Online stock trading was revolutionized by E*Trade, a pioneer that has stood the test of time thanks to its appealing trading tools and excellent customer support.
Despite losing market share to competitors as commission-free brokerages entered the market over a decade ago, the company eliminated trading commissions in 2019, allowing investors to make use of its superior platform and features in conjunction with its cost-effective business model.
Since its inception in 1999, E*Trade has grown to become one of the largest online brokerages in the world.
Key Characteristics
When you work with E*Trade, you can rest assured that your money is being handled by one of Wall Street’s most reputable institutions because Morgan Stanley acquired the industry pioneer in 2020.
Not only do you get to work with a market leader, but you also benefit from the following features that customers love so much about this firm:
Trading Platforms that Make Sense
E*Trade has always focused on serious investors and wealthy people. Its two web platforms, each tailored to a different type of clientele, demonstrate the substantial effort and money the company has spent developing its trading technology.
The benefits of having an E*Trade account are as follows:
The Web Platform of E*Trade
When it comes to online stock trading and investing, the E*Trade platform was one of the first and is still among the best today. Investors interested in basic analysis and wanting access to analyst research may find this platform particularly useful.
The most important aspects of this platform that you’ll have access to are:
- The Bare Facts. This site is a one-stop shop for up-to-date information, including news, quotes, and studies from unbiased analysts.
- Abilities in Technology. The technical analysis tools a stock trader needs include simple-to-use charting with built-in sketching tools and stock screeners.
- Funding Options for Retirement. The portal also provides learning materials on saving for retirement, so you can avoid having to toil away in your senior years.
- Use of Bloomberg Television. You can save hundreds of dollars a year by using E*Trade because they provide access to Bloomberg TV for free when trading.
E*Trade Power
Power E*Trade caters to technically-minded investors. Though it’s a great place to trade equities and futures, options traders will find the most success on this platform.
Power E*Trade offers a number of useful functions, such as:
- Equipment for Making Graphs. On the charts, the system will routinely add instructional content and technical indications. The program also features sophisticated intraday and historical charting with over one hundred studies, thirty drawing tools, and every conceivable chart type a trader could want.
- Simply Put. Probability. The tool also displays the most likely outcomes of options trading to investors and traders before the deals are completed. When using this function, you can know exactly what to expect before making a trade.
- Taking the Risks. The platform also includes risk analysis tools specifically designed to help options traders assess the level of risk they are willing to take before entering a trade.
Prebuilt Portfolios
While E*Trade’s primary target audience for its trading platforms has always been active traders, the advent of Robo-advisors has presented a new revenue stream that the company is not about to ignore.
This is why E*Trade created Core Portfolios, an alternative to the services offered by competing Robo-advisors.
An E*Trade brokerage account and $500 are all that is required to gain access to one of these prebuilt portfolios. In case you do, establishing your portfolio will be a breeze.
The company’s team of Wall Street experts carefully selects investments for these portfolios depending on your stated objectives and comfort level with risk. Once your investments have been selected, the firm will employ cutting-edge technology to track and routinely rebalance them so you can essentially set them and forget them.
The annual fees that E*Trade charges for these portfolios are also rather low, coming in at 0.30%. The annual charge drops to $30 if your investment account balance is $10,000.
The Best Options Platform
The options trading market soon established E*Trade as a frontrunner. However, in 2016, it announced a $725 million agreement to acquire its top competitor, OptionsHouse, significantly expanding its leadership position.
The purchase gave the firm control of 154,000 trading accounts and over $3 billion in assets. One of the most powerful platforms available to options traders is Power E*Trade, which got a huge boost when features from OptionsHouse were integrated into it.
A Wide Variety of Tradeable Assets
Trading stocks, mutual funds, ETFs, bonds, and even derivative instruments like options and futures are all within your reach when you use the brokerage services provided by E*Trade.
Two Effective Mobile Apps
Mobile support is essential for any modern platform, but having an app alone isn’t enough to win over users.
E*Trade goes further than this, though. Two mobile investment apps have been developed by the firm, each of which is an exact replica of the firm’s desktop apps and features increased efficiency for rapid trading.
When it comes to ease of use, the E*Trade Mobile App and the Power E*Trade App, both of which are compatible with Android and iOS, are on par with the company’s desktop platforms.
Due to the app’s user-friendly design and access to advanced trading capabilities, even the most complex deals may be executed with ease.
Market Simulator
There is a high degree of danger in investing, and the learning curve is steep. Therefore, before actually investing your hard-earned cash, it is prudent to try out your trading tactics in a simulated setting.
Your capacity to do so is enabled by E*Trade’s web-based trading platform. This trading simulator will allow you to practice trading without risking real money in a setting that is identical to the company’s live trading platforms.
Even seasoned traders might benefit from a trading simulator when it comes to putting new ideas through their paces.
