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E*TRADE Review 2021 – Great Discount Broker For the Advanced Investor


FEATURED PROMOTION

At a glance

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Our rating

4.5/5
  • Key Features: Intuitive online trading, multiple state of the art platforms equipped with some of the most robust tools in the industry, prebuilt portfolios with robo-advising, access to various asset classes such as options, customizable stock screeners, retirement accounts .
  • Advantages: The company offers multiple trading platforms that cater to specific types of traders, market-leading technical indicators and tools, industry low fees, retirement investing, and robo advisor capabilities.
  • Disadvantages: Designed for active traders, the platforms may seem convoluted to the new trader, the company doesn’t offer access to cryptocurrency or forex trading, and there’s no way to track your net worth at a glance.


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E*Trade is a pioneer in online stock trading, withstanding the test of time by offering compelling trading tools coupled with world-class customer service.

Although the company began to lose market share to its competitors as commission-free brokerages started to hit the market about a decade ago, it did away with its trading commissions in 2019, offering its world-class platform and features coupled with a low-cost business model.

Today, E*Trade is among the top online brokers in the world, managing more than $420 billion in assets for its customers.

Key Features

Acquired by Morgan Stanley in 2020, E*Trade is a pioneer that is now operated by one of the biggest names on Wall Street, giving you peace of mind in knowing that when you work with the company, your money’s in good hands.

Aside from knowing that you’re working with a top dog in the market, here are the key features that the company’s clients rave about:

Intuitive Trading Platforms

From the very beginning, E*Trade has catered to active traders and high-net-worth individuals.

As a result, the company invested significant time and money into its trading technology, which is made clear by the two web platforms it offers, each designed to cater to specific types of clients.

With your E*Trade account, you’ll gain access to:

The E*Trade Web Platform

The E*Trade web platform was the original way to trade and invest in stocks online, and it remains one of the top platforms in the industry today. This platform was designed for the investor who enjoys fundamental analysis and wants access to analyst research.

When using this platform, key features you’ll gain access to include:

  • Fundamental Data. The platform provides access to the latest news, independent analyst research, quotes, and more.
  • Technical Capabilities. Intuitive charting with easy-to-use drawing tools and stock screeners gives the stock trader the technical analysis tools needed to be successful.
  • Retirement Resources. The platform also gives you educational resources for retirement planning, helping to make sure that you don’t have to work through your golden years.
  • Access to Bloomberg TV. When trading with E*Trade, you’ll have access to market news from Bloomberg TV, saving you hundreds of dollars per year.

Power E*Trade

The Power E*Trade platform was designed for traders who take a more technical approach to the stock market. While it’s a compelling platform for trading stocks and futures, those who trade options will enjoy the biggest benefits here.

Some of the key features available on the Power E*Trade platform include:

  • Charting Tools. The charts on the platform automatically populate technical indicators as well as educational information. The platform also offers advanced intraday and historical charting, complete with more than 100 studies, 30 drawing tools, and all the different chart types a trader would ever need.
  • Probability at a Glance. The platform also gives investors and traders a look at the most probable outcomes of options trades before the trades are made. This feature provides deep insight into what you can expect before making a trade decision.
  • Risk Analysis. Yet another feature geared toward the options trader, the platform provides risk analysis tools that give you a better understanding of the risks you accept prior to making a trade.

Prebuilt Portfolios

While E*Trade’s platforms are largely designed for active traders, the rise in robo-advisors created a new opportunity for the company, and it has no plans of leaving money on the table.

As a result, E*Trade developed its own competition to its robo-advisor adversaries with Core Portfolios.

All you need in order to access one of these prebuilt portfolios is an E*Trade brokerage account and $500. If you meet these requirements, setting up your portfolio is simple.

With these portfolios, investments are handpicked by the company’s team of Wall Street professionals based on your investment goals and risk tolerance. Once your investments are picked, the company uses advanced technology to monitor and automate the rebalancing of your portfolio, creating a set-it-and-forget-it opportunity for you.

Moreover, E*Trade charges minimal fees for investing in these portfolios at just 0.30% per year. That means if you have $10,000 in your investing account, your annual fee would be just $30.

A Leading Options Platform

E*Trade quickly became a leader in the options trading space. However, that leadership grew in a serious way in 2016 when it announced a $725 million agreement to acquire its leading competitor, OptionsHouse.

With the acquisition, the company staked a claim to more than $3 billion in assets under management and 154,000 trading accounts.

Merging features from OptionsHouse into the Power E*Trade platform was a match made in heaven, resulting in one of the most robust platforms options traders could ask for.

A Wide Range of Assets Available to Trade

When taking advantage of the brokerage services E*Trade offers, you’ll have access to trade a wide range of assets, including individual stocks, mutual funds, exchange-traded funds (ETFs), bonds, and some derivative investments such as options and futures.

Two Powerful Mobile Apps

No platform is complete without a mobile version; simply offering a mobile app isn’t enough to make a compelling argument as a key feature.

However, E*Trade takes this a step further. The company has developed two mobile investing apps designed to mirror the desktop apps while providing deeper efficiency for a fast trading experience.

Both the E*Trade Mobile App and Power E*Trade App are available on Android and iOS devices, and they are just as intuitive and user-friendly as the company’s desktop platforms.

Even complex trades can be made with simplicity as a result of the naturally inviting layout and access to complex trading tools not available on most other trading apps.

Trading Simulator

Trading is a fast-paced process that comes with significant risk for those with little experience. As a result, it’s important to test your trading strategies in a virtual environment prior to risking your hard-earned money.

E*Trade’s virtual platform gives you the ability to do just that.

With the trading simulator, you’ll be able to trade in an environment that mirrors the company’s live platforms using virtual money rather than risking cold, hard cash. Even experts often find value in trading simulators when testing new strategies.

