Top Rated For:

E*TRADE was one of the first online brokers in the United States. In October 2019, it joined a growing list of online brokers who transitioned to commission-free trading on stock, ETFs, and options trades. E*TRADE has a range of offerings, including three web-based/downloadable platforms and two mobile applications, making it a good choice for both passive investors, casual traders, and everyone in between. Despite the fact it has robust features such as news, research, and screeners, E*TRADE remains intuitive and easy to use. Beginner investors, in particular, will find E*TRADE as one of their best options because of the expansive educational resources it offers.

Aside from this E*TRADE broker review, we've also reviewed the E*TRADE Core Portfolios digital investment advisor service.

Key Takeaways

  • E*TRADE offers a range of platforms that caters to a range of investing styles and interests, including the robust Power E*TRADE platform.
  • E*TRADE has a highly advanced mobile app that is intuitive and easy to use.
  • The online broker offers an in-depth library of educational resources.
  • E*TRADE provides a full range of investment selections that will appeal to both passive investors and traders.
  • On October 2, 2020, Morgan Stanley announced that it has completed the acquisition of E*TRADE in an all-stock transaction.

Who E*TRADE Is For

As a pioneer in the online brokerage industry, E*TRADE has positioned itself as one of the best online brokers for trading options. It is a solid, well-rounded pick for any investor, from beginner investors to advanced traders. E*TRADE has made a push to attract active traders with two quality trading platforms, a full-featured mobile app, a range of investment selections, and robust options trading tools. The Power E*TRADE platform is packed with intuitive, easy-to-use tools for stocks, options, and futures trading. If you’re passionate about tracking the markets and trading, this platform is for you. Its flagship website, etrade.com, offers plenty of education and research, as well as a wide range of no-fee funds. Like many other large online brokers, E*TRADE can bring value to all levels of investors.

Pros
  • Power E*TRADE options trading platform

  • Two mobile apps for investors with different interests

  • Automated portfolio builder integrated into the online brokerage platform

Cons
  • No access to international exchanges

  • Options trading is more expensive for less frequent traders

  • Fractional share purchases are only available through a dividend reinvestment plan (DRIP) or a robo-advisor portfolio

Pros Explained 

  • After purchasing rival broker, OptionsHouse, top-notch option tools have been integrated into the Power E*TRADE platform. The web-based platform provides more than 100 technical studies and more than 30 drawing tools to help investors analyze potential trades. 
  • E*TRADE offers two mobile apps for investors with different investing styles and interests. The Power E*TRADE mobile app offers interactive charts and technical analysis. The E*TRADE mobile app is easy to use and lets investors stay connected to their brokerage accounts and the markets on the go. 
  • The online broker offers automated investment management built into the brokerage platform using Core Portfolios. The robo-advisor will build and manage investor portfolios to help keep clients on track for long-term goals.

Cons Explained 

  • Investors who would like direct access to international markets or to trade foreign exchange currencies will be better served elsewhere, as E*TRADE does not have this capability. 
  • Although E*TRADE has discounted commissions on options trades, it is only beneficial for active, high-volume traders. Options commissions are priced at $0.50 per contract, but only if investors make more than 30 trades each quarter. Otherwise, the standard price is $0.65.
  • Although E*TRADE offers fractional share purchases, investors can only access them through E*TRADE's dividend reinvestment plan or robo-advisor solution. They are not available if investors are trading and investing in a self-directed portfolio.

Usability

E*TRADE has a long track record as an online broker and is well known for its intuitive and easy-to-use platforms. E*TRADE has a user-friendly interface where the platforms can be customized according to the way investors wish to interact with it. The broker has two web-based platforms, E*TRADE web and Power E*TRADE, each with a dedicated mobile app that mirrors the functionality of the web-based platforms. This is convenient for investors, who can open and fund accounts in minutes, whether they're on a desktop or mobile device. 

