Stock trading is more than just a hobby for many people. It’s a way to boost income and prepare for the future. In this online stock broker comparison, we’ll take a look at two of the biggest players – eTrade and Trade Station.
History of the company: eTrade
ETrade dates back to 1982, though under a different name. E-Trade Securities launched in 1991, offering online trading services through America Online and Compuserve. It grew through the 1990s, with a few alterations to the name, and went public in 1996. It continued to acquire other online and discount brokerages, but was hit with a crisis related to its subprime mortgage interests in 2007. It restructured in 2008 and has continued to operate as one of the top names in online trading.
History of the company: TradeStation
Also launched in 1982 with a different name, TradeStation followed a similar path through the 1990s, launching its flagship product in 1991 and going public in 1997. By 1999, it had shifted from being a trading software provider to offering online trading services. Since then, it has acquired other brokerages and expanded to offer software and online stock trading.
Stocks, Options, Futures, Forex, ETFs, Mutual Funds, Bonds and Fixed Income, International investing
Stocks, Options, Futures, Forex, ETFs, Mutual Funds, Bonds, T-Bills, Bulletin Board and Pink Sheet Stocks
Margin Rates: eTrade
Margin rates for stocks, options, and ETFs range from 8.44% (4.30% above base rate) for balances less than $24,999.99 to 3.89% (0.25% below base rate) for debit balances of $1,000,000 and more.
Margin Rates: TradeStation
Margin rates range from 8.50% for balances of less than $25,000 to 6.25% for balances of $10,000,000 and above.
Financial Security: eTrade
Member FINRA/SIPC; Member FDIC.
Financial Security: TradeStation
Member NYSE, FINRA, NFA, SIPC.
Customer Service: eTrade
ETrade offers online chat with customer service. 24-hour phone customer service is available, though employee stock plan service is only available Monday through Friday. Email and postal communication is available, and eTrade branches are available in a number of US states. ETrade’s service to international customers is also available 24 hours a day, 7 days a week, but is limited to English-only service.
Customer Service: TradeStation
Online help is available, but limited to certain types of assistance. Accounts can be opened by email or over the phone, within set business hours. Trades can also be placed by phone, with different hours depending on the type of trade. Most services are open 24 hours Sunday through Friday, including technical support and client services.
Commission and Fees: eTrade
ETrade charges no per share fees, and offers discounted pricing for customers doing 150 or more trades per quarter. Standard rates are $9.99 for stocks, options, and ETFs; $0.75 for options contracts; $2.99 for futures contracts; $1.00 for online secondary trades of bonds. Other product fees vary, and no fee is charged for Forex trades.
Commission and Fees: TradeStation
TradeStation offers two fee structures for their products. Paying a per share commission for stocks and ETFs, the price is $0.01 per share up to 500 shares and $0.006 per share thereafter, with a minimum fee of $1.00. Flat fee trading starts at $9.99 for 1 to 9 trades per month and goes as low as $4.99 per trade for 200 or more trades per month. Futures contracts range from $0.25 to $1.20 per contract, and options contracts are $1.00 per contract, with flat fee trading packages also available.
Research and education: eTrade
ETrade offers customers a variety of user friendly investment information. These include Top 5 lists and their Investing Insights offer users timely and actionable advice. They also offer an Online Portfolio Advisor to help with diversification.
Research and education: TradeStation
TradeStation offers a mixture of online and in-person educational tools. These include their Labs, University, and Events. The Labs offer users market analysis and education on techniques and trading methods. University brings together tools and media to help investors make decisions about their investments and to get started. The Events are a mix of Labs and University content, presented in an interactive way, both online and in person.
Platforms and Tools: eTrade
ETrade is known for its easy to use trading platform. The one page website offers users everything they need in one location. They also offer a mobile version, making it easy to do trades on the go. For power users, they also offer a more detailed platform with additional features. They also have a retirement planner for customers looking for retirement solutions.
Platforms and Tools: TradeStation
TradeStation builds upon its background in trading software, giving users a wide variety of platforms. These include a browser based trading platform, a powerful desktop platform, and a mobile application. They also offer additional tools such as market tracking and chart pattern recognition.
– Barron’s March 2014 (4/5 overall, with high marks for Research Amenities, Portfolio Analysis & Reports, and Customer Service & Education)
– Stockbrokers.com February 2014 (#1 for Smartphone App and Client Dashboard, best-in-class ratings for Customer Service, Investor Education, Research, Mobile Trading, and New Investors)
– Kiplingers 2012 (#1 overall ranking, top marks for Customer Service, Investment Choices, User Experience, and Research & Tools)
– Customer Service Institute of America International Service Excellence Award
– Group 5 Stock Plan Administration Satisfaction Survey (#1 overall satisfaction)
– Webby Awards 2014 (Official Honoree in the Financial Services/Banking and Mobile App categories)
– Barron’s (4.5/5 overall, with high marks for Best for Frequent Traders and Best for International Traders)-
– Stockbrokers.com (Best Platform Technology, Platform & Tools, Active Trading, Options Trading)
– Technical Analysis of Stocks and Commodities (TASC) Readers’ Choice Awards (Best Trading System – Stocks, Best Trading System – Futures, Best Institutional Platform, Best Professional Platform, Best Real-Time Data)
Mobile trading: eTrade
Apps available for Android phones and tablets, iOS phones and tablets, Windows Phone, Amazon Fire Phone, and Kindle Fire.
Mobile trading: TradeStation
Apps available for Android phones and tablets and iOS phones and tablets.
Pros and cons: eTrade
Pros: Low cost trading and great customer support.
Cons: Not much in the way of education.
Pros and cons: TradeStation
Pros: Excellent educational resources and a wide variety of trading options.
Cons: Higher trade prices and rates, and limited customer support.
If you’re looking for help finding the right trades to make, TradeStation offers a wealth of advice. However, if you know the trades you want to do, eTrade might offer better value for money.