TradeStation® review 2022
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TradeStation: Best for
- Active trading
- Trading platform
- Options trading
TradeStation wants to appeal to active traders, and you can see it throughout the broker’s setup. It focuses on low commissions, futures trading, a high-caliber trading platform, tons of technical tools and more. What it doesn’t focus on includes bonds, mutual funds (especially those without a transaction fee), research and fractional shares. So, experienced traders are likely to find quite a lot to like here, while newer hands will have to carefully consider if TradeStation meets their needs. TradeStation also offers cryptocurrency trading at favorable prices, especially if you hold a significant balance with the broker, a potential enticement to larger accounts.
Active traders looking for a potential broker should also check out Interactive Brokers, which caters heavily to that segment as well. It’s also a solid pick if you’re looking to trade crypto, though you can get that exposure at Robinhood or Webull. Newer investors would do well to check out Fidelity Investments, for its wealth of research, education and customer support – perfect for beginners.
TradeStation: In the details
Top features you’ll love
This well-regarded tool allows you to evaluate your options positions or potential strategies. OptionsStation Pro provides a graphic visualization of a strategy’s profit and loss, and you’ll be able to set up options trades quickly and efficiently, even multi-leg options. The tool is incorporated into TradeStation’s desktop trading platform for ease of use. This tool is available on the broker’s TS SELECT platform at no additional cost.
This backtesting tool provides portfolio-level reporting on your performance, analyzing the risk of your holdings and can optimize the portfolio for almost any combination of holdings. Portfolio Maestro helps you reduce your downside and avoid overexposure to risks across the portfolio. It’s also integrated into the broker’s high-powered desktop trading platform. This feature is available on the broker’s TS SELECT platform at no additional cost.
Pros: Where TradeStation stands out
TradeStation offers two major pricing plans, allowing customers to select the plan that fits them best.
TS SELECT: The broker charges $0 commissions for stock and ETF trades, putting it right in line with other major rivals such as Fidelity Investments and Charles Schwab, though it doesn’t offer all their benefits (see more below). With this plan, you’ll pay $0.60 per contract for options trading and receive access to all the broker’s trading tools, such as OptionsStation Pro and Portfolio Maestro, via the TradeStation desktop platform at no additional charge.
This plan requires an account minimum of $2,000.
TS GO: The broker charges $0 commissions for stock and ETF trades, competitive with major brokers. With this plan, options trades cost $0.50 per contract, though you won’t have free access to all the broker’s features and tools, such as those listed above or others, including other backtesting tools. If you do use the broker’s desktop platform on this plan, you’ll incur trading surcharges of $10 for each stock or options trade.
This plan does not require any account minimum.
With either plan, TradeStation is offering competitive commissions on stock and ETF trades as well as undiscounted options commissions that are among the best in the industry from a full-service online broker. For options, the industry standard is $0.65 per contract. So TradeStation beats that figure regardless of which pricing plan you choose.
TradeStation offers a pair of platforms — one desktop and the other web-based — that bring the power of the broker to the forefront.
The desktop platform is the flagship and offers a fully customizable experience that should appeal to professional traders. Traders can use the broker’s own built-in charting indicators or create their own. The platform features more than 180 technical and fundamental indicators, and you can create your own too. Plus, decades of historical data allow you to backtest any strategy you develop. The capabilities go on and on. If you want these features, you’ll probably want to go with the broker’s TS SELECT pricing plan.
The web-based platform offers the core functionality of the desktop platform but will be easier for less-experienced investors to navigate. This platform also provides streaming real-time quotes, one-click trade execution, dozens of technical studies, historical market data, streaming market data, watchlists and more. This platform is available on both the TS SELECT and TS GO pricing plans.
In addition, the broker offers a mobile trading app called TradeStation Mobile that allows you to analyze charts with technical indicators, including many from the desktop platform. You can also monitor a watchlist of securities with streaming quotes as well as place trades, among other functions. You’ll also be able to see detailed options pricing with up-to-the-second data and set up trade alerts based on technical factors that you’re watching.
TradeStation delivers the range of securities that you’d expect from a broker geared toward advanced traders. In addition to the usual offerings of stocks, bonds, ETFs and mutual funds, investors can swap futures contracts and futures options, too. The only major category missing is forex, a rarely offered asset class, and TradeStation also offers cryptocurrency trading (more below).
Unlike many brokers, TradeStation offers direct cryptocurrency trading, allowing traders to buy and sell Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and USD Coin. Pricing on crypto trades is better than what you’d find on other sites, with commissions starting at 0.3 percent of trade value and declining to as low as 0.05 percent for those with more than $1 million in assets with the broker (not your trading volume, as is typical with crypto exchanges).
TradeStation also allows you to earn interest on your holdings, and you’ll be able to trade your assets or withdraw them at any time without penalty. The broker has its own trading platform for crypto, with one-click order entry, charting, pricing from multiple markets and more features.
In late 2021, TradeStation rolled out the ability of IRAs to trade cryptocurrency. So clients will have the ability to trade this high-risk product in their retirement accounts, if they so decide.
Cons: Where TradeStation could improve
Mutual funds and fees
The broker offers funds from more than 50 fund families, including some of the largest and most popular such as Vanguard, Blackrock and Fidelity. However, its list of available funds is decidedly thin, with just 2,000 offerings, in comparison to more than 10,000 at some other brokers. That said, TradeStation does include many of the top fund companies, so you’ll still likely find what you’re looking for.
And unlike other brokers, which offer literally thousands of mutual funds without a transaction fee, it’ll cost you $14.95 to buy and sell a fund at TradeStation. Many large brokers, including Fidelity and Vanguard themselves, have thousands of funds without a transaction fee. So TradeStation is not well-suited to mutual fund investors.
The TS SELECT and GO accounts each have their own minimum balances, and TradeStation clients can get into a GO account without any minimum deposit. If you want to open a SELECT account, you’ll have to fund a $2,000 minimum deposit, the highest among brokers that we cover.
Most major online brokers have moved away from minimum opening or account balances, so it’s too bad that TradeStation maintains them for one of its account types. Of course, you can choose the GO account and get started with no minimum but won’t enjoy some of the broker’s features at no cost, such as its trading tools.
No fractional shares
TradeStation does not support fractional shares, either as purchases or dividend reinvestments. That may not matter for the active traders who are likely to find TradeStation an attractive partner, but beginning investors likely won’t find it an endearing characteristic in a new broker.
TradeStation can hit you with a number of costly account fees:
- The broker charges a $50 inactivity fee per year if you don’t trade at least five times in the prior 12 months or maintain an average end-of-month equity balance of $2,000. While this fee is not especially tough to avoid, other major brokers have eliminated inactivity fees entirely.
- The broker levies a $35 fee annually for any IRA accounts.
- The fee for terminating an IRA is $50.
- An outgoing account transfer costs $125, the highest of all the brokers surveyed by Bankrate.
While they may not encounter these fees all that often as customers, investors will likely find them pesky when they do. And virtually no other broker has an inactivity fee or an annual IRA fee. Heck, Fidelity and Interactive Brokers don’t even charge you to transfer out your account.
Research and education
TradeStation provides very limited research offerings and reports, all while leaving investment selection largely up to the investor. That may be fine if you’re an advanced or professional investor and have already developed resources to fill this need. You’ll know what you want, but newer investors will likely need more guidance. That said, you’ll have access to a number of screeners that may help whittle down the field of interesting securities for you.
And if you’re a new investor and looking for investing education, TradeStation’s limited abilities here may not suffice. A number of other brokers make it much easier for newer investors to get up to speed and learn what to do.