E*Trade®

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Bottom line in a sentence

While E-Trade may not offer the lowest per-trade cost structure, the online broker has a wide variety of valuable tools and easy-to-understand resources that offer a lot of value for beginners.

E*Trade at a glance

Star Rating

4
  • Affordablity: 4 of 5
  • Usability: 4 of 5
  • Tools & Research: 4 of 5
  • Mobile: 4 of 5
  • Scalability: 4 of 5
  • Minimum Balance: $500
  • Cost per stock trade: $6.95
  • Cost per options trade: $6.95 plus $0.75 per contract
  • Commission-free mutual funds or ETFs: Over 200 commission-free ETFs, and thousands of no-transaction cost mutual funds
  • Customer service: 24/7 phone and online chat support.
  • Best for: Beginning investors looking for practical tools to help them grow

What it is

E-Trade is one of the oldest online brokers, founded in 1982 and offering its services on the very first internet providers including America Online and Compuserve. The company has been focused on growth ever since, most recently through the $725 million acquisition of trader-oriented broker OptionsHouse at the end of 2016 in a bid to take its platform to the next level.

In many ways, the high-powered tools of OptionsHouse are exactly what E-Trade needed. Many of its tools are incredibly useful and accessible. However, it's still a bit outside industry norms on its standard pricing model, charging a bit more than its peers.

Still, with a very in-reach discount model available to traders and a large menu of commission-free ETFs, there are a few ways to keep your costs down. And even if you can't get under standard pricing, the broker's hands-on tools may be worth it to many investors.

If you're a buy-and-hold investor focused on funds then perhaps Ally isn't a great place for your money. But even rookie traders will like the low cost structure and the incentives that unlock once your portfolio and activity reaches a moderate level.

What it costs

E-Trade's standard pricing is a bit high, with stock trades starting at $6.95 and options pricing at $6.95 plus an additional $0.65 per contract.

However, with more than 200 ETFs, E-Trade does offer a robust suite of commission-free products that could bring your actual costs down. This is one of the highest counts of no-cost funds, and includes popular large-cap index funds from firms like iShares but also more tactical trading vehicles from ETF providers like Direxion and WisdomTree.

Roughly 4,400 no-load, no-transaction-fee mutual funds to complement that lineup should also appeal to the buy-and-hold crowd despite the higher base pricing than competitors.

It's also worth noting that there's a more competitive tier for active or wealthy traders that drops pricing to $4.95 for stocks and ETFs, and $4.95 plus $0.50 a contract for options. A minimum account balance of $250,000 is admittedly prohibitive, but the volume-based requirement is a minimum of 30 trades per quarter – or 10 a month. That's typically within reach for active traders.

What it offers

Even if you can't get your trades down to $4.95 per stock or fund transaction, which is increasingly the bar set by discount brokers online, don't feel E-Trade is just overcharging you.

While some brokers have cut services to keep costs down, E-Trade is committed to using its fees to fund useful tools and research products that assist investors.

Quick comparison of Brokerage options:
Brokerage Overall Rating Avg. Cost Per Trade Usability Rating
e-trade logo Read Our Review
$4.95 4 of 5
charles-schwab logo Read Our Review
$4.95 4 of 5
td-ameritrade logo Read Our Review
$7.50 3 of 5
fidelity logo Read Our Review
$7.50 3 of 5

Some of these specific features worth noting include:

  • Great options functionality: E-Trade acquired OptionsHouse a few years ago but has very much allowed the platform to keep its own identity within the company. Users have to launch the OptionsHouse software separately after they log in, but it's well worth this extra step with easy-to-read and intuitive design on this supplemental platform. There are also some powerful tools like the TradeLab strategy builder that makes it easy to set up multi-leg options orders. That helps with common tactics like a "straddle" trade, but also more arcane metrics that are more aggressive and often harder to craft on your own.
    E-trade trade lab dashboard screenshot
    "Placing your first multi-leg options trade can be intimidating for new investors. The TradeLab cuts out the guesswork, however, offering recommended strikes with a single click when you select your strategy from the drop-down."
  • Demystified technical analysis: No idea what an ascending triangle pattern looks like, let alone what it means? Unsure exactly where resistance levels are for price, and how a stock is trading vs. long-term and short-term averages? E-Trade's got you covered by answering these questions on its OptionsHouse platform – often before you even ask. Just bring up a chart of a given stock and E-Trade flags likely developments in price and volume movements. The algorithm isn't perfect and technical analysis is hardly a guarantee of profits, but simply demystifying the charts with explainers is light years ahead of what most platforms offer. This feature is educational for newbies to charting, and a practical time-saver for veterans.
    E-trade optionshouse dashboard screenshot
    "Technical analysis and chart-reading are some of the most challenging skills for a new investor to learn. The fact that E-Trade's OptionsHouse platform tries to make this rather arcane discipline accessible on every chart is a great feature that isn't common among other brokers."
  • Idea generation: Equally important is that TradeLab and other features function as practical idea generation tools for investors who may know vaguely what they want to do but need a nudge in the right direction to get started. Its All Star ETFs listing is illustrative of that, with a pre-selected group of what E-Trade sees as the best funds to consider right now. For individual stocks, analyst recommendations monitored by TipRanks let you know which names are in favor among the "smart money" and which stocks most folks on Wall Street are avoiding. This can really help investors who need validation before booking a trade or find the right pick for their portfolio.
    E-trade ETF sort screenshot
    "E-Trade regularly ranks its universe of ETFs, sorts them by strategy and then gives you an easy way to find new ideas and buy in with just one click."
  • Education and tools: Online investing courses offered in partnership with investment research firm Morningstar offer interactive tools and quizzes that demystify common terms and investment vehicles. But what really stands out are features like the onboard technical analysis features or the TradeLab strategy builder – features that are akin to "training wheels" to help investors figure things out. Other items include a tool to help build a bond "ladder" that spreads out maturity dates of you income investments, or a retirement planning calculator to align your strategy with your goals. These real-world illustrations of how the market works are often much more meaningful to new investors than just sitting through a webinar.

What it lacks

Of course, many traders don't need help discovering new ideas. They simply want quality research to give them confidence in the ideas they already have. In that respect, E-Trade doesn't offer the depth of experience that other brokers do, allowing you to dig deeply into third-party white papers or fundamental analysis with just a few clicks.

Similarly, sophisticated investors may not feel satisfied with some of the functionality that infringes on their workspace. While I appreciated many of the suggestions when charting a stock or exploring options trades, there were a handful of head-scratchers that simply were not helpful – and for the inexperienced, may simply turn into an over-complicated distraction.

It's also worth noting that despite a few top-notch offerings for options investors, a few irritations remain such as rather vanilla options chains that don't bother to prioritize in-the-money strike prices. Furthermore, for all the resources on E-Trade proper, there isn't an easy way to get between the OptionsHouse platform and the flagship portal despite roughly two years of shared ownership. This may make it a bit more challenging to those folks new to options.

To be clear, E-Trade offers a quality experience that straddles the world between a niche platform solely for traders and a lowbrow broker catering to the "set it and forget it" crowd. But pulling off such a Goldilocks approach that is not too intimidating but not too shallow is not without its difficulties.

This broker is best for...

E-Trade has some shortcomings, including a standard pricing that is a bit high and a few holes in tools. However, the platform seems to put a priority on practical trading experience by giving functional tools to place trades instead of just high-powered screeners for the pros and fluffy educational videos for the newbies.

That alone is a plus, but the ability to grow with E-Trade makes that an even more compelling proposition. With just 30 transactions a quarter, customers win a discount on your fees – and after veterans deploy its more sophisticated OptionsHouse charting platform, it's going to be hard not to spend time researching and trading.

If you're looking for rock-bottom prices or a more academic approach to investor education, E-Trade may feel like it comes up short. But for relatively new investors looking for a little bit of help as they earn practical experience, E-Trade is worth the moderately higher fee structure.