Editor’s Verdict
E*TRADE, part of Morgan Stanley since 2020, is a leading US-based online stockbroker offering its proprietary trading platform, competitive trading costs, except for overnight financing rates, and excellent order execution. It also features retirement planning, managed portfolios, banking via Morgan Stanley Private Bank, and IPO trading. I conducted an in-depth review to determine if equity traders should consider this broker. Is E*TRADE right for you?
Competitive trading fees
Quality trading platforms and mobile apps
Excellent order execution and price improvement technology
40+ years of operational experience and member of Morgan Stanley
Forex, cryptocurrencies, and commodities available only as futures contracts
Limited payment processors
Overview
Excellent order execution and an innovative trading platform for equity traders.
| Headquarters | United States | |
|---|---|---|
| Name of the Regulator | NFA | |
| Year Established | 1982 | |
| Execution Type | Market Maker | |
| Minimum Deposit | $0 | |
| Trading Platforms(s) | Proprietary platform, Web-based | |
| Signals | ||
| US Persons Accepted? | ||
| Islamic Account | ||
| Segregated Account | ||
| Managed Accounts | ||
| Support Hours | 24/5 | |
| Customer Support |  | |
| Demo Account | ||
| Lowest Avr Eur Usd Spread | Undisclosed | |
| Retail Loss Rate | Undisclosed | |
| Minimum Raw Spreads | Not applicable | |
| Minimum Standard Spreads | Undisclosed | |
| Minimum Commission for Forex | $1.50 per futures contract | |
| Commission for CFDs/DMA | ||
| Cashback Rebates | ||
| Deposit Fee | ||
| Withdrawal Fee | ||
| Funding Methods | 2 |
The proprietary Power E*TRADE trading platform offers equity traders a cutting-edge trading environment. Core Portfolios present traders with automated account management for a 0.30% fee. E*TRADE is ideal for traders and investors, offering retirement accounts, fixed asset investments, and banking services.
E*TRADE Regulation & Security
Trading with a regulated broker will limit the potential for fraud and malpractice. I always recommend traders check for regulation and verify it with the regulator by checking the provided license with their database. E*TRADE presents clients with one regulated entity and maintains a secure trading environment.
Country of the Regulator | Name of the Regulator | Regulatory License Number |
US | NFA | 0401545 (EFS) / 0409019 (MSSB) |
Is E*TRADE Legit and Safe?
E*TRADE launched in 1982, but Morgan Stanley acquired the company in 2020. All E*TRADE accounts are now part of Morgan Stanley Smith Barney LLC, an NFA member since May 2009. It only shows three CFTC administrative fines and one NFA arbitration case, making it a legit and safe broker. E*TRADE Futures LLC is also an NFA member with one CFTC reparation case. E*TRADE publishes Basel III Standardized Approach Disclosures and 2018 Dodd-Frank Act Stress Test Results.
The NFA clarifies CFTC Reparations Cases as follows:
“Reparations claims are not enforcement actions. They are attempts by customers to resolve futures-related disputes. The number of reparations claims filed does not necessarily mean that the individual or firm violated any rules. Some of the claims may have been dismissed, settled, or withdrawn.”
E*TRADE Securities LLC (EFS) and Morgan Stanley Smith Barney LLC (MSSB) are SIPC members, offering a protection limit of $500,000, of the net equity, per account and $250,000 for cash claims.
Fees
I rank trading costs among the most defining aspects when evaluating a broker, as they directly impact profitability. E*TRADE offers commission-free equity and ETF trading for online transactions in non-OTC stocks but levies a $25 commission for broker-assisted transactions. Futures contracts start from $1.50, and option contracts from $0.65. Traders pay $1.00 per bond with a $10 minimum and a $250 maximum. Managed portfolios face a 0.30% fee based on assets under management.
Traders also pay the FINRA trading activity fee (TAF) of $0.000145 per share with a $7.27 transaction cap. The FINRA TAF for bonds is $0.00244, and the FINRA TAF for TRACE-eligible securities is $0.00092, capped at $0.92 per transaction. The Section 31 fee of $0.000008 applies to all equity, options, and ETF transactions.
