically put complex trading rules into action. These advanced order capabilities are particularly beneficial for options traders and those who use sophisticated multi-leg strategies.
Here are some of the advanced order types that thinkorswim offers:
- Orders that are conditional on price, time, or external events
- Orders that are multi-contingent with complex execution rules
- Trailing stop orders with parameters that can be customized
- Blast all orders that simultaneously attempt multiple venues for the best execution
- Iceberg orders that conceal large position accumulation from the market
Through StreetSmart Edge, Schwab provides standard advanced order types, including conditional orders and OCO capabilities. However, they offer less customization than thinkorswim. The platform can efficiently handle complex options orders, with the ability to input multi-leg strategies as single orders for improved execution. These capabilities are sufficient for most traders, though those who need maximum order flexibility will prefer the more extensive options of thinkorswim.
For active traders who often use algorithmic or conditional execution strategies, the difference in complex order capabilities is most noticeable. Thinkorswim’s ability to create highly customized order conditions and sequences provides more control over execution timing and price parameters, potentially improving results for sophisticated trading approaches that rely on precise entry and exit execution.
Which Platform Should You Choose?
Deciding between these platforms is really about your trading style, investment objectives, and experience level. Since Schwab’s acquisition of TD Ameritrade has kept thinkorswim as part of the combined company’s offerings, you’re essentially deciding which interface and feature set better aligns with your specific needs rather than choosing between completely different brokerages.
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Top Pick for New Investors
For those just starting their investment journey, Schwab’s primary platform is likely to be the most user-friendly option. Its easy-to-navigate interface, robust educational resources, and superior customer service make it an excellent choice. The platform is designed to avoid overwhelming new investors with too many features, while still providing all the necessary tools for portfolio building and management. Plus, Schwab’s vast network of branches provides the added comfort of in-person support when online solutions aren’t enough.
TD Ameritrade provides exceptional learning materials aimed at novices, such as structured learning paths and video content from the TD Ameritrade Network. However, the thinkorswim platform, which is their main platform, has a steeper learning curve that may scare off beginners. For those just starting out who plan on becoming more active traders as they gain experience, beginning with TD Ameritrade’s standard platform and then moving on to thinkorswim is a logical progression.
For many newbies, the best strategy is to begin with either platform’s basic web interface and utilize their educational resources to expand their knowledge. As they become more comfortable and confident, they can start to play around with more advanced features and ultimately move on to specialized platforms like StreetSmart Edge or thinkorswim, allowing them to improve their skills without feeling overwhelmed.
Best Platform for Frequent Traders
Frequent traders who put a premium on advanced charting, technical analysis, and complex options strategies will find thinkorswim to be far superior to Schwab’s platforms. Its wide range of customization options, programming capabilities through thinkScript, and comprehensive suite of technical tools create an environment where dedicated traders can implement nearly any analysis or trading approach they can think of.
Long-Term Investor Opportunities
For those who are focusing on retirement planning and building wealth, Schwab’s ecosystem is a little more in tune with their needs. Schwab provides a complete solution for managing finances, not just trading, with superior research tools, financial planning resources, and integrated banking services. Schwab’s robo-advisory service, Intelligent Portfolios, also provides a sophisticated automated investing option for those who prefer a hands-off approach to long-term investing.
TD Ameritrade has similar offerings for long-term investors with its Essential Portfolios automated investing service and wide-ranging retirement planning tools. However, Schwab’s increased focus on comprehensive wealth management and slightly broader research offerings give it a slight advantage for investors more focused on long-term goals than active trading.
Day Trading Solutions
Day traders will usually find the capabilities of thinkorswim more to their liking, especially its advanced charting, customizable scans, and specialized order types that facilitate rapid execution. The platform’s heat mapping tools, time and sales windows, and level II quotes provide the market depth information that is critical for making short-term trading decisions, while its customizable alerts help to identify potential opportunities as they develop throughout the trading day.
Common Questions
With the ongoing integration of these two significant platforms, many traders are curious about how the merger will impact their accounts, tools, and trading abilities. Here are the responses to the most frequently asked questions about the Schwab-TD Ameritrade merger.
What occurred with TD Ameritrade following the acquisition by Charles Schwab?
Timeline of TD Ameritrade Integration:
In October 2020, Charles Schwab finalized its purchase of TD Ameritrade, resulting in a behemoth in the industry with client assets totaling more than $6 trillion. TD Ameritrade has been functioning as a Schwab subsidiary since the acquisition while the companies are in the midst of a years-long integration process. The most notable change has been Schwab’s choice to keep the thinkorswim platform as its high-end trading platform, acknowledging its superiority for active traders.
