ETrade Financial Corporation and Tradeking are both online stock brokerage services for investors.
E-Trade Securities Inc. was founded in 1991, offering trading services via America Online and Compuserve. It went public in 2003, changing its name to E-Trade Financial Corporation.
In August 2005, it acquired Harrisdirect, a former discount brokerage service of Bank of Montreal and Brown & Company, a former discount brokerage service of J.P. Morgan.
A younger company, TradeKing Launched in December 2005, offering online brokerage services for stock and option traders. The firm was an early adopter of using social media for investors and traders, with free blog support and other web based tools since it was founded. May 15, 2012 TradeKing and Zecco, the industry’s two most advanced socially-enabled online brokerages, announced they were to merge.
ETrade Financial Corporation and TradeKing are online brokerage firms where investors can buy stocks, options, mutual funds, and exchange-traded funds.
Clients of ETrade can transact via electronic trading platforms or by phone, where as all TradeKing transactions are online.
How do margin rates between the two compare?
With both, margin rates depend on the client’s balance. For example, on 5 October 2014, a client of TradeKing with a balance of $1,000,000 or more would get a margin rate of 4.00%, and a client of ETrade with the same balance would get a rate of 3.89%. However, a client with a balance of $10,000 would get a margin rate of 7.75% with TradeKing and 8.44% with ETrade.
Both TradeKing and ETrade take client security very seriously and have robust systems in place to prevent unauthorised activity.
TradeKing provides account protection with SIPC plus additional insurance, at no additional cost to investors.
In the unlikely event that a User ID or password are compromised, ETrade have Security ID in place – a system that requires clients type in a 6 digit code each time they login.
When it comes to customer service, both Etrade and TradeKing offer support via telephone, email and live chat. However, Etrade offers support 24/7, TradeKing does not.
Commission and fees
All stock trades with TradeKing are a flat $4.95 per trade, regardless of order type or size. For any stock under $2.00 per share, an additional $.01 per share is charged (maximum 5% of trade value). Option trades are $4.95 + $.65 per contract. Mutual funds cost $9.95 for non Loaded funds and are $0 for Loaded funds. Additional fees apply for Loaded funds.
With Etrade, stock trades are a flat-rate $6.99 if 1,500 or more trades are made per quarter, $7.99 if a minimum of 150 trades are made per quarter, or $9.99 if 149 trades or less are made per quarter.
For any stock under $1 per share, only limit orders (no market orders) may be used to place trades. When trading options, an options regulatory fee of $0.014 per contract with a $0.04 minimum will apply. All mutual funds cost $19.99 per trade. Additional fees may apply depending on the fund.
Research, platforms and tools
Etrade’s research area allows investors to create their own strategy profile by price, investment, period of time, volatility, and market outlook such as neutral or volatile. They also provide an options analyser, a probability calculator and an options screener.
Most services provide basic tools, but ETrade’s tools go a step further. With the option trade tool, investors can place basic, spread, buy-write, butterfly, or condor orders with ease. They can then monitor their options, positions, and orders. ETrade also provides portfolio and risk analysers.
The research area on TradeKing’s website allows investors to navigate from the quote to charts, news, options chains, fundamentals, financials, and analysis. It’s visually appealing, with the graphs having key points that are easily identifiable. Lastly, TradeKing provides third-party research from Standard & Poor’s. TradeKing provides seven different options tools, most of them provided by third-party IVolatility.
Awards – what does the industry think?
In 2013 ETrade won second place in the StockBrokers.com awards, where they earned four stars, Best Smartphone App, and Best Client Dashboard. In 2014, they fell to fourth place; however, they received a four and a half star rating and won best Smartphone App and best Client Dashboard again.
Meanwhile, in 2013, TradeKing was awarded Most Innovative Broker and Best Trader Community, and was rated 4 stars for commissions and fees. In 2014, TradeKing received 4.5 stars for Customer Service. They also won #1 Trader Community.
Both ETrade and First Trade provide trading apps for iPhone and Android mobile devices.
In a nutshell
Excellent customer service, very easy to use platform and tools.
Commission and fees are on the slightly more expensive side.
Excellent customer service, very competitive commission and fees.
Apart from the research area, not the easiest site to use.
Although ETrade pricing is slightly higher than Firstrade, it is still fair for the support the investor receives. Firstrade offers a great fee schedule and the lowest commission, but ETrade seem to have the edge – the industry awards certainly think so too.
While TradeKing isn’t perfect, it provides clients with a decent experience at a discounted price. ETrade is more expensive, but does have an excellent site and investment offering. In this case, you get what you pay for.