Top Rated For:

• Best for Ease of Trading Experience
  
• Best Broker for Beginning Options Traders

Our Take

E*TRADE is one of the largest online brokers in the country. It offers an expansive range of investment choices and trading tools that are accessible through the website, desktop and two mobile apps. A vast educational catalog combined with an intuitive site design lets new investors enter the market with confidence. More experienced investors can leverage a wide array of analysis tools, charting functionality, and research capabilities to pursue their preferred trading strategy. However, some advanced features are not supported, like direct crypto exposure and international exchange trading. Overall, E*TRADE offers a well-rounded platform that serves all types of investors.

Company Overview

E*TRADE has been a leading broker in the industry since its founding in 1982, constantly embracing innovation to drive change across the industry. In the early ‘90s, E*TRADE capitalized on the evolution and widespread adoption of the internet to build and enhance its online platform, bolstering its reputation as a dynamic, powerful trading service. By 2020, Morgan Stanley agreed to acquire E*TRADE for $13 billion. 

Introduction

E*TRADE appeals to new traders and sophisticated investors by providing an extensive range of trading features while remaining intuitive and easy to use. An already deep research menu has become even more robust, as analysis information from Morgan Stanley is now included across all E*TRADE versions.

Platform users have access to a broad range of tools that help with all types of trading, including stock, options, futures, and more. Passive investors will enjoy various pre-built portfolios and automated portfolio-building tools to assist with setting up their strategy. Notably, direct crypto exposure and international exchange trading are absent from the platform. 

E*TRADE’s educational content has also seen an upgrade, with developments that give even more firepower to already knowledgeable traders while also letting new users move quickly from research to investing. Investors can access E*TRADE through their preferred experience as the system is available on the website, desktop, and two mobile apps. The desktop and website platforms provide comprehensive trading options, while the two mobile apps cater to investors of different experience levels and trading styles.

Overall, E*TRADE provides a sleek, easy-to-use design paired with a wide range of trading features that appeal to all types of investors.

Pros & Cons

Pros Explained 

• An excellent range of trading tools, research material, and investment choices enables all types of investors to carry out their desired investment strategy. 
• Pre-built and automated portfolio builder options offer a streamlined investment solution for both passive investors and beginners. E*TRADE built automated investment management into its brokerage platform through its Core Portfolios robo-advisors.
• E*TRADE's educational content library covers a wide range of trading topics, investing best practices, and market commentary that's useful for all kinds of investors.
• Two mobile apps are available to users. The Power E*TRADE app integrates options tools which were strengthened by the acquisition of Options House in 2016. The E*TRADE mobile app is user-friendly and lets investors stay connected to their brokerage accounts and markets from anywhere.

Cons Explained 

• No international exchange trading, also known as foreign exchange trading (FOREX), is a limiting factor for some traders. Users that need this feature should look for alternatives. 
• Direct crypto investing is not available, so crypto investors will need to look for other platforms to make those kinds of trades.
• Fractional shares are available exclusively through a robo-advisor portfolio or dividend reinvestment plan (DRIP), which leaves suboptimal portfolio allocations for self-directed traders.

E*TRADE: Quick Look

• Two user-friendly platforms, E*TRADE and Power E*TRADE
• Customizable experience and consistent feature improvements
• Wide array of assets such as stocks, bonds, mutual funds, ETFs, futures, and commodities.
• More order types available on the website and desktop than on the mobile apps
• Advanced smart order routing system
• Competitive fees with free access to the E*TRADE platform

Usability

E*TRADE has an outstanding history of innovating and developing intuitive online trading platforms, further evidenced by winning our best broker for ease of trading experience category. E*TRADE offers a user-friendly and customizable online brokerage service across the website, desktop and two mobile app versions, combined with readily accessible features and tools. 

The broker has two web-based platforms, Power E*TRADE and E*TRADE web, each with corresponding mobile apps that mirror the functionality and features of the respective desktop options. Such convenience lets users seamlessly navigate between mirrored experiences.  Beginner and passive investors will get the most out of the E*TRADE web version, which has access to portfolio analysis, quotes, and educational content to help build portfolios. Basic screening tools let investors filter for assets like stocks, bonds, mutual funds, or ETFs that fit their investment philosophy. The E*TRADE mobile app is top-notch and mimics the web version features, with the added convenience of watchlist integration across both experiences. Either option lets traders monitor portfolios, make trades, and get real-time market quotes. 

