Published by Blain Reinkensmeyer
On Friday, July 15th, 2016
TradeStation is a broker designed specifically for the tech-hungry, seasoned trader who trades actively, can meet the monthly minimums, and is serious about his or her craft.
Highly advanced trade platform supports third-party development via EasyLanguage; offers industry- leading historical data sets for deep analysis.
$99.95 monthly fee charged if certain minimums are not met; broker began accepting payment for order flow again in 2015 after shunning the practice in previous years.
February 16th, 2016: This Review has been updated to reflect the latest research and results from the 2016 Review.
Since becoming a brokerage in 1982, TradeStation has prided itself on being a leader in trader technology, with one of the most robust platforms available to traders anywhere. With more than 30 years of experience under its belt, TradeStation continues that effort in 2016.
Commissions & Fees
While TradeStation does offer support for all trading types, including forex and futures, this review focuses on TradeStation's equities and options offering. There are three different commission structures to select from for equities and two for options.
TradeStation, like Interactive Brokers, Lightspeed, and others, requires clients to purchase real-time data feeds to enable trading. To receive primary equities data, i.e., S&P 500 indices, NASDAQ, NYSE, and AMEX, the price is $7 per month ($4 + $1 + $1 + $1). Level II quotes run at $11 per month, and so on.
The main fee all new clients should be aware of is the $99.95 monthly charge for the TradeStation software, which can be waived only if certain activity levels are hit (or the account has $100,000). For equities traders, at least 5,000 shares per month must be traded, and for options traders, 50 contracts are necessary to avoid the fee.
A full breakdown of TradeStation's commissions and fees structure can be seen via the Commissions & Fee tab above, which includes a breakdown of TradeStation’s new unbundled tiered rates. On the whole, the more frequently you trade, the lower your costs. This is especially true for TradeStation’s optional unbundled pricing structure, which sophisticated traders can use to hand pick their routes and receive market rebates for adding liquidity.
Overall, TradeStation has a very competitive commissions schedule when pitted against large, full-service brokers (TD Ameritrade, ETRADE, Charles Schwab, Fidelity), but is more expensive than some of its active trading competitors such as Lightspeed and Interactive Brokers.
Platforms & Tools
TradeStation's desktop platform is its flagship product and core focus. Web trading was introduced in early 2013; however, its primary use is for placing trades together with managing orders and positions when the desktop application is not within reach.
Multi-monitor traders will appreciate TradeStation’s flexibility in supporting multiple monitors, allowing each monitor to have its own desktop workstation open.
TradeStation’s tools cater to every type of professional investor, including institutions such as hedge funds. More than 40 years of historical data are available for equities trading when it comes to charting and studies. In terms of functionality, backtesting through Portfolio Maestro and customized scanning of the market for opportunities are just the tip of the iceberg.
Charting allows investors to go deep into analysis, customizing indicators with numerous options, something only competitors such as TD Ameritrade's thinkorswim platform can match. More than 150 indicators/studies are available for inclusion, and each one can be reworked or adjusted to the trader's exact specification.
Options traders are not forgotten either, thanks to OptionStation Pro, a built-in tool within the platform. Scanning in the process of analyzing potential trades is a breeze, and traders can view traditional 2D as well as 3D profit & loss (P&L) charts, something exclusive to TradeStation (while the 3D views were a nice plus, ultimately, they felt more like eye candy). TradeStation’s options capabilities also include custom grouping for current positions, streaming real-time greeks, and advanced position analysis.
Throughout 2015, a variety of updates, some subtle and some more discrete, were rolled out. A new expirations column was added to the positions window, allowing users to sort their positions by expiration. Within options chains and theoretical positions, column customizations were added for more user-specific data tweaking. Also, with theoretical positions, you can now independently adjust the price or volatility for each leg. The list goes on and on.
Other tools in the TradeStation arsenal include Radar Screen, Scanner, Matrix (ladder trading), and Walk-Forward Optimizer, among others.
One last critical piece of TradeStation's tools offering is EasyLanguage, TradeStation's own proprietary coding language that allows traders to run wild with indicator and trade-strategy customizations. Clients can share and sell their work via the TradeStation TradingApp Store (previously the Strategy Network). Some products are free, while others can run for less than $50 per month all the way up to hundreds of dollars per month. Overall, with EasyLanguage, the sky is the limit, which is why it is no surprise that as of year-end 2015 there were several hundred developers and close to a thousand different products available.