E*TRADE web is a beginner-friendly platform that provides streaming quotes, portfolio analysis market commentary, and educational offerings—all essential tools for the passive investor. Although it’s not built for investors who require advanced trading tools, its screeners will help them select the stocks, bonds, ETFs, or mutual funds that align with their needs and investment objectives. The E*TRADE mobile app is one and the same. It is one of the best mobile trading platforms in the market, as it’s very easy to use and offers plenty of convenient features. E*TRADE customers can effortlessly keep an eye on their portfolio, place trades, and stream real-time quotes and news on the go. The mobile app offers the full range of investment options available on E*TRADE web, and watchlists are integrated across the multiple platforms. 

The more advanced Power E*TRADE platform is meant for active traders and experienced investors. Thanks to E*TRADE’s acquisition of the OptionsHouse technology several years ago, Power E*TRADE offers charting tools, price alerts, real-time data, more than 100 technical studies, more than 30 drawing tools, streamlined trade tickets, and customizable options tools. The Power E*TRADE mobile app is similarly easy to use because of its modern design and platform layout. 

E*TRADE also offers E*TRADE Pro, a downloadable desktop platform that has extensive customization capabilities. This tool-heavy platform is meant for advanced traders. Overall, the user experience is better on mobile apps than on the web or desktop.

Trade Experience

E*TRADE is one of the original online brokers and is still considered to be among the best. All of the tools that any trader or investor would need are provided across the various platforms. The trading experience on the E*TRADE website is very simple and straightforward. Entering an order on E*TRADE web is as simple as typing in the ticker symbol, selecting an order type, quantity, and previewing the order to ensure accuracy. All of E*TRADE’s trading platform interfaces can be customized to display account and market information, as well as other news and resources in a preferred layout. Watchlists can be created quickly using the symbol lookup. The watchlist views are also customizable, allowing investors to personalize their view by selecting security types and groupings they'd like to see, and to apply over 100 metrics. E*TRADE has a trade button in line with each security on the watchlist, making it very easy to move from observation to action. 

E*TRADE web recently underwent a platform redesign, and significant improvements were made to the options order ticket. The ticket now has several options trading strategies provided in a drop-down menu. The platform can also help investors choose a strategy based on risk tolerance and sentiment of the underlying stock and displays the impact of a trade on buying power. Newer investors with limited options experience will find these features very useful. 

The Power E*TRADE platform is packed with intuitive, easy-to-use tools for stocks, options, and futures trading. It has charting tools that automatically populate charts with technical analysis patterns and education, as well as risk analysis tools that help investors translate the options Greeks into plain English. Moreover, Power E*TRADE’s user experience and workflow gives investors access all of their favorite tools in a single on-page layout that can be personalized to their preferences. As one would expect from a platform built for trading and derivatives analyses, the trade ticket for Power E*TRADE is more detailed than the standard ticket on the web platform. It provides a snapshot analysis tool allowing users to easily understand the probabilities of an options trade at a glance, as well as projects the maximize the profit and loss associated with any particular order. 

Although E*TRADE offers both streaming real-time market data and real-time snapshot quotes through its website and mobile applications, real-time snapshot quotes are refreshed on-demand and delayed quotes are 15 minutes delayed. Nonetheless, investors will be able to trade directly from the charts and have the ability to select tax lots from their portfolio or from the order ticket. The web, desktop, and mobile platforms all allow them to stage orders for later entry, and all platforms support conditional orders, stop-limit orders, and enable trailing stops.

Mobile Trade Experience

E*TRADE pioneered mobile trading and continues to innovate in this area. The broker's award-winning app lets investors connect with the markets and with their accounts from anywhere. The E*TRADE mobile app is ideal for new investors, as it focuses on what matters most to this group—watchlists, market research, quotes, portfolio management, and so on. Both the E*TRADE Mobile and Power E*TRADE Mobile apps also have high customization capabilities and can be personalized to investors' preferred method for interacting with the platform

The mobile apps support the same type of orders as well as the same asset classes as the respective desktop and web platforms. They are extremely similar in functionality to the web platforms as they offer resources such as third-party investment research, real-time data streaming, and market news from Bloomberg TV. There are also drawing tools available in the charting functionality of E*TRADE’s mobile apps. Depending on whether the user is on a tablet or a phone, they can also view or insert drawings created from any of the various platforms. 