Power E*TRADE is an advanced platform geared towards advanced and active traders. Users can access screening capabilities, technical analysis, and drawing tools, bolstered by E*TRADE’s acquisition of former industry rival OptionHouse in 2016. The mobile version of the Power E*TRADE platform also carries over all the robust features of the web experience.

Trade Experience

E*TRADE has made trade experience and feature enhancements a top priority, as traders from all experience levels can leverage the necessary tools that help carry out their preferred trading strategies. Orders can be entered and executed seamlessly by simply selecting the asset you’d like to trade, choosing an order type, and entering the amount. After reviewing the order to ensure the trade is queued correctly, you can easily monitor the execution status and position details.  The platform has customizable features that include the ability to curate watchlists. You can quickly trade securities on your watchlist by clicking the trade button that lines up with the security, letting you enter the market quickly and efficiently. 

Order tickets for options trading are similarly easy to use. Options traders can select from one of several options strategies from a drop-down menu before sending the order to market. The platform also gives investors tools to help choose a strategy based on their risk tolerance and market factors, a feature beneficial to new options traders. 

The Power E*TRADE platform has easy-to-use tools for stocks, options, and futures trading. Investors can quickly find what they’re looking for by taking advantage of a consolidated page that lists a trader’s favorite tools, which can be customized to their liking. Charting tools are automatically populated with technical analysis, market research, and education prompts that help investors understand the potential scope and impact of their trade. Power E*TRADE’s trade ticket is also detailed, more so than the standard web platform ticket, containing projections of maximum profit and loss associated with your order.

Market data may arrive in real-time, or it may arrive with a 15-minute delay. Traders can transact directly from charts and include the ability to choose tax lots for their order, either from the ticket itself or from their portfolio. Order types such as conditional orders, trailing stops, stop-limit orders, and more are available on the E*TRADE platform of your choosing. 

Mobile Trade Experience

E*TRADE continues to be one of the leaders in the industry when it comes to mobile trading innovation. App updates are frequently made, including recent improvements to site navigation, research functionality, and position details. Both the E*TRADE Mobile and Power E*TRADE Mobile apps are highly customizable and can be tailored to a user’s specific trading strategy.  The E*TRADE mobile app caters to new investors by focusing on the features that matter most to them—watchlists, market research, quotes, portfolio management, and more. Designed for more advanced traders, the Power E*TRADE app contains even more robust charting, analysis, and screening capabilities so you can create orders and monitor positions with ease. Options strategies can also be executed directly from the app using a customizable options chain.  Each respective mobile app provides the same feature parity as the corresponding web and desktop versions. This includes access to third-party investment research, streaming, and market news. Watchlists are also shared between each parallel platform, letting you shift quickly from desktop or web to mobile.  Neither app lets you trade directly from the chart. You also can’t draw directly on mobile, but you can carry over this functionality from other platforms. Nonetheless, an extensively customizable app settings section will just about cover any investor trading preferences you can come up with.

Range of Offerings

Investors can access a robust array of assets, including stocks, bonds, mutual funds, ETFs, futures, and commodities. These assets are all available on all E*TRADE platforms. FOREX trading and direct cryptocurrency exposure are not offered, which is a limiting factor (although you can access crypto indirectly). A complete list of E*TRADE’s offerings is included below to help you determine if your investment needs will be met: 

• Stocks long and short
• OTCBB 
• Mutual funds (Over 6,500 total, and E*TRADE recently eliminated all fees)
• Bonds (Corporate, Municipal, Treasury, CD, etc.) 
• Futures/commodities
• Futures options
• Single-leg and multi-leg options contracts
• Bitcoin futures
• Robo-advisor

Order Types

A wide array of order types are available across desktop, web, and mobile versions. E*TRADE lets investors enter contingent, bracketed, one-triggers-the-other (OTO), one-cancels-the-other (OCO), and one-triggers-a-one-cancels-the-other (OTOCO) orders. However, the mobile app only supports contingent and OTO orders. 

Support for more sophisticated order types (like OCO) is important, as they help traders navigate risk, quickly enter and exit positions, and capture gains. All these factors let traders spend more time analyzing the market without having to watch trades as closely.

E*TRADE also supports more standard order types, such as market orders, market on close, limit, stop limit, stop on quote, and trailing stop orders. Tax lots can be chosen when closing out a trade, either from the order ticket or from the portfolio. This functionality helps positions to be optimized for tax efficiency.

