TradeStation at a glance
What TradeStation is
The online broker space has seen plenty of consolidation over the years, most notably from larger legacy players snapping up the more trendy upstarts that cater to active traders. But while TradeStation was acquired by Tokyo-based financial powerhouse Monex in 2011 for a little over $400 million, it has remained very much faithful to its beginnings as a niche product with a laser focus on active traders.
This makes it really stand out vs. the one-stop-shops for all things investing. For rookie investors, this may honestly make TradeStation a non-starter. But for anyone with a serious interest in investing and a desire to roll up their sleeve and do serious hands-on research, TS offers both a flexible and appealing platform as well as a competitive cost structure that only gets better the more you use it.
That makes it perfect for active traders looking for a professional-grade experience, both on desktop and on mobile.
What TradeStation costs
TradeStation's standard pricing for stock trades is $5.00, with options trades $5.00 plus $0.50 per contract. When it comes to standard pricing, that's near the bottom of the brokerage space right now.
Beyond that standard structure, TS also offered the option to select per-share pricing instead if you're placing larger orders. This starts at $0.01 per share, improving to $0.006 after the first 500 shares – which can really add up even with the $1 minimum order threshold.
And if you're a heavy hitter, "unbundled" pricing can cut your cost as low as $0.002 per share with a minimum of just $0.50 per individual trade. That requires 5 million total shares to be traded each month, of course, but for the most active traders it's a great way to cut costs and focus solely on the profitability of your investments.
Admittedly, these flexible commissions can be as off-putting to novices as they are attractive to veterans. It's intimidating enough to figure out how to get in control of your finances without having to worry about monitoring how many trades you're making and what you actual cost basis will be.
What TradeStation offers
Of course, novices clearly aren't the core audience of TradeStation, as the features clearly show.
At first glance, the TS interface seems clean almost to the point that you fear something may be missing. But just a few minutes of interacting with the menus and options shows that this online broker is committed to cutting down clutter and simply focusing on speed and usefulness, without the bells and whistles of other providers.
Here are some features that illustrate this:
What TradeStation lacks
There is a lot for active traders to love about TradeStation if you're trading big lots of stocks or if you're actively engaging in multi-leg options strategies.
However, it's safe to say that the typical investor is left out. For all the charting power, there isn't a lot i n the way of simple whitepapers about business fundamentals or the newsfeeds that many investors equate with research. In other words, if you're someone who thinks in terms of months or years, typically looking for companies seeing better of revenue growth this year vs. last year, you aren't going to find what you're looking for.
There are no commission-free ETFs or mutual funds, either, which makes the cost structure less attractive for those looking mainly at a portfolio of diversified fund investments.
Sure, TradeStation University is a free resource that looks to educate investors. But these topics gloss over the true basics and jump right to topics like futures, IPOs and cryptocurrencies. There are also in-depth live events and webinars, but again these are typically on sophisticated ideas, short-term trade ideas or simply education on how to use the software and platform better.
In other words, TradeStation has no interest in getting novice investors turned into experts. It wants to showcase the best of its tools to veterans, and ensure those investors stay as active and as loyal as possible.
That's good for the elite day traders out there, to be sure, but a bad experience for everyone else.
It's also worth noting that it's difficult to truly know what you're getting into ahead of time. Many other platforms allow you access to the full suite of tools after you simply register account and before you transfer funds over, but TradeStation doesn't allow you to see a single chart or even use its simulated trading environment until your $500 minimum is deposited. That's a bit out of step with the norm, and worth remembering if you're just a tire-kicker.
TradeStation is best for...
TradeStation has the word "trade" in the name for a reason. Many folks who are buy and hold investors will be turned off, but active and self-directed investors who embrace the moniker of day trader will be right at home with this powerful and flexible platform.
The best part is that if you're starting with TS because you're serious about stocks and options, it will grow with you over time. That can be either through discounted commissions as the volume of your trades increases, or in other asset classes such as futures and forex.
Heck, there's even an TradingApp Store where the trading community on this broker create their own custom strategies and screens and share them with each other!
This is clearly not an environment for the inexperienced. But for veteran traders, the flexibility is a dream come true – and the low cost structure is the icing on the cake.