The Power E*TRADE app is an intuitive and innovative mobile application designed for active investors and casual traders. It’s loaded with easy-to-use tools that enable them to quickly trade stocks, ETFs, simple and complex options, and futures on a single trade ticket. They can also execute options strategies using the customizable options chain, along with custom and four-legged spreads. And because it is the companion to the Power E*TRADE web platform, they can view market movement with streaming quotes, news, earnings, dividends, gains, and more on the go.

Range of Offerings

E*TRADE customers can trade a wide variety of assets including stocks, bonds, funds, commodities, and futures on all of their platforms. However, they will not be able to trade cryptocurrency or foreign exchange (you can get indirect exposure through ETFs and futures). To help them decide if E*TRADE is best for their investing needs, below is a full list of the online broker’s offerings:

  • Stocks long and short (6,100 on the easy to borrow list) 
  • OTCBB (Penny stocks) 
  • Mutual funds (9,083 total; 4,533 no transaction fee; 5963 carry a front-end or back-end load) 
  • Bonds (Corporate, Municipal, Treasury, CD, International) 
  • Futures/commodities
  • Futures options
  • Single-leg and multi-leg options contracts
  • Bitcoin futures
  • OTCBB stocks (penny stocks)
  • Fractional shares available through E*TRADE’s DRIP 
  • Robo-advisor integrated into the online brokerage platform

Order Types

E*TRADE customers can enter a variety of order types using the web, desktop, or mobile platforms. The E*TRADE web platform will allow them to enter contingent, bracketed, one-triggers-other (OTO), one-cancels-other (OCO), and one-triggers-a-one-cancels-other (OTOCO) orders, while the mobile app only has functionality for contingent and OTO orders. Additionally, when investors are closing out of a position, they can select tax lots from their portfolio as well as the order ticket, enabling them to optimize for tax efficiency. A few other order types this broker supports include market, market on close, limit, stop on quote, stop limit on quote, and trailing stops orders (by dollar amount and percentage).

Trading Technology

Trade execution quality plays a key role in determining where and how orders are routed. Since an order may go directly to an exchange or to a broker, who then routes the order to an exchange, the method a broker uses to route orders will play a role in the price at which the order was filled. E*TRADE works with multiple market centers for end-to-end control over orders in an effort to provide the highest speed and quality of trade executions. 

To seek the best execution available in the market, the broker utilizes advanced smart order routing technology . E*TRADE also uses smart order routers with features designed to access sufficient liquidity to fulfill customer orders while causing the least amount of market impact. Both sequential and spray techniques are used as a part of this strategy, but investors can also choose to route their own orders. 

E*TRADE’s execution quality metrics cover market orders sizes 100-9,999 shares. The average time between routing to an execution venue and the moment a fill report is sent back to E*TRADE is approximately 0.09 and 0.11 seconds for S&P 500 and non-S&P 500 performance, respectively. Additionally, the online broker touts a price improvement of $0.007 per share and $3.38 per contract on all eligible options orders. 

At this time, E*TRADE does not give investors the ability to backtest their trading strategies. The broker recently decided to discontinue the Strategy Scanner tool in E*TRADE Pro as part of a larger plan to streamline its scanner tool offering. Although backtesting isn’t available, Power E*TRADE users can use the Live Action Scanner to uncover potential trading opportunities in real time. The broker offers an automated portfolio builder that can be accessed through the platform, but it doesn't give traders the ability to automate trading strategies in the traditional sense.