Trading Technology

Determining how and where orders are sent depends on trade execution quality. Orders can go directly to a broker or an exchange, which are then forwarded to another exchange for ultimate execution. As a result, the way a broker decides to route an order will impact the price at which the order is filled. E*TRADE works with many market centers for quality control and to help ensure the best quality and speed for trade executions.

E*TRADE leverages an advanced smart order routing system designed to complete investor trades while limiting the market impact. E*TRADE’s execution quality performance covers market order sizes ranging from 100 to 9,999 shares. The average time between sending an order to execute and when a fill report is sent back to E*TRADE is approximately 0.08 seconds for S&P 500 and 0.11 for non-S&P 500 performance.

E*TRADE gives traders a few options to backtest their investment strategies. A paper-based demo account is available so you can explore how trading strategies would have performed in historical market environments. The Options Income Backtester tool allows users to explore historical returns for income-focused options strategies. Power E*TRADE users can use the Live Action Scanner to look for potential investment opportunities in real-time. Automated portfolio-building tools are available through E*TRADE, but ongoing portfolio management falls to the user.

Costs 

Like many online brokers, E*TRADE’s fees have become more competitive since the race to zero fees ensued. E*TRADE costs are as follows:

• E*TRADE charges $0 commissions on online stock, ETFs, and options trades. There is no limit on the number of shares that can be traded at this base commission rate.
• Options contracts are priced at $0.65 per contract if less than 30 trades per quarter and $0.50 per contract if more than 30 trades per quarter.
• It costs $6.95 to trade OTC stocks, including OTC, OTCBB, grey market, and OTC-traded foreign securities. The cost is reduced to $4.95 if the investor executes at least 30 stock, ETF, and options trades per quarter. 
• E*TRADE has eliminated its mutual fund commissions.
• Margin interest rates vary from 14.20% for a balance less than $10,000 to 12.20% on balances of $250,000 or more as of July 27, 2023.
• Bond transaction fees are $1 per bond with a minimum of $10 and a maximum of $250. 
• Futures transactions cost $1.50 per contract, per side plus fees, and $2.50 per cryptocurrency futures contract, per side plus fees.
• There is no fee to close an account (besides an ACAT fee), no maintenance fee or charge for inactivity, and no minimum balance or number of trades to avoid inactivity. 
• When transferring accounts out of E*TRADE, there is a $25 fee for partial transfers and a $75 fee for full transfers. 
• A live broker is available at $25. This fee is waived for extended hours and overnight session trades places between 4 a.m. and 7 a.m. Eastern.
• There is no domestic wire fee for incoming wire transfers, but there is a $25 fee for outgoing wire transfers.
• E*TRADE charges $10 to send checks. 
• Access to the E*TRADE platforms is free of charge.

How E*TRADE Makes Money From You and for You

Since the brokerage industry made an aggressive pivot to lower fees, the methods by which they make money for and from investors aren’t always easy to understand. Fees and commissions still account for some of the revenue, but other sources exist as well.

• Payment for order flow: It is common for brokers to generate revenue by directing trade orders to different execution venues. E*TRADE receives payment for order flow (PFOF). This means that it is paid by various market makers to direct orders to them. We found E*TRADE's PFOF to be modest at $0.0014 per share for equities and $0.39 for options. However, there are competing brokers who do not accept payment for order flow on equities. 
• Stock loan programs: These programs generate revenue for brokers who are providing loaned shares to traders and hedge funds shorting the stock. Investors can offer shares held long to E*TRADE’s stock loan program, but they won’t be able to choose which stocks to loan. Nonetheless, E*TRADE will share the revenue generated from these activities with them.
• Margin Interest: E*TRADE offers margin trading to investors. Of course, interest is charged on the borrowed funds and is a source of income for E*TRADE. Interest rates start at 14.20% for balances under $10,000. They go down to 12.20% for balances of $250,000 and up, as of July 27, 2023.

Account and Research Amenities

E*TRADE offers a strong variety of tools, screening functionality, and research capabilities that allow traders to pursue a wide range of investment strategies. Stock, mutual fund, ETF, and options screeners have many different filtering settings. Research, charting, and educational tools are continually improved, and new tools like the Earnings Move Analyzer are making the already tight competition between E*TRADE and some of its closest competitors grow even tighter. 

