E*trade – Our Verdict
E*trade is known for its excellent resources and usability. Like other large online brokers, E*trade has something to offer for all levels of investors.
E*trade is great for options analysis and trading and for mobile app users who want analytical power. Less active clients who prefer a more passive approach to investing might be better off picking other trading platforms.
* E*trade trading platform achieved above ratings in Best Day Trading Platform Review, where we compared several trading platforms and brokerages
History of E*trade
E*Trade is an electronic trading platform founded by William Porter and Bernard Newcomb in 1982. In 2018, the company had 4.9 million brokerage accounts, and a margin receivables balance of $9.56 billion. E*Trade acquired OptionsHouse in 2016.
E*Trade is headquartered in Arlington, Virginia, but has offices dotted around the United States.
Whilst the company has seen great success during its long trading history, it began it fall behind when competitors began offering zero commission stock trading. As this was becoming the norm, E*Trade decided to follow suit in 2019, and has since caught a second wind.
Who uses E*trade? Predominantly Mobile traders and Options traders
Affiliations and Secondary Platforms
Morgan Stanley announcing in February 2020 that they would acquire E*Trade, many new partners and affiliations will likely begin working with E*Trade.
1. E*trade Review Summary
E*trade, is an online broker offering three computer-based platforms and two full-featured mobile apps that will appeal to a range of investing styles and interests. For those who want to invest quickly, E*trade’s Prebuilt Portfolios offer a fast track to the markets. You can choose from three different risk levels (conservative, moderate, aggressive) made up of ETFs ($2,500 minimum) or mutual funds ($500 minimum). There are no fees beyond the fund management costs.
The Power E*trade platforms, both desktop and mobile, bring clients robust options analysis and strategy development tools. That said, E*trade has continued to rank highly among the best online brokerages for beginners, thanks to its excellent resources and usability.
It is worth noting that E*trade does not enable cryptocurrency trading, but you can trade CME Bitcoin futures. If you are interested in trading cryptos, though, we would recommend you to look for other trading platform. There is no international trading (outside of those available in ETFs and mutual funds) or currency trading. Other assets that can be traded online include U.S. Agency Bonds, initial public offerings, new issue program notes, secondary or follow-on offerings, and new issue preferred stocks.
Best Mobile Trading Platform
Best for Research and News feed
E*trade has achieved the above titles in Best Day Trading Platform Review, where we’ve compared Interactive Brokers, TradeStation, eSignal, AmiBroker, NinjaTrader, Trading Technologies and Tastyworks. Quant Savvy has compiled a comprehensive list of features, user reviews, rankings, and screenshots. We also provide sources for our information and useful links to help you conduct additional research.
Similar Broker Reviews
Which broker has the highest fees? Who offers the highest quality data? Which platform is the best for day traders and beginners?
We provide a breakdown for software comparison between NinjaTrader, TradeStation and MultiCharts which is intended to help you make the right choice.
2. E*trade Platform Tools
Scanners, Screeners, Watch Lists, Software tools, Alerts
Power E*Trade provides a wider variety of features compared to standard, which includes price alerts and charting tools. Much of the scanners (i.e. Recognia scanner) allows users to set alerts when technical criteria is met.
Watchlists, as you would expect, are integrated into every E*Trade platform.
Flexible screeners for ETFs, stocks, mutual funds and fixed income are available. On standard E*Trade, the stock screener is customizable, with around 45 different criteria. On Power E*Trade, there is a LiveAction scanner with over 100 screens. These are real-time scans on the market with live metrics (volatility, Greeks, fundamentals and so on).
During Easter 2020, E*Trade added thematic investing screeners. Included in the 17 additions was Up and Comers, Playing Defense and Hedging With Gold.
The ETF screener has 16 strategies to get users started, and the Options screener on Power E*Trade’s LIve Action tool is very powerful, being able to scan unusual options activity.
Placing Live Trades and Trading Technology
Placing an order is very straightforward with E*Trade, and includes a Trade Ticket, which can be saved for later.
The options order ticket also allows users to simulate placing options orders which can then see how it affects their accounts prior to the real execution of the trade.
Research and News Feeds
E*Trade is impressive with its research and news capabilities. Trading ideas are provided via 3rd party providers, such as MorningStar, MarketEdge and Thomas Reuters.
