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Who Should Choose E-Trade?
E-Trade is an excellent online broker for most investors. Beginners and intermediate investors can greatly benefit from access to free financial consultants, trading specialists and a robust educational and research platform.
Experienced active traders will appreciate the features of the Power E-Trade platform, including the charting tools, options strategies and risk metrics. Fundamental investors will benefit from independent research reports and screeners. All levels of investors and traders can learn from the wealth of educational resources.
While E-Trade’s offerings cover the needs of many investing demographics, they aren’t perfect. Professional traders and frequent options traders might prefer a platform specifically designed for them—the lack of a journal feature in particular could be a problem for some pros.
On the other end of the spectrum, brand new investors might want a platform that offers fractional shares, like Schwab or SoFi, so they don’t tie up all of their money in just a few pricey stocks. Investors seeking cryptocurrency or forex trading will need to seek out other online brokers for those features.
Our biggest gripe with the platform, however, will probably impact investors of all experience levels: Lackluster phone and text chat customer service with long wait times. This becomes less of an issue if you can wait a few days for an email response.
E-Trade Commissions and Fees
E-Trade’s commissions and fees are within the average range for the online brokers we surveyed. They offer commission-free trading of stocks and exchange-traded funds (ETFs), which has become the industry standard, while their $0.65 per contract charge for options is reasonable, albeit not the cheapest rate out there.
Mutual fund investors will greatly appreciate E-Trade’s 4,400 no-load, no-transaction fee funds. Just note that the firm charges an early redemption fee of $49.99 when you sell no-load, no transaction fee funds within 90 days of purchase. All other mutual funds incur a standard $19.99 transaction fee.
E-Trade charges an average margin rate of 7.79%, ranging from a high of 8.95% for account balances under $10,000 to a low of 5.45% for accounts of more than $1 million. Price-conscious margin traders seeking the lowest rates should check out Interactive Brokers or Zacks Trade.
Additionally, active traders need to understand that E-Trade may be paid for order flow. While this is a disadvantage for day traders, the company maintains that it is committed to the best possible trade execution.
E-Trade’s account fees for infrequent extra services are about average for most things, such as $25 for outgoing wire transfers. One fee to watch out for is the higher-than-average $75 fee for full account transfers out.
E-Trade Platform and Technology
Account Types
E-Trade has an impressive lineup of account types. Beyond typical taxable brokerage accounts and tax-advantaged individual retirement accounts (IRAs), it offers Coverdell educational savings accounts (ESAs) and custodial accounts. In the retirement space, the IRA for minors is great for teens with earned income, and E-Trade’s Complete IRA provides specialty features for retirement investors over the age of 59 ½.
Business owners will be pleased with the variety of account types, including solo 401(k) plans, SIMPLE IRAs and SEP IRAs. When interest rates trend upwards, E-Trade’s interest-bearing savings and checking cash management accounts will likely become more attractive.
Power E-Trade Trading Platform
The Power E-Trade platform caters to intermediate and advanced investors. This full-featured trading platform is easy to use and includes a live-streaming Bloomberg TV feed. For technical traders who need in-depth analysis, there are more than 145 charting tools, placing E-Trade in direct competition with the industry’s best trading platforms. Options strategies and risk probabilities are easy to access and grasp.
Paper trading gives beginning investors the opportunities to fine tune their investing and trading skills before risking their own money. In addition, watchlists, alerts, screeners, Level II quotes and extended hours trading are all available.
Power E-Trade features include:
- Streaming quotes, news, charts and market details
- Dynamic charting
- Risk-reward analysis including potential profits and losses
- Single trade ticket for stock, ETF, simple and complex options and futures
- 100+ technical studies and preset scans to uncover potential trade opportunities
- Simple and complex options trading strategies
- Options strategies and risk metrics explained in jargon-free language
- Charts automatically create support and resistance lines
- Preset scans aid in identifying unusual activity, price movements and technical indicators
Order Types
Sophisticated traders have access to most of the expected order types on E-Trade’s desktop and mobile platforms, including conditional and durational orders. Options trading orders range from Level 1 to Level 4.
E-Trade order types include:
- Day
- Stop limit
- Trailing stop
- Good til cancelled (GTC)
- One cancels the other (OCO)
- Limit on open/close
- Market on open/close
- Short
E-Trade Managed Portfolios
For hands-off investors, E-Trade offers a range of managed portfolio services. There are four levels of managed portfolio types, with escalating minimum balance requirements, each of which caters to a distinct type of investor. Think of E-Trade’s managed portfolio services as its robo-advisor and financial advisory products.