The financial transaction tax (FTT) on ordinary shares and ADRs ranges between 0.20% and 0.30%, dependent on the home country of the listing. ADRs also face a custody fee between $0.005 and $0.05 per share.
Financing charges, or swap rates, on leveraged overnight positions, are 11.95% to 13.95% annualized, an expensive cost for margin traders to consider.
| Deposit Fee | ||
|---|---|---|
| Withdrawal Fee | ||
| Inactivity Fee | false | |
| Commissions/Spreads | Both | |
| Withdrawal options | ||
| Deposit options |
Range of Assets
E*TRADE is primarily an equity broker, offering traders stocks, ETFs, mutual funds, and managed portfolios. Options trading is also available, and traders get exposure to Forex, commodities, and cryptocurrencies via futures contracts. Bonds and fixed-income securities complete the range of assets. E*TRADE follows the basic structure of US-based brokers and caters well to long-term unleveraged portfolio planners and margin traders via the options and futures markets, which dominate the US brokerage scene.
Asset List Overview
| Currency Pairs | ||
|---|---|---|
| Cryptocurrencies | ||
| Commodities | ||
| Metals | ||
| Indices | ||
| Stocks | ||
| Index CFDs | ||
| Stock CFDs | true | |
| Crude Oil | ||
| Gold | ||
| Bonds | ||
| ETFs | ||
| Options, Features, and Synthetics | ||
| Equity CFDs / DMA Shares | ||
| Maximum Retail Leverage | 1:50 | |
| Maximum Pro Leverage | Undisclosed |
E*TRADE Trading Hours (EST)
E*TRADE does not list detailed trading hours of various assets, but US equity markets trade from 09:30 to 16:00. E*TRADE also offers extended trading, which allows trading from 07:00 (pre-market trading) to 18:00 (after-market trading). Futures trading is 24/6.
Account Types
E*TRADE offers brokerage and retirement accounts. The former is identical for all clients, and the latter consists of Rollover IRA, Roth IRA, Traditional IRA, Beneficiary IRA, E*TRADE Complete IRA, and IRA for Minors accounts. Managed accounts are available under the Core Portfolios service, which requires a minimum deposit of $500 versus no deposit required for its brokerage accounts. E*TRADE also offers small business accounts and banking services via Morgan Stanley Private Bank.
E*TRADE Demo Account
E*TRADE does not offer a demo account, but its Power E*TRADE trading platform and mobile app have a paper trading function. E*TRADE does not provide more details and appears to ignore the importance of demo trading.
Trading Platforms
The E*TRADE web-based trading platform offers a user-friendly interface, ideal for part-time traders and long-term investors. It features investing tools and complimentary guidance by E*TRADE, professionally managed accounts from E*TRADE Capital Management, and free independent research from TipRanks and Thompson Reuters.
I like the Power E*TRADE trading platform for traders, as it features an automated chart pattern recognition tool. Other functions include an Earnings Move Analyzer, Risk/Reward Probabilities, Custom & Preset Scans, a cutting-edge charting package, an Exit Plan function, and paper trading. While Power E*TRADE is a feature-packed trading platform, I am missing algorithmic trading functions like market leaders such as MT4. The E*TRADE API allows traders to connect their custom trading solutions to the E*TRADE infrastructure, coded in Python, Java, and Node.js.
Mobile traders get two mobile apps, the easy-to-use E*TRADE app, and the advanced Power E*TRADE app.
Overview of Trading Platforms
| Platform Languages |
| |
|---|---|---|
| OS Compatibility |
| |
| Charting Package | ||
| Scalping | ||
| Hedging | ||
| Mobile Alerts | ||
| E-mail Alerts | ||
| Guaranteed Limit Orders | ||
| Guaranteed Execution | ||
| One-click Execution | ||
| OCO Orders | ||
| Interest on Margin | ||
| Web-based Trading | ||
| Mobile Trading | ||
| MT4 | ||
| MT5 | ||
| cTrader | ||
| Proprietary Platform | ||
| Automated Trading | ||
| Social/Copy Trading | ||
| MT4/MT5 Add-Ons | ||
| Guaranteed Stop Loss | ||
| Negative Balance Protection | ||
| Unique Features | Banking services via Morgan Stanley Private Bank |
Mac
Windows
Linux
iPhoneNoteworthy:
- The E*TRADE trading infrastructure is not ideal for scalpers.