There’s a good amount of fundamental data available, something which many trading platforms fail to provide—financial statements provided from the past five years, along with performance and rating metrics.
The news feed is also impressive, being provided by various 3rd parties. There’s not only easily readable information but visualised data too. Bloomberg TV is streamable from both desktop and mobile platforms.
Portfolio, Risk Management and Software Tools
Portfolio and fee reports are extremely clear with E*Trade. They can be customized to up to 100 columns, such as dividend, Net Asset Value, etc.
Power E*Trade can be used to view your asset allocation and overall portfolio risk. If you have multiple accounts, they can be viewed as a grouped portfolio. The website platform provides an Estimate Income amount for future cash flow, including bond interest, dividends, etc. The biggest flaw here is that you can’t consolidate external assets held with other institutions/platforms.
Core Portfolios
For an annual fee of 0.30%, E*Trade’s robo-advisor service will diversify and manage your portfolio. There’s a minimum investment of $500 for this service.
3. Charting, Indicators and Tools
E*Trade is fantastic for beginner traders because of the tools available, along with UX/UI. In particular, options trading is made extremely accessible. For example, when using the Snapshot Analysis tool, the key events to keep an eye on are listed along the P&L chart, and the risk/reward is denoted in smiley faces – it doesn’t get much more user friendly.
Futures trading is also great with E*Trade, particularly with the use of the Quick Trade widget, which triggers orders with ease, as well as having many futures ladders than can be run at once.
Charting:
Chart IQ powers the Power E*Trade platform, which is a 3rd party HTML 5 chart provider. Panning and zoom is liquid smooth, and there are 119 technical indicators, with 32 drawing tools. Recognia technical analysis is also integrated.
4. Automated Trading and Backtesting
Backtesting
The Options Income Backtester is a backtesting tool that allows users to view historical returns for your income-focused Options trades. Power E*Trade users will benefit the most from backtesting, as the web standard platform is limited.
Live Automated Trading
With the Core Portfolios (account type), diversified portfolios are selected by the Personalized Investment Strategy team – a feature that helps rebalance portfolios along the way as it sees necessary. This is an automated investing
Trade Management and Historical Trades
Trade Management: E*trade offers high quality and speed of trading execution which is 0.12 seconds (S&P 500 performance) and 0.31 seconds (Non-S&P 500 performance). Effective/quoted spread is reposted to be 53.71% for S&P 500 performance and 60.84% for Non-S&P 500 performance.
Data Stability and Speed
E*Trade claims it balances speed with quality and with seeking the most optimal execution available.
In July 2020, 96.01% of S&P 500 trades were at or better than the National Best Bid or Offer, with an 86.47% price improvement percentage. The execution speed was around 0.17 seconds.
Portfolio Testing and Trading
E*Trade has the ability to paper trade, meaning investors can practice their strategy without risking real money. The feature replicates the platform well and is one of the most used simulated trading platforms in the world.
Backtesting is available, as mentioned elsewhere in this review, and the portfolio analysis feature is a visual way to represent your current holdings and their cumulative risk/performance.
5. Programming language
Programming Language: Python, Java and Node.js can be used when developing your own trading application, which can make use of the reliable E*Trade API.
Learning Curve: The web, mobile and desktop platforms all have a shallow learning curve. With the benefit of an intuitive user interface, it’s an easier learning platform. There’s only an education environment and a tonne of support pages but also a Youtube channel.
Example applications are provided on the developer side of the E*Trade website. These come with ReadMe files and .py files with some basics to help get started. The website also has some “Getting Started” and Support pages. Past this, users are on their own to develop a trading strategy.
Videos: E*Trade has an official Youtube channel which uploads, to this day, several times per month. For example, a recent upload explained the new Options Trade Ticket Redesign, which helps keep users up-to-date with changes and how they operate.
Compatibility and Design:
Like with most platforms, E*Trade uses multiple programming languages to help optimize each facet of the business. For example, the customer-facing tools are mostly using c/c++ and Java, while Python and Perl are used for the backend.
Compatibility
E*Trade is impressively compatible with users. Being available on mobile, desktop and web browsers, there really are no users left out here. The web browser platform is still highly functional and powerful, and the mobile platform mirrors this very closely – there’s not much functionality being left out of the mobile version.