Stock Screener

E*TRADE’s Stock Screener is customizable across multiple criteria, including price/volume, market segment, technicals, fundamental metrics, analyst opinions, and earnings/dividends. Morningstar ratings are included in the stock screener, offering even more ways to evaluate potential trading approaches.  The Live Action scanner is included as part of the Power E*TRADE app, containing more than 100 pre-defined screens. Active investors can use this feature to scan the market in real-time to assist their trading strategy, helping to uncover oversold or overbought stocks, for example.

ETF and Mutual Fund Screener

E*TRADE’s ETF and Mutual Fund screener includes 22 predefined strategies geared toward helping beginner traders get up and running. The ETF scanning capabilities can be used to filter for a variety of different categories, such as expense ratio, risk, performance, and more. The mutual fund screener is similar and can be used to implement predefined or customized strategies.

Options Screener

The Power E*TRADE platform offers a range of standard to advanced options screeners and tools. The Live Action tool can be utilized to identify unusual options and volatility activity in the market. Spectral Analysis helps visualize the potential trade, helping recognize the max profit or loss in an options strategy. Traders have plenty of options at their disposal to research and implement their preferred options approach. 

Fixed Income Screener

E*TRADE offers several fixed-income screening capabilities that let you filter by fixed income type, yield, price, credit rating, and more. The screener is paired with educational and research tools that let investors quickly zero in on fixed-income options that align with their desired investment strategy. The Bond Ladder Builder tool is especially helpful in designing and building a strategy that can help manage interest rate risk across all environments.

Tools and Calculators

E*TRADE offers useful calculators and tools, such as retirement planning, through its web platform. More advanced planning capabilities, such as a Roth IRA conversion and taxable equivalent yield calculator, help simplify complex tax and planning strategies. 

Power E*TRADE contains many options-related tools, such as risk/reward probability charts and the StrategySEEK Tool, designed to help identify user-inputted criteria like target price, outlook, timeframe, and investment amount.

Charting

Every E*TRADE platform includes advanced charting features powered by Markit Digital and Chart IQ. Many types of charts are supported, including line, bar, candle, open-high-low-close (OHLC), and more. Power E*TRADE has a vast repository of charting capabilities, containing more than 100 chart studies, over 30 drawing tools, and several indicators. Investors can save and initiate trading strategies directly from the chart, providing a powerful way to implement their desired trading approach. 

Trading Idea Generators

E*TRADE uses Argus to deliver daily reports that power investors with trading ideas that can be implemented by users regardless of their experience level. Argus also shares intraday trading ideas, market news, and monthly portfolio selector reports. The Live Action tool contains technical pattern recognition, with functionality that automatically draws support and resistance bands so traders can quickly identify and make trades armed with this analysis.

News

The Power E*TRADE experience provides real-time streaming news to go alongside news articles, market commentary, videos, and research reports. Daily stock and bond market reports are offered too. Monthly market commentaries, daily active trader analysis, and weekly investing articles are available as well.

Third-Party Research

E*TRADE users won’t have a lack of research tools at their disposal, as the platform offers ratings from Moody’s, Thomson Reuters, Morningstar, MarketEdge, Research Team, TipRanks, Argus, and Trefis without an additional fee. E*TRADE also added Likefolio consumer insights and Trend Watch as part of the Power E*TRADE toolbox, enhancing an already deep lineup of research options.

Cash Management

Investors can only earn 0.01% - 0.15% interest on cash balances, with cash automatically swept into money market funds if clients are utilizing a managed account.

Dividend Reinvestment Plan (DRIP)

E*TRADE has a dividend reinvestment program (DRIP) through which investors can purchase fractional shares. This program provides one of two ways investors can access fractional shares, the other being through the Core Portfolios robo-advisor platform.

SRI/ESG Research Amenities

Traders can screen for an array of environmental, social, and governance (ESG) criteria and socially responsible investing (SRI) factors through E*TRADE. The platform also provides thematic screening functionality to look for companies that engage in clean technology or social issues, for example. This gives investors the power and flexibility to design portfolios and trading strategies that are unique to their interests. 