- October 2020: Acquisition completed, TD Ameritrade becomes Schwab subsidiary
- 2021-2022: Operational integration begins, platforms remain separate
- 2023-2024: Account migration process begins in phases
- Late 2024: Expected completion of full integration
The merging process involves a slow and steady transfer of TD Ameritrade accounts to Schwab’s systems, which is being done in stages to avoid any inconvenience. Throughout this transition, both platforms will remain active, and clients will be given plenty of warning before their accounts are moved. Schwab has pledged to keep the most popular features of TD Ameritrade, especially thinkorswim and its educational resources, and incorporate them into the larger Schwab ecosystem.
After the merger is completed, the new company will be known as Charles Schwab, but thinkorswim will keep its unique identity as Schwab’s high-end trading platform. The merger combines Schwab’s strengths in wealth management, research, and banking with TD Ameritrade’s superior active trading tools, creating a more comprehensive offering than either company provided independently.
Can I access thinkorswim with a Schwab account?
Yes, if you are a Schwab client, you can now use thinkorswim through your Schwab account. After the acquisition, Schwab has made thinkorswim accessible to its clients, acknowledging the platform’s superior features for active traders. This is a significant improvement for Schwab clients who didn’t have access to the advanced trading and analysis tools of thinkorswim before.
You can get thinkorswim access by connecting your Schwab account to the platform. You can do this online through your Schwab account dashboard. Once connected, you can download the thinkorswim desktop application, access the web version, or use the mobile app with your Schwab login credentials. The platform works the same as it did under TD Ameritrade, with all its advanced features.
One of the biggest benefits of the merger for existing Schwab clients is the integration of thinkorswim’s advanced technical analysis, options trading, and futures trading capabilities. This means that Schwab clients can now enjoy the best of both worlds: the powerful trading tools of thinkorswim and the comprehensive financial services of Schwab. And as the integration continues, it will become even more seamless, with full account functionality across all platforms.
- Get thinkorswim desktop, web, or mobile from the Schwab site
- Sign in with your Schwab details
- Finish a one-time account linking process
- Use full thinkorswim functionality with your Schwab account
- Trade across all asset classes your account permissions allow
Who has better options trading tools?
TD Ameritrade’s thinkorswim platform is hands down better for options trading tools than Schwab’s native platforms. Both brokers have the basics for options, but thinkorswim’s specialized features—like Strategy Roller, Risk Profile, Option Hacker, and customizable probability analysis tools—make a complete package for options traders that Schwab’s platforms can’t fully match even with solid basics.
Do Schwab and TD Ameritrade have different margin rates?
Indeed, the margin rates between the two platforms are not the same, with Schwab usually having more competitive rates than TD Ameritrade. For standard accounts, Schwab’s base margin rate is typically 0.25-0.50 percentage points lower than TD Ameritrade’s rate for equivalent balance tiers. Both brokers use tiered pricing that reduces rates for larger margin balances, but Schwab maintains its advantage across most tiers.
Both brokers calculate margin rates using a base rate plus a spread that changes according to account balance. Higher balances qualify for smaller spreads, lowering the effective interest rate. Schwab’s slightly more favorable margin rate structure can represent significant savings for investors who frequently use margin or hold margin positions for long periods. For a broader comparison on investment fees and features, you might find this Vanguard vs. Fidelity comparison insightful.
Comparing Margin Rates (Sample Tiers)*
Debit Balance
Charles Schwab
TD Ameritrade
Under $25,000
12.575%
13.075%
$25,000-$49,999
11.825%
12.325%
$50,000-$99,999
10.575%
11.075%
$100,000-$249,999
9.825%
10.325%
$250,000+
9.075%
9.575%
*Rates are examples and subject to change with market conditions
As the merger moves forward, there’s a good chance that margin rate structures will become more similar. This could mean that former TD Ameritrade customers will benefit from Schwab’s more favorable rates. If you’re a trader who often uses margin, keep an eye on these rates. They’re an important factor to think about when you’re deciding which platform is the best fit for you. The difference in rates can greatly affect your total trading costs if you often use margin in your strategies.
What’s the process for moving my account from TD Ameritrade to Schwab?
While the two companies are merging, Schwab is handling the account transfers from TD Ameritrade. This means that customers don’t have to do anything to initiate the transfer. Schwab is moving accounts over in stages and will notify clients about 30 to 45 days before their account is scheduled to be moved. This notification will include all the details about the move, any steps the client needs to take, and what will happen to their account access during the transfer.
If customers want to move from one platform to another before their migration date, both Schwab and TD Ameritrade offer standard ACAT transfers. However, the majority of customers are recommended to wait for the automatic migration to prevent any potential issues. The company-managed procedure guarantees that features such as cost basis tracking, transaction history, and tax documentation will continue. The automated process also eliminates any transfer fees that might be charged for transfers initiated by customers.
During the transition, clients will still have access to their accounts. However, there might be short periods (usually 1-2 business days) when trading is limited while assets are being transferred. Cash management features such as debit cards and check writing will continue to work during this time. After the transition, clients will be able to access their accounts through Schwab’s platforms. Those who previously used thinkorswim will still have access to it.