Design
The E*Trade dashboard is well-spaced out, and manages to host a lot of widgets and data without seeming overcrowded. Even when using a tablet, which is touch-orientated, the design holds up to be functional and intuitive. There’s a light and dark theme for charting, and the indicators are easy to apply. Furthermore, the visualisation of the portfolio analysis is extremely impressive and can make the data easily digestible for beginners.
Speed and Performance Considerations: The platform itself guarantees speed in how you navigate investments, view charts and manage trades. As for the order routing technology, it uses both sequencing and spray routing, with the majority of trades sent to market makers.
Resilience and Limitations: One limitation is that, apart from zero commission online equity and ETFs, E*Trade is quite expensive. OTCBB trades have a $6.95 commission per trade for some customers and expensive wire transfer.The other downfall of E*Trade is the lack of products and markets accessible. There’s no Forex, CFD or cryptocurrency, and the equity markets are limited to the US only. Whilst they have a good bond selection, the funds, options and futures markets are smaller than most competitors.
6. Mobile App
Apple Store Rating: 4.4 Android Rating: 3.6
Functionality: Functionality is fairly impressive on the mobile platform, being both intuitive and powerful. News is accessible, with Bloomberg TV being streamable and a daily webinar. Security is strong, with face or fingerprint recognition being available. Customer service can be accessed on the app via chat.
Charting: The analytical power of a mobile app is impressive at E*Trade. On the mobile app, the E*Trader screener has 15 criteria. Charting is easy to use on mobile, with the user interface being intuitive and slick. The app mirrors the web platform fairly accurately, so there’s little left to be desired.
7. Market Access for Live Trading
Stocks
US stocks only
Futures
Available for brokerage and IRA accounts, 24/6 access to the market.
Available Futures are listed on ICE US, CME, and CFE – this is limiting compared to competitors.
Traders worldwide use futures to easily reduce risk or seek profits in changing markets. To maximize your profits, trust algorithmic trading systems that can trade multiple market strategies simultaneously without making any errors.
Options
Options trading is where E*Trade shines in terms of functionality. There are single-leg and multi-leg options, although you can only trade on CBOE exchange – which is limiting.
Hedge Funds
You can find some of the largest fund providers, such as Vanguard.
Mutual Funds
Fund selection is decent, with 530 on offer.
Bonds
88,000 bonds are accessible, covering both government and corporate bonds.
ETFs
US-only
Account types:
- Individual
- Joint accounts
- Businesses accounts
- Retirement accounts (IRAs)
- Pension accounts
- Education Savings Account
- Custodial account
E*Trade personalized investments
ETFs
US-only
8. Market Data and Software Costs
9. Customer Support and Learning Resources
Online, Telephone, Email and Account Services Support
E*trader customer service is very poor: E*Trade offers phone support, Live Chat, and email. The majority of reviews on Trustpilot suggest that their customer service is very poor, they often don’t answer the phone, and you have to wait ages before you manage to reach them. However, live chat appears to be faster in offering support.
Forum and Community Support
Webinars with Q&A sessions, though infrequent. Previous webinars are stored and watchable.
There is no official community forum.
Opening an Account
For US residents: The process of opening an account with E*Trade is fully digital and friendly for beginners, with no minimum deposit or deposit fee. Whilst it’s user-friendly, and the online application is fast, the funding process can take several days.
For non-US residents: Non-US used to be able to open an account. Some say they’ve stopped it entirely, while others say it simply requires more documentation.
Deposits, Withdrawals Process
Deposits can be in the form of electronic money transfer (up to 3 business days), wire transfer (same-day), or cheque (up to 5 business days).
Deposits and withdrawals are free. However, a wire transfer costs $25, and checks cost $10.
10. Security
Monitoring, Encryption
Monitoring: E*Trade has not yet had any data breaches to date, which suggests their encryption and cyber security are at a good standard. E*Trade is regulated by SEC and FINRA, two top-tier regulators.
Two-factor authentification: Mobile users can use biometric recognition, such as face or fingerprint, along with a normal password.
Safety of Funds
There’s a Complete Protection Guarantee which covers fraudulent use of a user’s account, as well as providing extra security software on demand.
SIPC protection, which is in the event of the broker going bust, isn’t necessarily for clients based in other countries. It covers up to $500,000, with a cash limit of $250,000.