Costs

Like many online brokers, E*TRADE’s fees have become more competitive since the race to zero fees ensued. E*TRADE costs are as follows:

  • E*TRADE charges $0 commissions on online stock, ETFs, and option trades. There is no limit on the number of shares that can be traded at this base commission rate.
  • Options contracts are priced at $0.65 per contract if less than 30 trades per quarter and $0.50 per contract if more than 30 trades per quarter. The cost remains the same for a single-leg order for 50 contracts. 
  • It costs $6.95 to trade OTC stocks, including OTC, OTCBB, grey market, and OTC-traded foreign securities. The cost is reduced to $4.95 if the investor executes at least 30 stock, ETF, and options trades per quarter. 
  • Outside of the NTF list, it costs $19.99 to trade no-load funds. 
  • Margin interest rates vary from 8.70% on a $10,000 balance to 5.45% on a $1,000,000 balance. 
  • Bond transaction fees are $100 with a minimum of $10 and a maximum of $250. 
  • Futures transactions cost $1.50 per contract, per side plus fees, and $2.50 per bitcoin futures contract, per side plus fees.
  • There is no fee to close an account (besides an ACAT fee), no maintenance fee or charge for inactivity, and no minimum balance or number of trades to avoid inactivity. 
  • When transferring accounts out of E*TRADE, there is a $25 fee for partial transfers and a $75 fee for full transfers. 
  • A live broker is available at $25. This fee is waived for extended hours and overnight session trades places between 4 a.m. and 7 a.m. Eastern.
  • There is no domestic wire fee for income transfers, but there is a $25 fee for outgoing transfers.
  • International wire fees are $25, and other fees may apply depending on currency.
  • E*TRADE charges $10 to send checks. 
  • Access to the E*TRADE platforms is free of charge. 

How This Broker Makes Money From You and for You

Since the brokerage industry has made an aggressive pivot to lower fees, the methods by which they make money from and for investors aren’t always easy to understand. 

  • Interest paid on cash: As an E*TRADE customer, investors can earn 0.01% on idle cash held in their account. Additionally, if they are investing via a managed account, cash will be automatically swept into a money market fund. 
  • Payment for order flow: It is common for brokers to generate revenue by directing trade orders to different execution venues. On average, E*TRADE accepts $0.47 per contract for options trades and less than $0.0020 for equity trades. However, there are competing brokers who do not accept payment for order flow on equities. 
  • Stock loan programs: These programs generate revenue for brokers who are providing loaned shares to traders and hedge funds shorting the stock. Investors can offer shares held long to E*TRADE’s stock loan program, but they won’t be able to choose which stocks to loan. Nonetheless, E*TRADE will share the revenue generated from these activities with them.
  • Price improvement: E*TRADE reports a net price improvement of $0.007 per share and $3.38 per contract on all eligible options orders sized between 100 and 9,999. Roughly 94% of orders were executed at or better than the national best bid or offer. 
  • Portfolio Margin: E*TRADE offers portfolio margining to eligible investors. However, the interest charge is slightly higher than average. The broker charges 9.20% interest on balances less than $10,000 and 7.20% interest on balances of $100,000.

Account and Research Amenities

E*TRADE offers a lot of high quality tools for investors and continues to develop its options tools and resources in particular.

Stock Screeners

E*TRADE’s Stock Screener is customizable using 47 different criteria across six categories, including market segment, price/volume, analyst opinions, fundamental metrics, earnings/dividends, and technicals. Additionally, investors using the stock screener can view search results across six different views, each of which provides numerous data points. 

Power E*TRADE has a Live Action scanner that has more than 100 pre-defined screens that scan the market in real time on live prices and live analytical metrics. Active investors and traders can scan for stocks, indices, and ETFs based on unusual activity, volatility metrics, Greeks, fundamentals, price movement, or any option or stock activity. They can further use scans in Live Action to help uncover overbought or oversold stocks and explore new opportunities for your portfolio.

ETF and Mutual Fund Screeners

E*TRADE’s ETF Screener has 16 predefined strategies to help beginner investors get started. They can scan ETFs using various criteria, including fund category, expense ratio, performance, risk, Morningstar rating, and so on. They can even search for ETFs that are optionable, and custom screens can be saved for future use, turned into a watchlist, and use a predefined strategy as a starting point—a handy tool for any active investor. Similar to the ETF screener, the mutual fund screener has various screens to implement, including predefined strategies. 

Options Screener

Power E*TRADE has a wide range of options screeners and tools, as well as standard tools that can be bent profitably to analyzing options traders. For example, the Live Action tool can be used to pick up on both volatility and unusual options activity in the market, and Spectral Analysis visualizes the trade under consideration, assisting in maximizing the profit and loss in a given options strategy. This latter feature is also a useful learning tool as it makes the connections between the Greeks and the trade explicit and easy to grasp.

