E*TRADE is one of the leading online discount brokers that many new traders consider. Choosing a broker is not always as simple as it may seem so it’s important to educate yourself. We’ll discuss the pros and cons and help you decide if it’s right for you.
When you get into trading and stocks, you’re going to need a platform to trade on. This is actually one of the problems when you first start trading because you need to invest in a quality platform if you want to succeed, especially with day or swing trading. One of the most well-known platforms you can use for trading is known as ETrade.
They are a massive company/platform that has been around for a long time. They have a huge number of tools and technology that allow you to execute solid trades and research your markets. With their trading platform, you’ll have all the options you need to maintain your daily trading.
ETrade can work for the majority of traders and can be used to perform trades, invest and develop ideas. They have an array of features that give users a lot of power, so you’re probably curious to see what this software can do.
I went ahead and trialed ETrade to see what all the fuss was about. I had heard great things about the platform but wanted to try it myself so I could offer a conclusive review. After all, you’ll be putting your hard-earned money into this platform, so you’ll want to get everything you can from it. Continue reading to find out more about this platform.
- Mobile friendly
- Huge range of features
- Education center is organized well
- Get options dashboard
- Not great for casual investors
- The Pro version requires either 30 trades a quarter or $250,000 in assets
- The customer service is average
- Commissions are quite high
Firstly, we will go into the commissions and how much you will be charged for trading with ETrade, as this is one of the biggest concerns that most people have. The one thing I noticed about ETrade is that they’re a little more expensive than most other brokers like Robinhood and Ally Invest.
They are also tiered, so the more trade you make the cheaper the commission. This is fantastic for swing and day traders who are making trades every day, but not so great if you’re casual investor who only dabbles in the platform. Before you can actually start trading, you will have to place a deposit of $500, which is manageable if you’re looking to get into trading. As with all brokers, the commission varies for different investments.
If you’re looking to get into standard day trading (like myself), stocks will cost you $6.95 a trade and can drop to as little $4.95 if you make 30 trades within a quarter. Both options and ETFs will also cost you $6.95, with options having a $0.75 fee (which drops to $0.50 with enough trades). If you are into trading futures, you will be subject to a $1.50 commission, and if you trade bonds, the commission will sit at $1. With both futures and bonds there is a no tiered fees. If you would like some assistance from the broker in your trades a $25 fee will apply to all trades made.
As I have already stated, ETrade requires a $500 deposit but doesn’t charge any annual or monthly fees. Something that I particularly liked about ETrade is the 2,500 transaction-fee-free mutual funds! However, as I mentioned beforehand, this platform is a little more expensive than others. So if you’re on a tighter budget, you might want to look elsewhere.
Because ETrade is a massive company, they have a staggering number of features you can mess around with. Moreover, they also like to buy other platforms and merge them with their existing software. This way, you get some great applications, like OptionsHouse which is now an added application on ETrade. I will go through the features one-by-one so you know what to expect when you invest in ETrade.
The first thing I would like to talk about is their mobile application. I originally thought this was a bit of a gimmick but it was actually incredibly useful. If you didn’t know already, ETrade have their very own mobile app and it tells you all sorts of useful information.
You maybe shouldn’t use the app to make trades, but it is great for when you want to watch a stock without having to be at a computer screen. It was nice to get out of the house during trading hours and allowed me to watch and close positions at the right time.
The app is also very powerful as it can livestream level 2 data without any problems and it is very easy to navigate around the different sections. If you plan on using ETrade, you should download the app and use it, regardless if you don’t think you’ll use it.
While the app is helpful, it fails to compare to TD Ameritrade‘s Thinkorswim mobile app.
Research and Market Insight
Research and market insights are incredibly important factors to consider when you’re looking for an online broker. If you don’t know what’s going on in your market, you could make a big error when it comes to closing a position when you should have done. However, saying this, it does sometimes depend on the stock you’re looking at. Some are more effected by news and press than others.
ETrade offers a decent amount of insight into the markets, allowing you to perform some great research before you take a position. Admittedly, they do full short in the number of third party research platforms they allow, but there is still enough there considering this is a discount broker. I will say this however: their platform and dashboard are a little outdated and believe a little spring cleaning is in order. Their platform is easy to navigate and bringing up quotes is dead simple, showing lots of information. It’s just that the dashboard looks like it’s from an early version of Windows.
As for the third party platforms, ETrade gives you access to Reuters, Standard & Poor’s, MarketEdge, and SmartConsensus. As I said, this falls short of the stack that you usually see in online brokers like Fidelity.
When I first logged on to the platform, I was greeted by ETrade Web, which is their internet/online gateway that all standard customers will have access to. On first impressions, the dashboard was very well laid out and had all the information there ready for me to use. This is the side of ETrade that the majority of users will stay. However, in most cases, this side will be where the long-term traders go. The dashboard has a ton of education content and stats that are incredibly helpful where you’re checking on your orders.
All the data is streamed live and there’s a lot of customization you can mess around with. From the same dashboard, you are able to track your account and your portfolio, and can engage in some more complex trading options. Overall, the ETrade Web is great and has all you need if you want to start trading.
While the regular website is enough to place some trades, the default website is much stronger with a broker like Fidelity.
If you want to kick it up a notch, ETrade offers a Pro option for short-term/frequent traders. This platform gives you more detailed charts and level 2 data. However, the admission fee is very hard and not a lot of traders will be able to get in. If you want to get access to Pro, you will need to make at least 30 trades a quarter or to have $250,000 in assets. The monthly fee for this is $99. However, if you perform 30 trades in a quarter, you get it for free. This is quite a high price when you consider the competition. The Pro version will most likely be used by the day trading and swing trading communities, who are making frequent trades and who will benefit from the lower commission fees and more detailed statistics.
Charts and OptionsHouse
The charts and analysis that ETrade offers is fantastic and I enjoyed researching and using the stats to help me make trades. They have the usual functions and indicators and they can be linked to news and level 2. Technical indicators are integrated into the charting and the platform includes all the standard indicators, including moving averages, Bollinger bands and Stochastics. The level 2 data is only given in the Pro version of ETrade and allows you to make trades in under a second. The data is point and click and was my personal favorite when it came to placing orders.
As the subtitle suggests, ETrade is now fully integrated with OptionsHouse. This was once a standalone platform that specialized in Options and offers insight and strategy into the trading of Options. ETrade bought the platform and users can now use it to help them when they’re trading. This platform offers great depth when you’re trading and can be used with stocks as well. However, when trading stocks, I personally preferred to use Pro.
ETrade had excellent customer service that responded quicker and professionally to our issues. It is important to have quick customer service in this industry because you may be holding on to a trade that could lose you a lot of money. E*Trade phone support wait times are generally minimal (or nonexistent). The support staff is friendly, knowledgeable, and efficient.
The live chat option also offered quick and helpful advice. It is important to note that they did have self-serving options as well, including educational content and a FAQ section.
ETrade is one of the biggest online brokers on the market and they are used worldwide. They allow normal individuals to come in and start investing in the stock market, offering great tools and friendly customer service. Their dashboard offers all the standard trader would need to execute good trades and it more suited for the day/swing trader who will be making regular trades. This is because the pricing is tiered, so the more trades you make the cheaper it will be. With 30 trades in a quarter, you will get free access to their Pro platform, which gives you more charts and level 2.
Although their platform is more expensive in terms of commissions, this is a well-known and trusted platform to use if you’re looking to get involved in trading. Because of this, I would happily recommend it to any trader of any level.