E*TRADE Review

E*TRADE will be very appealing to thrifty mutual fund investors, old school chartists, and traders with a bit of experience behind them. It’s also a fine place for beginners to start their investing adventure.

Pros & Cons

Overall summary

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Investment options

E*TRADE provides almost everything an investor should expect from a full-service brokerage. Investment choices include funds, stocks, options, futures and bonds. The firm also offers financial planning-focused tools and solid educational content. The most notable features missing at E*TRADE include fractional shares, cryptocurrencies, international trading and forex trading.

Commissions and fees

At E*TRADE, regular stock and ETF trades are $0 and option trades cost $0.65 per contract. No-fee mutual fund trading is a standout feature.

Penny stocks: Unlike Fidelity and Firstrade, which don’t charge a commission for penny stocks, E*TRADE charges $6.95, or $4.95 if there were 30 or more trades in the quarter.

Streaming market data: At E*TRADE real-time streaming quotes cost nothing, but there’s a $1,000 minimum balance requirement to enable them.

Mutual funds: Mutual fund trades are now free and there are no early redemption fees. Additional fees may apply depending on the fund.

Mobile trading apps

In our analysis of mobile trading apps, E*TRADE’s apps continue to shine. Both E*TRADE Mobile and Power E*TRADE Mobile are feature-rich.

E*TRADE Mobile: E*TRADE Mobile works well for beginners and experienced investors alike. It focuses on what matters most to casual investors: portfolio management, quotes, watch lists, market research, and, to a lesser extent than the Power E*TRADE app, trading. Watch lists are customizable and streaming ($1,000 minimum balance required). Quotes flow on to both basic and advanced charts, price alerts, news, and additional research such as third-party reports. E*TRADE Mobile includes Bloomberg TV and basic trade idea screeners for stocks, ETFs, and mutual funds.

E*TRADE Mobile, the broker’s more beginner-friendly mobile app. Press play for a tour of its features.

Power E*TRADE Mobile: While designed for more advanced trading — entering bracket orders, for example — Power E*TRADE isn’t much more difficult to use than the flagship app.

One of my fave features is the Live Action page, which helps you find potential investment opportunities with predefined options screeners categorized by unusual activity, volatility, or technical patterns.

Power E*TRADE Mobile. Press play for a tour of its features.

Mobile charting: The depth of charting capabilities varies by app. Power E*TRADE Mobile provides over a hundred indicators, E*TRADE Mobile has only 10. Indicator differences aside, panning, zooming, and conducting high-level analysis are all very user-friendly and clean.

Other trading platforms and tools

The browser version of Power E*TRADE is responsive, unfussy and comes with some compelling tools. I’ve been investing for longer than I can bear to mention, and booting up Power E*TRADE feels like I’m cozying up on the couch under my favorite blanket.

Charting: Happily, E*TRADE continues to add features to this workhorse platform. This year’s improvements include new chart types, indicators, colors, and drawing tools. There’s more than a hundred indicators and dozens of drawing tools, about par for a trading-focused platform. Some competitors have several hundred. There are enough drawing tools (37) to re-create the ceiling of the Sistine Chapel on the chart of your choice.

If you're too lazy to paint up a chart, Recognia’s chart pattern recognition is to chartists what Tesla’s Autopilot is to personal injury lawyers: a veritable bonanza of tantalizing opportunity. Recognia speedily highlights chart patterns of interest. Once you know what you want to trade, you can adjust trades directly on the chart.

One oddball feature is a button that “inverts” the chart, which reverses all the plots. Is the market having a bad day? Click the invert button and turn your frown upside down. Just don’t forget you did that before entering a trade. I mean, yikes.

Options trading: For casual and active options traders, Power E*TRADE delivers that same blend of usability and functionality. New to options? Check out StrategySeek. Position management is simplified with custom grouping, real-time streaming Greeks, and risk analysis. Some brokers, such as tastytrade, provide what I think are better analytics, but they can also drag you deep into paralysis from analysis.

Futures trading: Like options trading, Power E*TRADE also provides a great experience for trading futures. Multiple futures ladders can be run at once, orders can be fired off with ease thanks to the Quick Trade widget, and, as with options, managing positions is a breeze.

Research

Morgan Stanley’s 2020 acquisition of E*TRADE has bolstered the research offerings. E*TRADE provides everyday investors with everything they need to conduct in-depth market analysis across stocks, ETFs, mutual funds, bonds, and more.

Stock research: Alongside eight PDF research reports for stocks and associated options, E*TRADE offers consensus ratings from multiple third parties, including breakdowns from individual analysts via TipRanks. Proprietary research from Morgan Stanley is a major plus; broker research often goes into far more detail than licensed third-party research. E*TRADE also shares a goodly chunk of ESG ratings.

Web charts: E*TRADE has some unusual and very attractive features. There’s the ability to plot commodity and currency fluctuations as overlays to a stock chart. That’s very useful when evaluating the impact of, say, fuel prices on an airline stock, or the value of the euro against the stock of a company that exports to Europe. Charting on the website includes the Trefis fair value estimate right on the chart, with a quick link to view Trefis's pricing model.

On the downside, the website’s chart layout is a bit archaic. Charts are divided into upper, middle and lower panels. Volume can’t be overlaid on the main chart, where it typically lives in other chart packages.

Education

E*TRADE’s library is where you can pick up some investing smarts when the mood strikes you. The articles I sampled presented both opportunity and risk fairly, and the tone is fairly conversational, but there’s also the occasional bit of kludgy writing, which typically happens in the midst of a major content buildout. More video in the educational articles would be nice.