For mobile trading, we found TradeStation to be pretty good. The app was entirely rebuilt back in 2013 and the quality of the new app immediately showed thereafter. Charting was significantly improved, and, overall, the app was much smoother than its previous iteration.
This growth extended into 2014 as the broker added functionality, such as the ability to trade from the chart or use custom time frames with charts.
Then, in 2015, much to our liking, TradeStation added basic stock alerts and push notifications. While advanced alerts based off studies are not yet supported, supporting order notification push alerts is a nice plus. The highlight update of 2015, though, came right before the year-end with the launch of complex options trading. Alerts and mobile options spread support were two big features we had on our wish list after the 2015 Review.
Looking at 2016, we’d love to see TradeStation extend the apps usability to include Touch ID login (fingerprint login) and extend the charting functionality to display after-hours data. Watchlist syncing with the platform would also be welcome.
With all the variables considered, TradeStation’s mobile trading offering is clean and effective, and provides the core functionality of what active traders need to succeed. It still trails the industry leaders in mobile due to its lack of broader functionality, such as mutual funds trading support, third-party ratings for equities, video content, and the like. Limitations aside, though, we can see why the app finished 2015 with the high user ratings in the Apple App Store and Google Play Store.
TradeStation offers little research and, as a result, is not recommended for this category (like all active trader niche brokers). See: Best Brokers for Research.
In the education department, TradeStation customers will find its offering pretty good, for the most part. Customers are provided with two or more daily webinars, on average. Webinars are archived for viewing on demand, and a variety of live events are provided throughout the year. That said, topic specification is focused primarily on options and equities. We found little or no education on ETFs, mutual funds, bonds, and retirement. Trading education aside, platform education is vast and well-constructed. For example, TradeStation’s YouTube channel offers several hundred help and tips videos for using the platform. See: Best Brokers for Education.
With more than 30 years of history, TradeStation is a leader and innovator with its offering of a full-feature trade platform and high-power trade tools. The TradeStation platform is top notch in our books, and its appeal to active traders and professional investors is rivaled by only a select few.
While not the broker for everyone, especially new investors, TradeStation’s well-respected place in the realm of niche brokers should continue to grow in 2016.
Blain has been involved in the markets for over 15 years, heading StockBrokers.com broker research and reviews. His personal blog, StockTrader.com, provides education articles as well as to-the-point market recaps to over 17,000 subscribers.
TradeStation offers three commission plans. For simplicity we utilized the Flat-Fee plan throughout the site. Full commissions schedule including all three plans are broken down below.
Data & Fees - TradeStation clients need to purchase real-time data feeds to enable trading. To receive primary equities data, ie S&P 500 indices, NASDAQ, NYSE and AMEX, the price is $7 per month ($4 + $1 + $1 + $1). Level II quotes run $11 per month, and so on.
TradeStation charges an "Account Service Fee" of $99.95 per month unless you reach any of the following trading activity minimums during the preceding month: A. Stocks - Trade 5,000 shares. B. Options - Trade 50 contracts. C. Futures - Trade 10 round-turn futures or futures option contracts or 50 round-turn single stock. D. Other - Have at least $100,000 in account balance on the last day of the previous calender month.
Both TradeStation Webtrading and OptionStation are free for all clients with no monthly service fee charges.
Stock Trades - TradeStation offers two commission plans: Per-Share and Flat-Fee.
Customers much choose one commission plan per account. All phone orders cost $20 extra per trade. Pink sheet stocks (OTCBB) are also available for trading at a rate of $.01 per share for the first 10,000 shares then $.05 per share thereafter.
Options Trades - TradeStation offers two plans for options trades.
Mutual Funds - Mutual funds cost $14.95 per trade. Other fees may apply depending on the fund. Note though all mutual fund trades must be placed via phone and cannot be made through the platform.
Other Investments - TradeStation also offers futures, forex, bonds, and t-bills. IRAs are charged a $35 yearly account fee and a $50 fee for termination.
All pricing data was obtained from a published web site as of 2/16/2016 and is believed to be accurate, but is not guaranteed. The StockBrokers.com staff is constantly working with its online broker representatives to obtain the latest pricing data. If you believe any data listed above is inaccurate, please contact us using the link at the bottom of this page. For stock trade rates, advertised pricing is for a standard order size of 500 shares of stock priced at $30 per share. For options orders, an options regulatory fee per contract may apply.