Etrade is one of the most established online trading brokers. This is partly the result of their marketing efforts, but also because they promise a user-friendly platform, extensive resources and competitive costs. This Etrade review will detail all aspects of the offering, including their history, account, commission and product list.
Brief history
Before you sign up to start day trading, it helps to understand how Etrade has evolved. The company came to life in 1982 when William A. Porter and Bernard A. Newcomb founded TradePlus in California with only $ 15,000. Then in 1991, Porter and Newcomb formed a new company, Etrade Securities. They began offering trading services through America Online and Compuserve. By 1994 revenues had nearly reached $11 million, an impressive jump from $850,000 in 1992.
Just two years later the company has 73,000 customers and processes 8,000 trades per day. Not to mention quarterly revenue was an impressive $15 million. In June 1996 the company was then launched through an initial public offering (IPO).
In early 2000, it looked like Etrade would merge with TD Ameritrade. However, disagreements over pricing rights and governance prevented this deal from succeeding. Instead, Etrade acquired two former discount brokers, Harrisdirect plus Brown & Company.
As a result of many business deals, E-Trade now has its headquarters in New York, as well as other office locations around the world. Their growth also means they can offer trade in:
- Shares
- OTC penny stocks
- ETFs
- Forward
- Options
- Bond
- Mutual fund
Some people are not sure if Etrade is a market maker. The answer is that G1 Execution Services LLC is the market making unit of ETrade Finance Corporation. However, the enterprise was sold to Susquehanna International in 2013.
Minimum Initial Deposit
One of the requirements if you want to start day trading with Etrade is that you pay a minimum $500 direct account deposit. While there are alternatives that offer lower minimums, $500 is pretty much the industry standard.
Spreads & Commissions
The outlook for consumer trading has been mostly positive in terms of broker fees. Once you open an account, you can expect the same prices as their main competitors, TD Ameritrade, Fidelity and Charles Schwab.
This means that if you’re looking for heavily discounted commissions, you may want to look elsewhere. Having said that, many argue that you pay more because you get more, including powerful trading tools and valuable additional features.
A standard stock trade is $6.95, plus an additional $.75 per contract. There are also volume discounts. This means that active traders can get rates as low as $4.95 + $0.50 if they make more than 30 trades per quarter.
Additionally, Etrade offers commission-free ETFs. While they don’t quite offer the 296 no-fee ETFs found at TD Ameritrade, they still promise 225, putting them third in the industry rankings.
Leverage
Reviews and ratings show Etraders are satisfied with leverage options. Once you open a margin account, you can borrow up to 50% of eligible equity to buy products. Proper use of margin can help you take advantage of opportunities and increase your income.
It also allows you to speculate on many markets, from foreign stocks and gold to cryptocurrencies, such as ethereum, ripple and bitcoin. However, you should check the futures margin requirements for your account type.
You also need to remember margin calls and high rates can see you actually lose more than your original account balance. Therefore, caution must be taken and whether this type of trade is worthwhile depends on the individual trader.
Other Trading Fees
There are no inactivity fees for intraday traders. However, you have to pay a transfer fee of $ 75. In fact, the reviews of the day trading broker are impressive that the price structure of Etrade is quite transparent, ensuring that users will not be caught with hidden fees.
There is also good news in terms of promotions and bonus offers. The bonus account can see you benefit from 60 days of commission-free trading when you deposit $10,000. In addition, brokers sometimes run refer-a-friend schemes. Requirements vary, so go to their website to see how it works.
Trading Platform
Once you open an Etrade account and log in, you will have a choice of three trading platforms. Although all can be used to trade various markets and instruments, broker review forums have highlighted certain strengths and limitations for each option.
Etrade Web
Customer reviews of the web platform are quite positive. You get access to streaming market data, free real-time quotes, and market analysis. The user interface is quite sleek and easy to navigate. For example, from the dashboard, you can track accounts, create checklists and execute trades.
In addition, Etrade offers easy-to-follow user guides and tutorials so you can use most of the web system. Tool reviews have emphasized, however, that web platforms are probably best suited for beginners who don’t need advanced trading tools.
OptionsHouse
Etrade bought the well-established OptionsHouse trading platform in 2016. The platform’s reviews and options show it is a better choice for those who want to actively trade, rather than holding long positions. You can get a lot of real-time data, tickers and dozens of charting tools. In fact, you get:
- File notes with each trade
- Various level options
- 100 technical studies
- Stop quoting
- Options chain screen with 30 customizable columns
- The risk/reward is broken down into detail and even uses smiley faces to represent benefits and drawbacks
You also get access to a news feed and can find extensive educational resources that will help you learn how to get it. It’s also worth highlighting OptionHouse Etrade is not just for options trading. It can also be used for equity and futures trading. So buying bitcoin, litecoin and trading Nasdaq or S & P 500 index funds is also possible.
Overall, the platform promises speed, innovation and many trading tools. But as reviews for beginners have shown, perhaps its greatest strength is ease of use for new users.
Platform Pro
Once you’ve finished downloading Pro, as a quick review shows, you’re welcomed into the world of advanced trading. The desktop platform is sleek and packed with idea generation tools, including a Strategy Scanner feature. There are high levels of customization and backtesting capabilities as well.