Portfolio Analysis

All types of traders will find that E*TRADE’s portfolio analysis tools are useful. Whether you're a new or experienced trader, use an active or passive philosophy, or prefer options chains or ETFs, E*TRADE has tools that help power your strategy in the market. Reports and analyses are provided in real-time and tailored to your specific interests. E*TRADE eliminates the distorting performance effects of money flowing into and out of portfolios by using a time-weighted measure of gains and losses. As a result, the impact of cash flows is eliminated. While this is helpful, the platform does not support internal rate of return calculations. E*Trade offers tax documents like any other broker. Reports may be compatible with many common tax software options. Downloadable capital gains tax returns, calculations on the impact of future trades, or viewing unrealized gain/loss reports further round out the tools available for investor use.

Education

E*TRADE has been hard at work upgrading and enhancing the strong educational content on the platform. One of the main focuses has been the “Your Life and Your Money” part of the site. This area contains an expansive learning library, financial calculators, and guidance material that is applicable for investors of all experience levels.

The acquisition by Morgan Stanley enables more educational integrations and features available for use, such as the Morgan Stanley podcast “Thoughts on the Market.” The material typically covers asset classes and other market topics.

A demo account option lets traders test out investment strategies and experience the platform without committing real dollars to the market. This tool helps beginner investors ease into the market and allows advanced traders to fine-tune their strategy before implementing it in the real world.

E*TRADE’s Knowledge Center lives up to its name by offering tremendous resources, spanning a huge range of topics and available in a number of formats. This content library includes long-form articles, videos, classes, guidance pieces, and expert market commentary. Also available are tax planning information, portfolio-building insight, and a more advanced curriculum for sophisticated traders looking to level up their approach to options or futures. By empowering you with a full complement of educational tools and resources, investors of every level and interest have a full arsenal of material at their disposal. E*TRADE’s clear focus on enhancing this area of the site is a huge win for all traders.

Customer Service

• E*TRADE offers a 24/7 phone line with access to brokers, as well as retirement specialists, financial consultants, active trader consultants, and product specialists. 
• E*TRADE customers can chat with a live customer service representative 24/7, send an email, access FAQs, or use a comprehensive language search engine to find information on the website. The chat is available through the website as well as mobile apps.

Security and Reliability

E*TRADE's security is up to industry standards:

• Two-factor authentication is available on all E*TRADE platforms.
• If using a mobile device, E*TRADE offers both fingerprint and face scan log-in functionality.
• E*TRADE clients will be covered under the Morgan Stanley excess of Securities Investor Protection Corporation (SIPC) supplemental insurance policy, which has an aggregate limit of $1 billion. This amount is above and beyond what is offered by SIPC.
• E*TRADE limited trading of meme stocks GME and AMC on Jan. 28th, 2021, resuming normal trade operations the next day.

Transparency

E*TRADE’s pricing structure and fees are clear and transparent. For example, the broker has a webpage dedicated to rates and pricing, highlighting costs associated with brokerage fees, margin trading and more.

Available Account Types

E*TRADE has an extensive offering when it comes to account types. E*TRADE customers can open all the frequently used accounts including:

• Individual brokerage accounts
• Custodial accounts
• Coverdell education savings account (ESA)
• Traditional individual retirement accounts (IRAs)
• Roth IRAs
• Rollover IRAs
• Beneficiary IRAs
• IRAs for Minors
• SIMPLE IRAs
• Simplified Employee Pension IRAs

Choosing the right account depends on the purpose of the portfolio. Retirement savers should choose from among the several available types of IRA accounts. Investors looking to grow their savings and who would like access to funds at any time before retiring would be well served with a brokerage or joint account. E*TRADE also offers a Max-Rate Checking account and a high-yield savings account.

Final Verdict 

E*TRADE has an outstanding platform overall, catering to investors of all backgrounds and trading philosophies while consistently innovating to improve service. Users can choose from enhanced desktop and mobile offerings with full feature parity that can be customized to match their preferences and trading strategy. A clear, renewed focus on educational content highlights E*TRADE’s commitment to empowering investors with knowledge to expand their trading expertise and capabilities. E*TRADE successfully strikes the delicate balance between providing an intuitive experience and sleek design with a full suite of tools, trading features, and investment choices needed to be a premier broker. Users, from options traders with sophisticated options chains to passive investors using ETFs, will feel equally at home at E*TRADE. Some investors will need to find workaround solutions if interested in direct crypto exposure or international exchange trading. In the end, though, E*TRADE shines as a phenomenal, innovative investment platform that all investors can leverage to their benefit.