E-Trade review

On-line since: 1983
Country of origin: US
Regulation: FINRA, SIPC
Payment options: wire transfer, bank cards, electronic payment systems
Minimum account size: $500
Minimum lot size: 0.01 lot
Leverage: up to 1:2
Spreads: -

About the company:

E-Trade offers shares, options, ETF, options contracts, futures contracts, and bonds trading. The broker accepts only US traders.

Company’s history

In 1982, William A. Porter and Bernard A. Newcomb founded TradePlus in California with only $15,000 in capital. Then in 1991, Porter and Newcomb established a new company, E-Trade Securities. They started providing services via America Online and Compuserve. By 1994, the firm’s revenues reached almost $11 million.

Only two years after, the company had 73,000 clients, and the number of trades processed every day amounted to 8,000 with quarterly revenue of $15 million. In June of 1996, the firm went public via an initial public offering (IPO).

In the early 2000s, E-Trade and TD Ameritrade were expected to merge. However, they could not come to an agreement over pricing and management rights. Instead, E-Trade acquired two former discount brokers, Harrisdirect and Brown & Company.

As a result of numerous commercial transactions, E-Trade is now headquartered in New York and also has 30 offices in the US.

Security of funds

Equities and services provided by E-Trade Securities LLC are regulated by FINRA/SIPC. Investment advisory services are delivered via E-Trade Capital Management LLC registered as an investment advisor. E-Trade Futures LLC that offers futures products and services is a member of the NFA. E-Trade Securities LLC, E-Trade Capital Management LLC, E-Trade Futures LLC, and E-Trade Bank are separate but affiliated companies.

Trading conditions

E-Trade has several types of accounts: brokerage, retirement, custodian, and IPA.

Minimum deposit

Trading with E-Trade starts from depositing at least $500. Such an amount is the industry standard, but it is a low deposit for US brokers, as many companies requires a minimum initial deposit of $1,000.

Lower deposits are offered by the CySEC-regulated brokers.

Spreads and commissions

E-Trade charges $6.95 for stock transactions and $6.95+$0.75 per contract for option transactions. There are also volume discounts. It means that traders may pay from $4.95+$0.50, if they make more than 30 transactions every quarter.

E-Trade’s commissions are not the lowest. However, a lot of traders note that clients receive a lot of perks, including powerful trading instruments and precious additional functions, for their money.

Leverage

After opening a margin account, traders can borrow from the broker up to 50% of the deposit. Margin will help clients increase their income.

Don’t forget about a Margin Call (a situation when a balance on an investor's account falls below the minimum allowable level). Due to high rates, traders can lose more than their initial account balance. So, be careful when working with leverage.

Trading platforms

E-Trade has three trading platforms: E-Trade Web, Power E-Trade, and E-Trade Pro. All of them are free and available to every client without trading activity and a minimum balance.

E-Trade Web offers free streaming market information, real-time quotes, market commentary, analytical stock reviews, etc. The toolbar allows clients to track their accounts, create watchlists, look through market data, and complete transactions, including complex option strategies.

E-Trade Pro, the company’s desktop platform, is impressive with its tools to generate ideas, such as Strategy Scanner and backtesting.

Power E-Trade is the best choice for active traders. It was acquired by OptionsHouse several years ago. This web platform provides real-time data, more than 100 technical studies, over 30 plotting tools, and trading strategies.

Special services

Traders can use the service of ready-made portfolios which include mutual funds and exchange-traded funds.

Investors who appreciate analysts’ recommendations may benefit from consensus ratings from several third parties, including individual analysts through TipRanks.

Charts on the broker's website include a Trefis price estimate on the chart with a quick link to view a complete Trefis analysis.

Support service

E-Trade claims it provides a 24-hour support via phone and online chat. Traders can find the phone number on the broker’s website. There, clients can also write to online chat or find emails of closest offices, and set up a personal meeting in the representation office.

Besides, traders can contact a manager directly from their account. Clients can also send secure messages and even upload documents.

Please mind that support service managers can’t provide tax consultancy.

Despite the fact that the broker supports all main means of communication, many companies also offer support via real-time video chat.

Payment options

There are several ways to deposit and withdraw funds, including:

E-payment systems: use Transfer Money.

Account transfer: transfer an account from the other company.

Wire transfer is the quickest way, and money is usually credited to your account on the same business day.

Cashless payments: Visa/MasterCard and many other bank cards are accepted.

Send a receipt by post: traders can make a deposit in the local branch of E-Trade.

Time of money withdrawal will depend on the method of payment.

Feedback

Russian traders are interested in opening an account with the broker. They must have a valid US residence permit. In general, Russian investors complain about no Russian language support. There are also a lot of complaints about money withdrawal or dishonest trading on the Internet.

E-Trade continues to innovate trading thanks to acquiring OptionsHouse in 2016 (now it is known as Power E-Trade). Though the broker’s commissions are higher than these of most, it is generally a good offer.

Advantages:

• well-regulated broker;
• advanced trading platform;
• analytics.

Disadvantages:

• accepts only US residents;
• high deposit;
• high commissions.