Charting

All of E*TRADE’s platforms include charting capabilities that are built by Chart IQ and Markit Digital. The platforms support various types of charts, including line, bar, candle, OHLC, and many more. Moreover, Power E*TRADE has over 145 chart studies, drawing tools, and indicators, with the ability to save a setup and trade directly from the chart. From dynamic charting and risk-reward analysis to automatic pattern recognition, investors will have everything they need to support their investing style. 

Tools and Calculators

Power E*TRADE has a number of options-related tools, including risk/reward probability charts and the StrategySEEK Tool, which is designed to assist with strategy identification based on certain input criteria the investor defines, outlook on the security, target price for the underlying security, time frame, and specified investment amount. 

Through its web platform, E*TRADE also offers useful tools such as a retirement planning calculator, a Roth IRA conversion calculator, a taxable equivalent yield calculator, a marginal tax rate calculator, a required minimum IRA distribution calculator, a loan repayment calculator, and more. For DIY types, these tools are extremely beneficial. 

Trading Idea Generators

E*TRADE utilizes Argus to deliver daily reports that contain actionable trade ideas on options strategy for both beginner and advanced investors. It also offers daily market reports, intraday trade ideas, market commentary, a weekly newsletter, and monthly portfolio selector reports from Argus. 

In addition, E*TRADE has the Live Action tool that includes technical pattern recognition. With chart functionality that automatically draws support and resistance lines, traders will be able to seamlessly identify technical patterns and analyze the viability of potential trades. 

News

Real-time streaming news is available via Power E*TRADE. The broker offers free Bloomberg TV, Morningstar Intra Day news articles, research reports, market commentary, articles and videos. It also offers daily stock and bond market reports from Briefing.com, a daily active trader commentary, and a weekly investing article. Additionally, it also offers a monthly market commentary. 

Third-Party Research

E*TRADE customers have access to research and ratings from Moody's, Thomson Reuters, Morningstar, MarketEdge, Trefis, Research Team, TipRanks, and Argus free of charge. TipRanks offers aggregated opinions from more than 4,000 sell-side analysts and 4,500 financial bloggers, which is very useful when brainstorming new ideas. Most recently, E*TRADE has added Likefolio consumer insights and Trendwatch to the Power E*TRADE toolkit, providing additional resources to novice and experienced investors alike. Investors with more than $100,000 in assets with the broker will also be granted free access to Credit Suisse. 

Cash Management

E*TRADE customers can earn 0.01% interest on cash balances, and cash is automatically swept into a money market fund if the client invests using managed accounts.

Dividend Reinvestment Plan (DRIP)

E*TRADE offers a dividend reinvestment program (DRIP) through which fractional shares can be purchased.

SRI/ESG Research Amenities

Investors who choose E*TRADE as their online broker will be allowed to screen on environmental, social and governance (ESG) criteria and socially responsible investing (SRI) factors. E*TRADE platforms also offer thematic screening capabilities to identify companies that, for example, engage in robotics or infrastructure. This gives investors the flexibility to align their investments with their interests. Regardless of whether they are searching for ETFs, mutual funds, or stocks, all of these asset classes can be screened according to themes or ESG and SRI factors. 

Portfolio Analysis

All types of investors will find E*TRADE's portfolio analysis tools helpful. The portfolio reports and analyses are available in real-time and they are customizable to suit their specific needs. They also have the ability to view holdings for all US brokerage accounts, which gives them a cross account view of their portfolio. 

As far as gains and losses are concerned, E*TRADE uses a time-weighted performance method, eliminating the distorting effects of money flowing in and out of their portfolio. With this method, the effect of cash flows is eliminated by assuming a single investment at the beginning of a period and calculating the average annual total return at the end of the period. One caveat, however, is that none of the E*TRADE platforms support internal rate of return calculations. 

For active investors and traders utilizing portfolio margining, both margin and buying power are reported in real time. This data includes a buying power summary, requirements by position, and a calculator in real-time. 

