E*TRADE is an online brokerage offering electronic trading platforms. E*TRADE is a top choice among self-directed investors and active traders, possibly due to low cost and slick trading platforms which make it an ideal choice for cost-conscious investors interested in learning how to navigate financial markets.
Why E*TRADE
E*TRADE stands out from other online brokers, here’s why:
- Ease of Use– E*TRADE platforms guide the user upon account creation, for example, new visitors to the etrade.com website are greeted with messages like “Where do I start? Four steps to getting into the market,” and “How do I invest? Tools to help you become inspired,” or “How do I place a trade? Step-by-Step guide to trading at E*TRADE.”
- Courses & Webinars – E*TRADE provides a series of online investing courses from Morningstar, with topics ranging from basic personal finance decisions to investing basics and strategies. Customers can also watch webinars that answer asset allocation questions, teach technical analysis, or explain different types of options strategies.
- Prebuilt Portfolios– E*TRADE offers prebuilt professionally built portfolios for a minimum of $500 for mutual funds (or $2,500 for exchange traded funds) that range from conservative, moderate, or aggressive strategies, depending on the individual’s risk tolerance.
- Core Portfolios– E*TRADE’s robo-advisor service called Core Portfolios gives investors actionable advice about building portfolios and financial planning. For an annual advisory fee of .30% per month, computer-based advisors work to create, manage, and adjust portfolios that match the individual’s personal financial goals and risk tolerance.
Things to note
Investing options on E*TRADE include:
- Stocks (No-Commission)
- Options (65 Cents Per Contract)
- Futures & Future Options
- Exchange Traded Funds (No-Commission)
- Bonds
- Certificates of Deposit
- 4000 + Mutual Funds
- E*TRADE acquired Chicago-based online broker
Fees:
- No minimum deposit to open an account
- No inactivity or annual fees
OptionsHouse in September 2016, vastly improving its options trading capabilities, these now include:
- Customizable Options Chains
- Profit and Loss Charts (Risk Graphs)
- The ability to trade simple or advanced strategies with one order entry tool
- Real-time Data, and a wide array of charts and indicators.
established brand will help position Morgan Stanley as a top player across all three channels: Financial Advisory,
Self-Directed, and Workplace”
James Gorman, Chairman and CEO of Morgan Stanley.
Morgan Stanley acquired E*TRADE on Feb 20, 2020 in a $13 billion deal. At the time of the acquisition, E*TRADE had more than 5 million customer accounts, $360 billion in assets, and processed 280,000 trades daily.
E*TRADE Platforms for Desktop & Mobile
- E*TRADE Web: a web-based trading portal that provides updated account information, free market data and quotes, market commentary, stock screeners, customizable watch lists, and the ability to trade simple and complex options strategies.
- E*TRADE Mobile: access account information, place trades, transfer money, as well as fetch quotes, research, and news.
- Power E*TRADE: designed for active traders, and leveraging the OptionsHouse technology, Power E*TRADE is the most advanced of the three trading platforms and includes more than 100 technical studies, customizable charts, watch lists, and chains, as well as advanced options analytics.
- Power E*TRADE Mobile App: designed for active traders on the move, with charts, quotes, news, options chains, and the ability to place simple or complex options trades, as well as trade futures, directly from smartphones or tablets.
- E*TRADE Pro: a desktop trading platform that includes account information, strategy screeners, charts, news, quotes, and the ability to backtest trading ideas.
- Ability to open traditional or Roth Individual Retirement Accounts (IRAs)
- Retirement planning options for small businesses, such as individual 401(k)s, profit-sharing plans, and SEP-IRAs
- The FDIC-insured E*TRADE bank provides customers with checking accounts, savings accounts, and lines of credit
- 24/7 customer service
E*TRADE Fact Sheet
- Founded: 1982
- First Online Trade: 1983
- Initial Public Offering: Aug. 16, 1996
- CEO: Mike Pizzi
- Employees: 4000
- Headquarters: Arlington, Virginia
- Retail Branches: 30
- Barron’s 2020 Review: E*TRADE – Voted #1 for Mobile Traders
- Investopedia 2020: E*TRADE – Best Broker for Ease of Trading 2020
- Investopedia 2020: E*TRADE- Best for Beginner Option Traders 2020
- Stockbrokers.com 2020: E*TRADE as #1 for Mobile, Web-based & Options Trading 2020
Founded by Bernard Newcomb and William Porter, E*TRADE began as a small startup called TradePlus in 1982. One year later, the company was the first to develop a process for individual investors to place a trade online, without the help of a human broker.
By 1991, as the broker started offering trading services on the America Online and Compuserve electronic networks, the company name was changed to E*TRADE Securities. By 1996, client accounts had increased to 73,000 and the broker processed 8,000 trades per day; E*TRADE became a public company, continuing to grow organically and through acquisitions, until being acquired by Morgan Stanley in early 2020.
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