Learning center: E*TRADE provides a thorough selection of educational content, organized by topic and knowledge level in a library. A wide swath of investing topics is covered, from stock trading to retirement, with dozens of articles in eight categories. E*TRADE is a webinar factory, too. There are at least 25 free webinars offered each month and archived recordings are available.

Customer service

To score Customer Service, StockBrokers.com partners with customer experience research firm Confero to conduct phone tests from locations throughout the United States. For our 2023 Broker Review, 168 customer service tests were conducted over six weeks, with wait times logged for each call.

Customer service representatives were asked for assistance or details in several areas of broker services, including account opening, trading tools, apps, rollovers, active trading, and more. Here are the results for E*TRADE.

• Average Connection Time: 2-3 minutes
• Average Net Promoter Score: 8.2 / 10
• Average Professionalism Score: 8.0 / 10
• Overall Score: 8.1 / 10
• Ranking: 7th of 14 brokers

Banking services

Besides trading, E*TRADE also offers online banking through Morgan Stanley Private Bank. Services include checking accounts with no ATM fees, savings accounts, and debit cards. Morgan Stanley Private Bank is a registered member of the Federal Deposit Insurance Corporation (FDIC), which insures bank deposits up to $250,000.

E*TRADE doesn’t come close to competing with the banking services offered by leader Bank of America - Merrill Edge; but, that said, many clients will appreciate cash management integrated with their brokerage accounts.

Final thoughts

Before I wrap this review, I have to get something off my chest. This is my second year reviewing E*TRADE, and I’ve struggled with how to describe, well, just how purple it is. Check out the screenshots above.

Did you ever read Harold and the Purple Crayon as a child? Do you wonder what became of that cute little scamp Harold after all these years? I bet he went on to become the Managing Director of User Experience at E*TRADE. There’s purple everywhere. I’ve been dreaming in E*TRADE purple.

Purpliness aside, E*TRADE provides a well-rounded offering that will satisfy the majority of investors. Regardless of your investing style, E*TRADE is a reliable, full-service broker with a good mix of easy to use tools.

Here are my top takeaways for E*TRADE this year:

1. E*TRADE excels at satisfying the needs of intermediate traders.
2. The Power E*TRADE-branded platforms (both web and mobile) stick to old-school design design but have a nifty selection of trading tools. This comfy-feeling combo of usability and depth drove E*TRADE to the top ranks of our scoring, winning our No. 1 award for Best Web Trading Platform in 2023.
3. E*TRADE also finished among the five Best in Class for beginners, IRA accounts, options trading, futures trading, banking and penny stock trading.

Is E*TRADE trustworthy?

Yes, E*TRADE is trustworthy. It is a member of the Securities Investors Protection Corporation, or SIPC, and is transparent about its fees and commission structure. It’s a well-established broker, having been founded in 1982, and its 2020 acquisition by Morgan Stanley allies it with that firm’s long history.

Is E*TRADE FDIC insured?

E*TRADE is not FDIC insured because it is not a bank. Like all U.S. brokerage firms, securities customers are protected by SIPC coverage. E*TRADE’s parent company, Morgan Stanley, does operate a private bank, and E*TRADE customers may elect to have their cash balances swept into up to five partner banks, expanding their FDIC coverage.

Is E*TRADE a good choice?

E*TRADE performs very well in several key categories and is one of the best online stockbrokers in the U.S. It's a great choice for most investors.

Is E*TRADE good for beginners?

Our testing found E*TRADE to be a good choice for beginners thanks to its easy-to-use trading platforms for web and mobile and a variety of educational materials that can help accelerate your learning.

Is my money safe with E*TRADE?

Yes, your money is safe at E*TRADE, due to its account protection of up to $500,000 for securities and cash ($250,000 for cash) from the Securities Investor Protection Corporation, or SIPC. The parent company, Morgan Stanley Smith Barney, also carries additional coverage with a firmwide $1 billion cap and $1.9 million uninvested cash per client. Note, however, that as with any broker, insurance doesn’t cover you for market losses.

Is E*TRADE really free?

E*TRADE is a zero-dollar commission broker for trading U.S. stocks and ETFs. E*TRADE makes money from margin lending, loaning securities, and payment for order flow.

Other costs associated with your E*TRADE brokerage account are those such as $0.65 per options contract, $6.95 per trade for penny stocks, $25 for broker-assisted trades, and a few incidental charges that are clearly disclosed on their fee schedule. While there’s no fee for real-time streaming quotes, there is a $1,000 minimum balance requirement to enable the feature.

How much does it cost to start an E*TRADE account?

There is no cost to open an E*TRADE account and there are no minimum balance requirements. There is even virtual trading with “paper money” if you want to practice before investing actual funds.

How do you buy stocks on E*TRADE?

• Open and fund an E*TRADE account.
• Research and select a stock that you believe will increase in value.
• Hit the "buy" button.
• Enter the number of shares you wish to buy, the maximum price you are willing to pay if you aren’t comfortable accepting the market price, and the amount of time the order will remain in effect.
• Preview the order.
• Place the order.

Who owns E*TRADE?

E*TRADE was acquired in 2020 by Morgan Stanley (NYSE: MS), a publicly traded financial services firm.

About E*TRADE

E*TRADE’s roots go back to the 1980s, when founder William Porter had a clever little idea of trading stock via one of those newfangled Apple II personal computer things. After meeting Porter at a party, Bernie Newcomb turned the idea into computer code. Now, thanks to them, virtually anyone can make or, heavens forbid, lose money investing in stocks via the World Wide Web.

E*TRADE acquired online broker OptionsHouse in September 2016 for $725 million, paving the way for what is now branded as the Power E*TRADE platform. In October 2020, E*TRADE was acquired by Morgan Stanley (NYSE: MS).

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