When it comes to taxes, E*TRADE users are able to use a variety of tax or financial software with E*TRADE Securities, including TurboTax, H&R Block, GainsKeeper, and Quicken. They can also download capital gains tax reports, calculate the tax impact of a future trade, or view unrealized short- and long-term capital gains. 

Although E*TRADE clients cannot maintain a trading journal directly on the platform, it does offer a notes functionality to keep track of trades and strategies.

Education

For those just getting started, E*TRADE offers articles, videos, classes, and a library of materials on financial topics. E*TRADE’s Knowledge Center focuses on new investors, long-term planning, and tax planning, as well as advanced topics like options and futures. E*TRADE facilitates a full calendar of events, including free live in-person events and online webinars, designed to help investors hone their skills and feel more confident in their investing decisions.

Investors have access to the full library on a range of financial topics and areas of interest. They can also access a range of platform demos to learn how to use the E*TRADE tools and platforms. The Knowledge Center is a free resource for all site visitors, regardless if they have an E*TRADE account or not. Users can even hone their skills and test strategies without committing real money using E*TRADE's Power E*TRADE platform for paper trading.

Customer Service 

  • E*TRADE offers a 24/7 phone line with access to brokers, as well as retirement specialists, financial consultants, active trader consultants, and product specialists. One drawback is the average wait time on hold for customer service, which is currently 11:05 minutes.
  • E*TRADE customers can chat with a live customer service representative 24/7, send an email, access FAQs, or use a comprehensive language search engine to find information on the website. The chat is available through the website as well as the mobile apps.
  • Qualified customers can speak with financial advisors in E*TRADE’s retail branches or speak with one over the phone if there are no branches in the area.
  • E*TRADE has over 30 physical branches in the U.S.

Security and Reliability

E*TRADE's security is up to industry standards:

  • Two-factor authentication is available on all E*TRADE platforms.
  • If using a mobile device, E*TRADE offers both fingerprint and face scan log in functionality.
  • E*TRADE clients will be covered under the Morgan Stanley excess of Securities Investor Protection Corporation (SIPC) supplemental insurance policy, which has an aggregate limit of $1 billion. This amount is above and beyond the required insurance by SIPC.
  • E*TRADE reports having no serious platform outages.
  • E*TRADE also reports having no significant data breaches.

Transparency 

E*TRADE’s pricing structure and fees are very clear and transparent. For example, the broker has a webpage dedicated to rates and pricing, highlighting costs associated with brokerage fees, margin trading and more. There have been no major regulatory actions brought against E*TRADE recently.

Our Verdict

E*TRADE remains a powerhouse brokerage firm. It is an industry leader in its mobile, web, and options trading platforms and continues to innovate each year. Its user experience, investing tools, educational resources, large selection funds, and innovative trading technology will be a good fit for equity and options traders. The integration of the OptionsHouse technology provided E*TRADE with a significant upgrade to its options analysis and trading capabilities in the Power E*TRADE platform, building E*TRADE's capabilities as an options trading platform to go along with the company’s existing strength in other areas. 

Regardless of the client's investing experience or style, E*TRADE is a reliable, full-service broker that sets the bar high for its competitors. Overall, E*TRADE provides a well-rounded offering that will satisfy the majority. It is a good pick for both beginning investors and experienced traders, who often have different needs and expectations, because the broker does a good job serving both markets adequately.

What Type of Account Should I Open at E*TRADE?

E*TRADE has an extensive offering when it comes to account types. E*TRADE customers can open all the frequently used accounts including:

Choosing the right account depends on the purpose of the portfolio. If it is a retirement portfolio, investors can choose between the common IRA types, as well as specialty ones for small business owners. If it is a regular investment account for growing money, however, then the regular brokerage account is the obvious choice. According to E*TRADE, the most popular accounts are the brokerage account, the robo-advisor account (Core Portfolios), a premium savings account, and the three common IRAs: traditional, Roth, and rollover.

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Methodology

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on its platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting thousands of data points that we weighed into our star-scoring system.

Read our full methodology.