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E*TRADE Review

E*TRADE® is one of the most popular and well known online discount stock brokerages. Many of you are probably familiar with their advertising campaign which features the “E*TRADE Talking Babies” to help promote their services. E*TRADE is a publicly traded company under the symbol ETFC, and has a market capital of around $3 billion. The company has received many awards including being rated by Smart Money Magazine (Wall Street Journal) as the #1 Online Broker in 2007 and 2008. They also received 5 Stars for their Trading Tools, Mutual Funds and Investing Products, and their Banking Services. E*TRADE also always scores high for their excellent customer service and research capabilities.

The commissions at E*TRADE are on the high range within the industry but drop as you complete more trades quarterly. Stocks are $9.99 per trade, and $7.99 if you do 150 or more trades per quarter. Option pricing depends on your trading activity level, but starts at $9.99 plus $0.75 per contract. E*TRADE has recently done away with account inactivity/maintenance fees, which is a nice thing to see, and is really the standard with online brokerages these days. Although there are several competitors out there with better pricing, especially for options, what E*TRADE lacks in the pricing department, they certainly make up for with their great website and trading tools.

The E*TRADE interface is extremely easy to use. Entering new orders is easy, as well as closing out existing positions. Modifying and canceling orders is simple and efficient. E*TRADE’s research and trading tools are among the best in the industry. Smart Money Magazine recently gave the company a 5 Star Rating for their Trading Tools. Traders can spot trends and opportunities as they happen with unlimited real-time streaming stock quotes and advanced charting tools. E*TRADE’s most lavished feature is their Power E*TRADE Pro 5.0 technology. This premier no–fee, customizable trading platform, features direct-access stock and options order routing, sector and industry trackers, streaming news and watch lists, live streaming CNBC TV, and much more.

Another great feature that E*TRADE offers, is the opportunity for traders to seize global markets with the ability to trade listed stocks in Canada, France, Germany, Hong Kong, Japan, and the U.K. To really get a feel for what they offer, we recommend opening an account for free to get full access and check it out yourself. E*TRADE is currently offering 60 days worth of free trades so we highly recommend you taking a look into their brokerage.

Mobile trading is available via dedicated E*TRADE Mobile Pro apps for iPhone/iPod Touch, iPad, and Blackberry devices. You can also access a dedicated mobile website with a web-enabled device. The apps let you check real-time quotes and charts, trade stocks and options, modify existing orders, check portfolios and watchlists, get news, as well as make fund transfers between accounts. With the iPad you can even watch live streaming CNBC TV.

E*TRADE Mobile Pro for iPhone:

E*TRADE Mobile Trading iPhone App

E*TRADE Mobile Pro for iPad:

E*TRADE Mobile Pro for iPad

Customer support is award winning and available via phone and email, and now via live online chat support. For some issues you will have to use the phone, though.

Opening an E*TRADE Account:

The account opening process at E*TRADE is simple, as you’d expect from a large, well-known brokerage. The forms are well laid out and should be easy to complete in about 10 minutes. At the end of the application your account is open and you’ll get to the funding options page. As usual you can use the “Quick Transfer” ACH to transfer money from a bank account, or use a wire, mailed check, or account transfer from another brokerage. During the Quick Transfer setup you input the desired amount of the deposit. This is nice because it is a one step process to set up the ACH relationship and your initial deposit. The transfer should be instant, or show on the next day, but with funds transferred from an external (non-E*TRADE) bank account, you will have to wait until the 3rd business day after the deposit day (if transferred by 4PM ET) for the funds to be available for trading. The minimum funding level for opening a regular cash account at E*TRADE is $500 in cash or transferred equities.

Available Equities and Commissions:

  • Stocks/ETFs –
  • 0-149 Trades/Quarter – $9.99 Flat rate (Unlimited shares, Broker Assisted – Additional $45)
  • 150+ Trades/Quarter – $7.99 Flat rate (Unlimited shares, Broker Assisted – Additional $45)
  • Options:
  • 0-149 Trades/Quarter – $9.99 + $0.75/contract (Broker Assisted – Additional $45)
  • 150+ Trades/Quarter – $7.99 + $0.75/contract (Broker Assisted – Additional $45)
  • Futures – $2.99/contract/side + Fees
  • Mutual Funds – $19.99
  • Bonds – U.S. Treasury Auction and Secondary Trades – Free, Other Secondary Trades – $1/bond (min $10, max $250)

Other E*TRADE Details:

Annual/Maintenance Fees: None (Note: this has recently changed)

Direct Access Trading: Yes, additional $0.005/share ECN fee

After Hours Trading: Yes, additional $0.005/share ECN fee

International Trading: Trade foreign equities in 24 countries and 30 foreign exchanges in US dollars with Global Trading Account

Penson Cleared: No

Software Platform Based Data/Trading: Yes, Stand-alone Java based Power E*TRADE Pro, Available at no charge to Power E*TRADE active trader customers who execute 30 or more stock or option trades per quarter

Web Based Streaming Data: Available

Level 2 Quotes: Yes, Nasdaq TotalView and OTCBB/PinkSheet data free with Power E*TRADE Pro

Online Trading Community: No

Live Online Chat Support: No

Virtual/Paper Trading: No

Mobile Trading: Dedicated apps for iPhone, iPad, and BlackBerry devices, Dedicated mobile website

E*TRADE Account Pros:

-Award winning customer support

-Powerful Power E*TRADE Pro platform including live CNBC

-No account inactivity/maintenance fees

-Direct access trading available, additional $0.005/share

-International Trading available

-Futures Trading available

-Free Level 2 quotes with Power E*TRADE Pro (including OTCBB/PinkSheet)

-Great mobile trading apps, as well as mobile website

-Active traders will get a discounted commission

-NTF (No Transaction Fee) mutual funds available

-Nice banking features available (ATM fee refunds, free checking, online bill-pay)

E*TRADE Account Cons:

-Commissions are not the lowest, especially for infrequent traders

-Very expensive broker assisted trades

-Additional fee for after hours trading

-Some penny stocks sometimes have buying restrictions or require “phone-in” orders

The Verdict:

While the commissions are on the high end of the spectrum, especially for infrequent traders, E*TRADE does offer up some powerful tools and features. We are very impressed with the Power E*TRADE Pro platform, all of its features, and the ability to do direct access trading. While it is more expensive to use direct access, it is a nice option to have. The ability to trade on international markets in U.S. dollars is also nice if you have an interest in foreign stocks. The mobile trading apps and available banking features are also examples of what you get for the higher trade commissions. If you think you’ll need to do many broker assisted trades we suggest looking at another brokerage, such as OptionsHouse, optionsXpress, or TradeKing, which include these trades at no extra cost. Also, while E*TRADE doesn’t have any penny stock related fees, we feel it is a better idea to trade with a Penson cleared brokerage if you are into that kind of trading. Overall, if you are an active trader that will qualify for the discounted commissions, or if you don’t mind paying extra to get all the bells and whistles, E*TRADE is a good choice for an online brokerage.

- E*TRADE Sign-up Promotion -

Click one of our links and trade FREE for 60 days when you open a new Power E*TRADE Account and fund it with a $2000 minimum deposit. Up to 500 commission free trades. Please click the link below and see the E*TRADE website for more details.

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Last Updated on April 1st, 2014 at 10:24 AM

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