If you want to track stocks you can use the MarketCaster function. It opens with an additional window and is Etrade’s real-time streaming quote tool.
Highlights of the Pro platform include:
- Level 2 quote
- Real time sales
- 31 drawing tools
- Over 20 trading tools
- Various types of prices
- 118 technical indicators
- Real time strategy scanner
- Bloomberg TV live streaming
- An extended chart from the IQ Chart
- Many options trading tools, including Options Screener, Options Analyzer and Strategy Optimizer
There are distinct drawbacks to the Pro platform though. You must make at least 30 traders a quarter and hold a portfolio balance of $250,000. Otherwise, access will set you back $99 per month. At this point, it is worth pointing out that both TD Ameritrade and Charles Schwab facilitate access to their two flagship platforms without such criteria.
Also, you cannot see alerts on the chart. The last drawback is that you cannot save indicators as individual sets. Instead, you must save the overall chart view as a custom profile.
Etrade Mobile App
Reviews of the Etrade mobile app are overwhelmingly positive. In fact, many argue that their offerings are among the best in the industry. There are two free mobile apps. Once you have activated your account and downloaded the application you are free to manage your account and enter and exit trades. To help you do that, you can:
- Real time quotes
- Interactive chart
- Fast transfer
- CNBC on Demand
- International markets, including cryptocurrency
Also, placing trailing stops, limit orders and accessing after-hours trades is painless.
Advanced App
The OptionHouse app offers a sleek design and ease of use. Once you have your account login details, you get custom stock screening and third-party research ratings from within the app. The ChartIQ engine is also used in mobile applications. One useful feature it brings is that any note you add to a chart on Etrade Pro will appear on the same chart on your mobile device. These include drawings, trendlines and channels.
In addition, you can take ten of Etrade’s 118 studies to your mobile device. However, to use this feature, you must have access to Etrade Pro.
But despite the positive iPhone and Android reviews, there are some complaints. For example, the app supports only ten indicators, which is well below the industry average of 36.
Overall, even for dummies, the mobile app is quick and easy to get to grips with. In fact, global financial trading surveys often rate the Etrade app as the best in the industry.
Payment method
Once you open your brokerage account, you need to transfer money to and from your bank account.
Fortunately, there are several ways you can go about deposits and withdrawals, including:
- PayPal
- Western Union
- Wire transfer – This is the fastest method and funds in your account the same business day. However, you may be charged an international wire transfer fee, the value of which depends on your location. You can find wiring instructions on the Etrade official website.
- Debit & credit cards – Visa and most other cards accepted.
- Mailing a check – You can make a deposit at your local E*trade branch. Transfers usually take five working days.
You should be able to see how much is available for withdrawal directly from within your account. Note that withdrawal times will vary depending on the payment method.
Financial investment and trading reviews are satisfied with the current payment methods offered, as they are fairly industry standard.
The main benefit is that Etrade truly provides international trading as the above methods are available regardless of location, whether you are from India or the US.
Etrade account
Etrade offers several options in terms of accounts, from joint brokerage accounts to managed accounts. A typical day trading brokerage account is relatively easy to set up. Just go to their homepage and follow the on-screen instructions. You need at least $500 to open their broker account, which can be deposited via bank transfer, mail or deposit to one of your local Etrade offices.
If you choose an alternative account type, you may need to upload documents and meet other criteria. In addition, there may be additional fees if you choose a personal investment account from Etrade Capital Management, which includes:
- Core Portfolio
- Blend Portfolio
- Dedicated Portfolio
Demo Account
Unfortunately, Etrade does not offer a free demo account. This is a shame because the direction taken by most brokers since 2018 has all moved towards allowing users to register themselves in virtual trading. They provide the perfect opportunity for novice traders to build confidence and learn how to react to market events, before risking real capital. Therefore, the lack of practice accounts is a serious drawback to Etrade’s offer.
Additional features
Research
Etrade reviews are quick to point out there are some valuable additional resources available. In particular, conducting research is easy. For example, once you’ve pulled a quote for Amazon (AMZN), you can:
- Summary of key statistics
- Daily price action mini chart
- Price analysis from Trefis Research
- Buy and sell buttons
- Signal setup
- Headline
In addition, Etrade provides third-party research from:
- Thomson Reuters
- SmartConsensus
- morning star
- MarketEdge
It’s worth noting that this is less than competitors, such as Fidelity and TD Ameritrade which provide at least six.
Fortunately, Etrade users can also benefit from fans of stocks, options, ETFs, bonds, and mutual funds. Stock tracking facilitates filtering by third-party ratings from its research partners. The main issue, however, is that many visual fans are dated and therefore result in a less pleasant user experience.
Etrade Education
Fortunately, the education section is very extensive. Traders can find articles, training videos, webinars, user guides, audio help and more. There’s everything from the basics of comparing exchange rates and hotkeys to sophisticated options for uninvested cash.
