Top features you’ll love
Power E-Trade
Power E-Trade is the broker’s flagship trading platform, which it brought over from rival broker OptionsHouse, acquired a few years ago. The well-regarded web-based platform provides more than 100 technical studies and more than 30 drawing tools to help investors analyze the trading action.
It also provides tools to help you trade more profitably:
- Overlay technical patterns on the stock chart to help you understand what’s going on
- Show your risk-reward on options trades, breakevens and more
- Scan for unusual stock activity, such as high-volume stock and option trades
Other tools include a snapshot analysis, which provides a visual representation of the risk and reward of an options trade. Similarly, a spectral analysis tool offers visual representations of potential options scenarios. The platform also offers streaming of Bloomberg TV right onto your desktop.
Pros: Where E-Trade stands out
Funds without transaction fees
E-Trade offers more than 4,400 no-load, no-transaction-fee mutual funds, among the upper echelon in the industry. Yes, Interactive Brokers has more total no-transaction-fee mutual funds, but E-Trade offers more than enough funds to find what you need. Plus, you’ll be able to set up a recurring investment in mutual funds for as little as $25 per scheduled investment.
E-Trade offers all its ETFs commission-free, adding a solid complement to the wealth of mutual funds. Of course, while mutual funds and ETFs may not have a commission, investors still must pay the fund company’s expense ratio, which is deducted seamlessly from the fund itself.
Tradable securities
E-Trade offers the standard range of investment choices, including stocks, bonds, ETFs, options and mutual funds. That’s the core for most brokers, but E-Trade also provides one of the lesser-offered asset classes – futures. That offering puts it among a handful of brokers who allow customers to trade one of the fastest-paced and high-risk securities in the market. While that probably has limited appeal for newer investors, more advanced traders may find the addition a bonus.
E-Trade does not currently offer trading in cryptocurrencies directly, but you can purchase investments related to crypto such as futures or ETFs.
Discounted options commissions
Like most of the industry, E-Trade’s basic commission for stock and ETF trades has been slashed to $0. But unlike many rivals, the broker offers a discounted commission for options trades. The standard price is $0.65 per contract, but if you make more than 30 stock, ETF or options trades each quarter, the options commission declines to $0.50 per contract. So there’s definitely some incentive for high-volume traders to operate here.
E-Trade’s account minimum is just $0, so you can get started without adding any money to your account, though of course you won’t be able to buy anything until you fund the account. E-Trade has long offered no minimum for IRA accounts. No account minimum puts the broker in line with all the other major online brokers.
Trading platforms
The real standout here is E-Trade’s flagship platform, Power E-Trade, but the broker’s base platform, called E-Trade Web, offers a solid package, too. It’s for investors who don’t require all the advanced trading analysis but are still looking for a platform that helps source ideas.
The web platform provides streaming quotes, charts and market commentary. Its screeners will help you select the stocks, bonds or funds that meet your needs. You can analyze options trades and backtest trading strategies, and you’ll have access to research here, too.
And for mobile traders, the broker offers E-Trade Mobile, the base trading app. It’s available for both Apple and Android devices, including the Apple Watch. The app allows you to trade stocks, bonds, ETFs, mutual funds and multi-legged options, and you’ll be able to access Bloomberg TV, research and news as well.
The app also allows you to do a few of the more mundane financial tasks, such as deposit checks, transfer money and pay bills, so it’s not all about trading.
Customer service
E-Trade also stands out for its customer service, offering help through email, online chat and the phone 24 hours a day, 7 days a week. This level of service is seen at other major online brokers like Charles Schwab, but is rare among lower-tier brokers. You might not always be conducting your financial business during normal business hours and it’s nice to know that your broker will always be available to answer any questions you may have.
Research and education
E-Trade gets high marks here, too. The broker provides its own daily commentary on the markets and offers third-party research. Independent research includes stock reports from Thomson Reuters and TipRanks, and fund analysis from Morningstar, among others. It’s a broad array of research that’s offered to clients at no additional charge.
If you’re just getting started, E-Trade has you covered with tons of articles, videos and classes as well as a library of finance topics. You’ll also be able to attend webinars or live events on investing topics, from the basics to complex trading strategies for those looking for an edge. Plus, you’ll get E-Trade’s commentary on the markets and what’s trending.
Cons: Where E-Trade could improve
Account fees
E-Trade still charges those pesky “transfer out” fees when you want to move your money to another brokerage. And frankly it’s hard to blame brokers too much, because it’s a charge that may help incentivize you to stay, especially if you won’t be able to take advantage of a bonus offer with your new brokerage and offset that transfer fee.
E-Trade charges you $25 for a partial transfer or $75 for a full transfer, but it will waive the partial transfer fee if more than $5,000 remains in the account afterward. However, rival Fidelity has eliminated that fee, in line with its investor-friendly reputation.
Fractional shares
At E-Trade, you can reinvest your dividends into fractional shares. This allows you to roll the whole payout into more stock, which is a nice feature for investors looking to amass wealth. However, the broker does not allow investors to purchase partial shares, so you’ll be limited to buying whole share amounts. That puts the broker at a disadvantage to Charles Schwab and Fidelity Investments, both of which offer fractional shares on both dividend reinvestment and purchases.
Bottom line
E-Trade caters well to two different groups – beginning investors and more-advanced traders – that often have quite different needs and expectations. But the broker does a good job serving both adequately:
- Discounted options commissions (with a reasonable threshold) put E-Trade among the leading online brokers for commissions.
- The wide selection of no-transaction-fee mutual funds and research should be a boon for newer investors or those focused on long-term buy-and-hold investing with funds.
- The high-quality trading platforms and range of available securities make the broker more interesting for active traders, too.
If you’re looking to avoid having to reach a threshold to get your discounted options commission, check out Ally Invest, which offers a lower standard commission. Or check out Robinhood for no commissions at all. Investors on the hunt for a strong broker for beginners will find Charles Schwab, Fidelity Investments, and TD Ameritrade to all be highly capable and investor-friendly.
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