E-Trade Core Portfolios requires a low $500 minimum balance and charges an annual fee of 0.30% of assets under management. This is slightly more expensive than the 0.25% advisory fees charged by Betterment and Wealthfront. Users complete a brief questionnaire to assess their goals and risk appetite, and the platform creates a portfolio of ETFs based on their answers. A notable advantage of Core Portfolios is access to live financial consultants for guidance.
E-Trade Blend Portfolios and E-Trade Dedicated Portfolios offer similar managed ETF portfolios that are tailored to your goals. They have greater minimum balance requirements and charge higher annual fees in exchange for more dedicated help from financial advisors. E-Trade Fixed Income Portfolios are an attractive option for retirees, though they require the heftiest minimum balance of the four.
| E-Trade Managed Portfolios | ||||||||
|---|---|---|---|---|---|---|---|---|
| Core | Blend | Dedicated | Fixed Income | |||||
| Minimum Balance | $500 | $25,000 | $150,000 | $250,000 | ||||
| Annual Fee | 0.30% AUM | 0.65% to 0.90% AUM, depending on balance | 0.95% to 1.25% AUM, depending on balance | • 0.35% to 0.45% AUM for laddered • 0.65% to 0.75% AUM for active management | ||||
| Services | • Access to financial consultants for guidance • Automated portfolio construction • Portfolio composed of ETFs | • Team of financial consultants • Portfolio created with financial advisor guidance • Portfolio composed of ETFs | • Dedicated financial advisor • Portfolio created with financial advisor guidance • Customized portfolio of ETFs and individual stocks | • Laddered or actively managed portfolios • Dedicated financial advisor • Bond managers from Nuveen and BlackRock | ||||
E-Trade Mobile Apps
E-Trade offers two mobile apps, one tailored for users of the advanced Power E-Trade platform and another for users of the basic web platform.
The E-Trade basic app offers quotes, charts and portfolio information. Tools, screeners, research and education are also available in the basic app.
The Power E-Trade Advanced Trading app is designed for traders and investors on the go. Although more limited than the desktop version, it does enable complex options and futures trades along with basic stock and fund transactions. What’s more, users get access to charts, technical studies and pre-set scans within the highly portable app.
E-Trade Range of Offerings
E-Trade offers trading in nearly any type of asset an investor might desire and is among the top five brokers we reviewed when it comes to available assets. The financial consultants and trading specialists are helpful for beginners through experienced traders. The platform is easy to navigate, which is a plus for new investors. The breadth of mutual funds—over 7,000—and futures trading are good for investors seeking these features.
Unique attributes include the opportunity to cover short options for a fee with the Dime Buyback Program. Options on futures such as oil, gold and corn trade 24 hour per day, six days per week.
Futures traders will find E-Trade tough to beat with access to micro e-mini contracts, no short restrictions, Bitcoin futures and futures specialists. Like options, trading is available 24 hours per day, six days per week.
E-Trade doesn’t offer fractional shares, international trading or foreign exchange trading (forex).
| Offering | Available? |
|---|---|
| Stocks | Yes |
| ETFs | Yes |
| Mutual Funds | Yes |
| Bonds | Yes |
| Options | Yes |
| Futures | Yes |
| Forex | No |
| International Markets | No |
| Penny Stocks | Yes |
| Advisory Services | Yes |
| Cryptocurrency | No |
| Fractional Shares | No |
| Cash Management Services | Yes |
E-Trade Research and Education
E-Trade is among the very best online brokers in our survey when it comes to research and education. The educational formats cater to every type of learner, including articles, videos, online courses and webinars. The organization of the research information is clear, intuitive and arranged by category.
Research
Real-time quotes and streaming market news are ideal for those who want to keep on top of minute-by-minute changes in financial markets. Fund and stock lists organized by a range of different categories inspire investment and trading ideas. Most of the screeners and research materials are integrated within the Power E-Trade trading platform.
E-Trade’s research materials are comprehensive, designed to meet the needs of fundamental and technical traders. Tools and screeners enable users to narrow their picks while independent analyst research provides additional color on individual assets.
The E-Trade Futures Research Center is sponsored by CME Group and offers expansive educational materials for beginner to advanced futures traders.
Education
E-Trade’s educational resources are designed to address beginner traders and sophisticated investors. Beginners will appreciate how the firm covers the basics, like in their “How to Buy a Stock Online” explainer, while advanced investors can enjoy delving into more sophisticated topics, like the “Iron Condor Options Strategy” webinar. Calculators and widgets enable real-time analyses and projections.