Automated Trading
You can also explore automated trading with E*Trade. You can connect industry leading applications directly to Etrade. An open XML-based Application Programming Interface allows users to customize solutions. Alternatively, you can choose from a number of providers, including:
- IonDESK
- TradeLens
- Roboinvest
- Investor Hub
- Automated Trading Trader
The right robo-advisor can help you increase your profits. You can simply run more trades than you can manually. However, as API reviews highlight, they come with risks and require consistent monitoring.
Rules & Licenses
Many people just want to know if Etrade is a good company that can be trusted. In fact, this element of trust is becoming increasingly important for users, who understandably care about being hacked or falling foul of dishonest brokers. That’s why it’s important to check your broker is properly regulated.
Fortunately, Etrade complies with regulations from several bodies, including the SEC and FINRA. As a result, clients can rest easy knowing their capital will be protected in various scenarios. But more importantly, Etrade has to comply with various rules and regulations designed to protect consumers.
As a result, non-US citizens can also Etrade with confidence, whether it’s London exchanges or commodities like gold and platinum that pique your interest.
Etrade benefits
If you are thinking about investing with Etrade, user reviews show several different benefits, including:
- Beginner friendly – Etrade is great for new traders. Registration and filling out forms is quick and easy. You can use a simple web-based platform and benefit from various educational resources.
- Volume discounts – On top of low option fees and free trading, Etrade also offers volume discounts for active traders.
- Low minimum requirements – Entry requirements are low and users do not need to maintain a significant minimum balance.
- Extensive resources – futures and options reviews are particularly interested in the wealth of information, data and useful user guides available.
- Industry-leading mobile apps – Both mobile apps ensure a smooth transition from desktop-based trading platforms.
- Security – Part of the financial login process is a 2-factor authentication system that should significantly reduce the risk of hacking.
- Diversified assets – You can speculate on the price of stocks, options, bonds, mutual funds and ETFs.
- 24/7 customer service – Reliable support is essential, especially for new traders. Fortunately, Etrade promises live chat, phone and email support to answer any questions.
- Accessibility – You can tell the founders and owners of Etrade really want to promote global trade, as users from Germany to Australia are all welcome.
All of these factors have helped Etrade increase their market capitalization and highlight their advantage over competitors, such as Interactive Brokers, Robinhood, Fidelity and Scottrade.
Disadvantages of Etrade
While there are many benefits, customer and company reviews have also identified some downsides to keep in mind, including:
- No forex trading – Those wanting FX commentary will be disappointed, as Etrade does not offer currency trading.
- High commission – Although it scores well in several price areas, the standard commission of $6.95 is above the industry average.
- No demo account – Etrade currently does not offer a free practice account for potential traders. This means that users cannot explore paper trading to learn about the market or test trading platforms.
- Pro platform limitations – To use the Pro platform you need $250,000 in assets. A review of Etrade vs Schwab, Ameritrade and Scottrade is quick to highlight that no such requirement is imposed for access to their flagship platform.
So, is Etrade any good? The answer will depend on which of the above benefits and drawbacks are most important to you.
Trading Hours
Etrade is neither good nor bad in terms of trading hours. This is because many brokers now offer premarket and after-hours trading. However, clients can trade specific ETFs 24 hours a day, five days a week.
For detailed information:
- You can trade Sunday 20:00 to Friday 20:00 ET, excluding market holidays.
- You can trade by phone from 4:00 a.m. to 7:00 a.m. ET, excluding market holidays.
- Trades will be available on SPY, QQQ, USO, GLD, FXI, EEM, DIATLT, IWM, SLV, SH and UNG.
So, whether you hold a standard, business or international account, there are many opportunities to speculate in the market.
Contact & Customer Support
For almost any query there is an Etrade customer service agent who can help you. In fact, they promise 24/7 phone and online chat assistance. Visit their website to find contact phone numbers in your region. They can then offer technical assistance if your account isn’t working or simply help you log out.
You can also find a postal address for your local office or you can go into a local branch.
In addition, you can access a customer service representative directly from your account. From there you can send secure messages and update any account information. You can also upload documents.
Having said that, Etrade does try and encourage users to find their own answers by going to their FAQ page. There you can find answers on how to close an account, the cost of the Pro platform and information on advanced hourly trading.
Note customer service agents cannot provide tax advice.
Overall Etrade is good for day trading in terms of customer support. However, those who want live help may want to look elsewhere, as some discount brokers now offer live video chat support.
Safety & Security
Once you sign up for your global trading account, Etrade takes customer care seriously. As a result, they use an external account verification system. The two-factor authentication tool comes in the form of a unique access code from the free app. You just enter this when you type your password each time.
In addition, advanced encryption technology is used to protect personal information and all transaction activities. In addition, Etrade will cover any losses caused by unauthorized use of their services.
Etrade results
Etrade financial corporation has built a strong reputation over the years. They have been reliability, research and extensive mobile applications. However, Etrade is definitely not the cheapest broker around, although active traders may benefit from the tiered commission structure.
Overall, Etrade’s stock trading, futures, options, mutual funds and automated investment reviews all rank highly. Their comprehensive offering ensures they can meet the needs of both new and veteran traders. Additionally, the acquisition of OptionHouse in 2016 demonstrates their commitment to innovation.