Customizable Screeners

Having a solid trading strategy does little for you if you’re unable to find opportunities that fit within it. If you had to assess every single stock on the market one by one to find the opportunities that fit your strategy, you would likely go years between trades.

The good news is that E*Trade offers some of the most robust screening tools on the market today.

The screeners offered by the company are easy to use and highly customizable, making it simple to find the types of opportunities you’re looking for with lightning speed.

Low Fees

Trading with E*Trade lets you enjoy some of the lowest costs the industry has to offer.

E*Trade has joined the ranks of commission-free brokers, offering $0 commissions on options, ETFs, and domestic stock trades.

Options contract fees start at $0.65 but fall to $0.50 when you trade more than 30 options contracts per quarter.

Futures contract fees are $1.50 each, and bond purchases carry a $1 fee each with a $10 minimum and $250 maximum.

Traders also enjoy the fact that there are no account minimums or minimum deposits, giving everyday investors access to the stock market.

Those who trade on margins will enjoy relatively low margin costs as well, with tiered rates based on the debit balance ranging from 5.45% to 8.95%.

Retirement Investing

While E*Trade is best known for catering to the active trading community, the company is also a major player in the retirement investing space, giving its users all the tools needed to build and maintain retirement accounts that will set the stage for financial freedom during their golden years.

The company offers various different retirement account types, including popular tax-advantaged retirement account options like traditional IRAs, Roth IRAs, and rollover IRAs.

The company even has a retirement account known as the IRA for Minors, which is a retirement account that’s managed by an adult custodian for children with earned income.


Advantages

There are several reasons to be excited about an account with E*Trade. The low-cost broker offers access to tools not available with its competitors, provides access to multiple intuitive trading platforms, and gives you all the analysis and research tools needed to make educated investment decisions.

Some of the biggest advantages investors enjoy include:

  1. In-Depth Trading Tools. Regardless of which E*Trade platform you choose to use, you’ll have access to in-depth tools designed to help you be as successful as possible in the market. From auto-populating technical indicators to in-depth market analysis, you’ll have everything you need to make educated investment decisions when using the company’s services.
  2. Access to Options Trading Features Not Found Elsewhere. With the acquisition of OptionHouse, E*Trade became the premier options platform, offering tools not available on competing platforms. For example, with the platform, you’ll be able to quickly gauge the risk/reward profile of trades in advance and scan for trades that fit specific criteria like target price and expiration date.
  3. Low Fees. When investing, it’s important to keep your fees as low as possible. When trading with E*Trade, you’ll be able to do just that with zero trading commissions, industry-leading option and futures contract fees, and competitive margin rates.
  4. Free Savings Account. Cash within your account can be held in a free savings account with a 0.05% interest rate. Considering the average savings account interest rate at the time of writing is 0.06%, the interest earned will be slightly below average. Nonetheless, the savings account offers a convenient way to keep all your money in one place.
  5. Quality Customer Support. Any time you take advantage of a financial service, it’s important to work with a company known for providing quality customer service. After all, when you have questions about your money, you want to make sure that someone is ready and knowledgeable to answer those questions for you. E*Trade fits that bill to a T.
  6. Free Bloomberg TV. Bloomberg TV is a critically acclaimed financial media outlet founded by American entrepreneur, philanthropist, and former New York mayor Michael Bloomberg. The E*Trade platform lets you view Bloomberg TV to get the latest on breaking news and third-party research.

Disadvantages

While there are plenty of reasons to be excited about the tools and features offered through an E*Trade account, there are some drawbacks to consider before signing up. The most significant drawbacks include:

  1. No Access to Cryptocurrency. Bitcoin and other cryptocurrencies are hot topics among investors, and some believe they are the future of monetary systems. While that may or may not ever happen, these highly liquid assets have grown to eye-opening values as a result of heavy popularity among the investing community. Unfortunately, E*Trade doesn’t support the trading of cryptocurrencies.
  2. No Net Worth View. Many of the company’s competitors give users the ability to connect outside investing, savings, and checking accounts, as well as debt accounts to get a complete net worth view at a glance. Unfortunately, this functionality isn’t available with an E*Trade account.
  3. No Forex. If you’re interested in trading in the foreign exchange (forex) market, you’ll have to look elsewhere, as currency trading is not supported on either of the company’s platforms.
  4. Designed for Active Traders and High-Net-Worth Investors. The E*Trade platforms are the perfect fit for active traders and high-net-worth individuals, offering complex trading tools and fundamental insights. However, the platform wasn’t designed for small buy-and-hold investors. While the company is starting to offer attractive services for this community, its complexity could be a turnoff to beginner investors with smaller accounts.

Final Word

E*Trade was one of the first online brokers in the United States and maintains a position of leadership to this day. The company’s focus on providing the most intuitive tools for active traders and bringing simplicity to the options trading process has led to a highly popular, world-class platform.

While the company’s platforms may at first be a bit intimidating for newcomers, taking the time to learn how to use the tools available can give you what you need to beat the market.

FEATURED PROMOTION

The Verdict

Etrade Logo

Our rating

4.5/5

E*Trade is a leading online stock broker that has garnered the attention of investors by offering state-of-the-art trading technology at fees comparable to the lowest-cost discount brokers online today. While currency traders will have to find an alternative, the platform has become the go-to choice for stock, ETF, options, and futures traders.

E*Trade is a premier online broker that has earned its position at the top. The company offers one of the most robust platforms for active traders complete with all the tools and features even the pros would expect. While you won’t be able to trade forex or cryptocurrency on any of the company’s platforms, it’s a compelling offering for those looking to trade stocks, bonds, options, and futures.

Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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