Unique Features
I want to note the excellent order execution at E*TRADE. I also like the availability of IPO trading for qualified clients and prebuilt portfolios, which require a minimum deposit of $500 for mutual fund portfolios and $2,500 for ETF portfolios.
Research & Education
E*TRADE offers market commentary and insights from Morgan Stanley. While they do not include actionable trading recommendations, traders can find interesting trades, developments, and ideas. Registration-based webcasts provide traders with a series labeled Market Insights by Morgan Stanley, with research from analysts, strategists, economists, and portfolio managers employed by E*TRADE and Morgan Stanley. It results in a high level of quality that traders should expect from market leaders.
Beginners can read the Investing Basics category under the E*TRADE Knowledge section, and the E*TRADE Library has plenty of written content and videos, but a well-structured course does not exist.
I find the available educational content a quality addition to an in-depth third-party beginner’s course, which is what I recommend for first-time traders before opening their E*TRADE account. I further advise beginners to start with trading psychology while avoiding paid-for courses.
Customer Support
| Support Hours | 24/5 | |
|---|---|---|
| Customer Support | | |
| Website Languages |
|
Traders get 24/5 support, and I appreciate the availability of phone support, on which E*TRADE builds customer relationships. The FAQ section answers several questions, and E*TRADE describes its products and services well. Given the complexity of products and retirement planning portfolios, phone support is a necessary service E*TRADE offers. I am missing a direct phone line to the finance department, where most issues can arise.
Opening an Account
E*TRADE has a multi-step online account application. The complexity of products may require new clients several minutes to navigate through the application form, but it follows well-established industry standards.
Account verification is mandatory, and most traders get verified after sending a copy of a government-issued ID and one proof of residency document. E*TRADE might ask for additional information on a case-by-case basis.
Minimum Deposit
E*TRADE has no minimum deposit requirement for its brokerage account. The automated Core Portfolios require a minimum deposit of $500, and prebuilt portfolios require a minimum deposit of $500 for mutual fund portfolios and $2,500 for ETF portfolios.
Payment Methods
E*TRADE supports bank wires and bank-related services, like checks and online banking, but not other payment methods. I find the absence of credit/debit cards surprising.
Accepted Countries
E*TRADE caters well to US-based clients and to US persons living abroad, but also accepts traders and investors from all over the world, excepting a few countries which American brokerages typically do not accept residents of.
Deposits and Withdrawals
E*TRADE only offers bank wires and bank-related payment options but has no minimum deposit requirement for its brokerage account. Deposits are free, but withdrawals incur a $25 fee. E*TRADE notes same-day fund availability if funds arrive before 18:00 but fails to mention internal withdrawal processing times.
Only verified trading accounts can deposit and withdraw, and the name on the payment processor must match the E*TRADE account name.
Is E*TRADE a good broker?
I like the trading environment for equity traders using manual strategies at E*TRADE, using the Power E*TRADE trading platform. E*TRADE is also an excellent choice for long-term buy-and-hold investors and retirement accounts. Since Morgan Stanley acquired E*TRADE, clients can receive banking services via Morgan Stanley Private Banking. Overall, E*TRADE offers a competitive one-stop financial institution for traditional strategies. Core Portfolios, thematic investments, and managed portfolios expand the product portfolio, while the E*TRADE API allows advanced traders to connect their trading solutions to the E*TRADE trading infrastructure. I rate E*TRADE among the better choices in the scarce US brokerage sector.FAQs
What type of broker is E*TRADE?
Is E*TRADE a broker?
Is my money safe with E*TRADE?
Can E*TRADE be trusted?
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