Individualized Screeners
You can have a great trading strategy but it won’t help you if you can’t identify chances that fit within it. If you had to analyze each stock individually to locate the possibilities that meet your strategy, you might go years without making a trade.
The good news is that you can make use of some of the most advanced screening technologies available by signing up with E*Trade. You may quickly and easily identify the kinds of chances you’re looking for with the use of the company’s screeners, which are intuitive and extremely adaptable.
Low Fees
When you trade with E*Trade, you get to take advantage of some of the most competitive fees in the business. E*Trade now offers $0 commissions on options, ETFs, and domestic stock trading, joining the ranks of other commission-free brokers.
Trading more than 30 contracts of options in a quarter will reduce your per-contract charge from $0.65 to $0.50. Each futures contract costs $1.50, while purchasing a bond costs $1, with a $10 minimum and a $250 maximum.
The lack of a required minimum deposit or trading account balance is another perk for investors. The margin expenses for those who trade on margin are also rather modest, ranging from 5.45% to 8.95% depending on the debit balance.
Investing in retirement
While E*Trade has made a name for itself by serving the needs of active traders, the company has also established itself as a leader in the retirement investing sector by providing customers with the resources they need to create and manage retirement accounts that will ensure financial security in their later years.
The company provides a number of retirement account choices, including the more common tax-advantaged varieties such as standard IRAs, Roth IRAs, and rollover IRAs.
The firm also offers a retirement plan for minors who are working and earning money called an Individual Retirement Account (IRA) for Minors, which is overseen by an adult custodian.
Pros
An E*Trade account is appealing for a number of reasons. The low-cost broker gives you access to research and analytical tools, as well as several user-friendly trading platforms, that you won’t find with its competitors.
There are many benefits to investing, but some of the most significant are:
- Superior Trading Resources. All E*Trade platforms provide you with the same comprehensive set of resources for maximizing your trading success. Using the company’s services will equip you with all the information you need to make sound investing decisions, from technical indicators that populate themselves automatically to in-depth analyses of the market.
- Possibility to Use Option Trading Tools Distinct from Anything Else on the Market. When E*Trade bought OptionHouse, it gained access to tools that no other options trading platform had. For instance, the platform will allow you to scan for trades that fit specified criteria, such as target price and expiration date, and to swiftly evaluate the potential risk/reward profile of prospective trades.
- Costs that are much more reasonable. It’s crucial to minimize costs whenever feasible while investing. Zero commissions on trades, the lowest fees in the business for options and futures contracts, and low margin rates are just some of the perks of trading with E*Trade.
- Bank Savings Account with No Fees. Your account balance can earn 0.05% interest yearly when saved in a free savings account. In view of the fact that the national average interest rate on savings accounts is currently only 0.06% as of the date, this was written, the interest earned will be significantly below par. The savings account, however, is a handy place to keep all of your cash in one place.
- Sufficient Help for Customers. It’s crucial to use a financial service provider with a solid reputation for satisfying its clients whenever possible. After all, you need someone who is prepared and well-versed in financial matters to answer your inquiries whenever they arise. The services offered by E*Trade are ideal in this respect.
- Bloomberg TV is completely free. Michael Bloomberg, a successful American businessman, philanthropist, and former mayor of New York City, is responsible for establishing Bloomberg TV as a premier financial news network. The E*Trade platform includes access to Bloomberg TV, where users can watch coverage of breaking news and analysis from third parties.
Cons
Although there are many positives to having an E*Trade account, there are also some negatives to think about before opening an account.
Important disadvantages include:
- Inability to Use Virtual Currencies. Many financial experts see Bitcoin and similar cryptocurrencies as the wave of the future for global currency exchange. Even if that never occurs, the widespread interest in these easily traded assets has driven their prices to unprecedented heights. There is currently no way to trade cryptocurrencies on E*Trade.
- There is no access to our Net Worth. Many of the firm’s rivals provide users with the option to link external investment, savings, checking, and debt accounts to display a more comprehensive picture of their financial standing. Inasmuch as this feature is concerned, an E*Trade account does not support it.
- There will be no foreign exchange. Neither of the company’s platforms facilitates currency trading, so if that’s something you’re interested in doing, you’ll need to go elsewhere.
- Intended Audience. High-Net-Worth Investors and Active Traders As a result of their advanced trading tools and in-depth market analysis, E*Trade platforms are a great fit for both professional traders and those with a high net worth. Small buy-and-hold investors will find the platform unsuitable. Despite the fact that the company is beginning to provide appealing services for this community, its intricacy may discourage novice investors with lesser accounts.
Bottom Line
Since its inception as an early pioneer in the online brokerage industry, E*Trade has been at the forefront of the industry in the United States.
The company’s efforts to simplify the options trading process and provide the most user-friendly tools for active traders have paid off with a platform that is both widely used and widely regarded as among the best in the world.
Newcomers may be intimidated by the company’s platforms at first, but with some time spent learning how to use the resources provided, they will have everything they need to succeed.