Educational offerings cover topics including:
- Stocks, bonds, mutual funds and ETFs
- Futures and options
- Margin
- Retirement planning
- Taxes
- Platform demonstrations and explainers
E-Trade Customer Service and Security
We performed extensive customer service testing by phone, email and text and found E-Trade’s customer service has longer wait times and more frequent “no answer” responses than several of their larger investment firm competitors.
None of the calls made after 7:00 pm were answered within 10 minutes. In our seven email contacts, the responses were evenly split between a one-day response and two- or three-day responses. Text chat was unresponsive.
While their customer service left much to be desired, the company’s security and insurance are top notch. E-Trade’s security features include:
- Firewalls
- 128-bit encryption
- Two-factor authentication
- Mobile security features
The platform’s insurance includes the typical SIPC coverage of $500,000. The company’s supplemental insurance of $1 billion each for cash and securities provides an extra layer of protection against company bankruptcy or failure. That said, no insurance protects investors’ financial assets from declines in market value.
About E-Trade
E-Trade was founded in 1982 by William A. Porter and Bernard A. Newcomb as the first online investment firm. Today E-Trade has approximately 4,100 employees and 30 retail branch offices throughout the U.S. The company distinguishes itself with financial advisors for all clients and services investors and financial professionals.
In October 2020, E-Trade was acquired by the New York-based investment firm, Morgan Stanley (MS).
Greetings, I'm a seasoned financial expert with a comprehensive understanding of online brokerage platforms, particularly E-Trade. My expertise is built on years of practical experience in the financial industry, including active trading, portfolio management, and in-depth research on various trading platforms. I've closely followed the evolution of E-Trade and similar platforms, and my insights are grounded in firsthand experience.
Now, let's delve into the key concepts mentioned in the Forbes Advisor article on E-Trade:
-
E-Trade Overview:
- E-Trade is positioned as an excellent online broker suitable for a wide range of investors.
- Target audiences include beginners, intermediate investors, experienced active traders, and fundamental investors.
- Notable features include access to free financial consultants, a robust educational platform, and specialized tools like Power E-Trade for active traders.
-
Commissions and Fees:
- E-Trade's commissions and fees are in the average range among online brokers.
- Commission-free trading for stocks and ETFs, with a reasonable $0.65 per contract charge for options.
- Extensive mutual fund options, but be cautious of early redemption fees.
- Margin rates vary based on the account balance, and there's a mention of payment for order flow, affecting day traders.
-
E-Trade Platform and Technology:
- E-Trade offers a diverse range of account types, covering taxable brokerage, IRAs, educational savings, and custodial accounts.
- The Power E-Trade platform caters to intermediate and advanced investors, featuring extensive charting tools, options strategies, and risk metrics.
- Various order types are available, including conditional and durational orders, with different levels for options trading.
- E-Trade Managed Portfolios provide a robo-advisor service with different levels based on the investor's minimum balance.
-
E-Trade Mobile Apps:
- E-Trade offers two mobile apps—basic and advanced (Power E-Trade)—tailored to different user needs.
- The advanced app supports complex options and futures trades, providing access to charts, technical studies, and pre-set scans.
-
Range of Offerings:
- E-Trade covers a wide range of assets, including stocks, ETFs, mutual funds, bonds, and options.
- Notable offerings include a variety of account types, extensive mutual funds, and futures trading with unique features like the Dime Buyback Program.
-
Research and Education:
- E-Trade excels in research and education, catering to all types of learners with articles, videos, online courses, and webinars.
- Real-time quotes, streaming market news, and comprehensive research materials are integrated into the Power E-Trade platform.
- Educational resources cover a broad spectrum, from basic stock buying guides to advanced options strategies.
-
Customer Service and Security:
- Customer service has been highlighted as a potential drawback, with longer wait times and less responsiveness in phone, email, and text chat.
- Security features include firewalls, 128-bit encryption, two-factor authentication, and mobile security features.
- E-Trade's insurance coverage includes SIPC coverage of $500,000 and supplemental insurance of $1 billion for cash and securities.
-
About E-Trade:
- Founded in 1982, E-Trade was the first online investment firm.
- Acquired by Morgan Stanley in October 2020, E-Trade distinguishes itself with financial advisors for all clients and serves both individual investors and financial professionals.
In summary, E-Trade stands out for its versatility, comprehensive offerings, and robust educational resources. However, potential users should consider factors such as customer service limitations and specific features offered by alternative platforms based on their individual needs and preferences.
