Are you interested in E*TRADE? Are you looking for some real reviews? Today, I am going to give my complete, no-punches-pulled opinion on this investment option. Some E*TRADE sales sites might not be happy with some of the things I’m about to say, and some E*TRADE haters aren’t going to like some of the positive things I’m going to mention about this platform. But there is one thing you can count on – that this review is going to give you the truth.
E*TRADE Short Review
As with any investment option, it has both positives and negatives. But in my opinion, the good definitely outweighs the bad.
They have a great toolbox of goodies that make investing easy. I’ve been around the block a time or two, and I have to say that E*TRADE has some of the best options-specific tools available on the market today. They come in handy when complex orders are at hand, and that’s just what they’re designed for. When it comes to investment technologies, it’s tools like these that bring investing to new heights.
As you will find with any investment tool, E*TRADE is not perfect. In fact, they are not designed for the small-time investor. Although it can be used effectively by anyone who makes a few trades per quarter, the fees would be higher than the average investment platform. If you make less than 150 trades per quarter, each one is going to cost you $9.99 a piece, which is a bit high compared to others in the industry. Betterment offers a cheaper alternative that would be more manageable for someone who doesn’t have a lot to play with. Instead of charging a flat fee, they charge a percentage for each trade, which will depend on the asset. The rates are anywhere from 0.15% to 0.35%, which isn’t that much at all.
For large traders, E*TRADE does offer some savings. If you make more than 150 trades per quarter, you will see a steep discount that will reduce the cost to $7.99 a trade. TradeKing only charges $4.95 a trade, even though their tools are not as comprehensive. Still, it might be worth taking a look at if you’re on a budget.
The bottom line is that E*TRADE is a great tool if it’s used by the right person. There is no one-size-fits-all option when it comes to finances – whether you’re investing, dealing with debt, or working with credit scores. Every financial position is unique. If you make quite a few trades in a quarter, this might be a great option for you. If not, then you could still benefit from E*TADE, but it’s up to you if you feel that the more advanced tools are worth the extra cost.
E*TRADE Long Review
For those of you who want a bit more of an intuitive review, here’s some in-depth information you’re going to want to know.
E*TRADE has a fee structure that seems to be priced in order to attract larger investors. They have two rates that are based on a person’s trade volume. This is where the bulk discount comes into play.
Stock trades start at $7.99 a piece, but if you read the fine print you’ll find that they will only be at this competitive rate if you make 150 or more trades per quarter. If not, you’re going to be charged $9.99 for every trade. You will also have to pay an extra $0.75 for every contract you sign, regardless of your volume.
Betterment and TradeKing are cheaper alternatives that might be better for the smaller investor. TradeKing charges $4.95 for every trade, which is considerably lower than E*TRADE, and Betterment charges a percentage based on the type of asset being traded.
E*TRADE also charges extra for broker-assisted trades. They charge $45.00 a piece for these kinds of transaction, along with any other associated fees. That is pretty good as far as the industry goes. So, if you’re thinking about broker-assisted options, exercises, or assignment, keep in mind that they charge an extra $19.00 for these services.
Now, let’s get into the margin rates. The truth is, they compare pretty well with other options. They will fall anywhere from 0.25% below base to 4.30% above base. As with most brokers, their margins are based on your debt balance. If it’s below $25,000, you will pay higher than ideal margin rates, which is 8.44%. If you have a high balance (at $25,000 or more), your margin rates will drop to below average, and you will pay only 3.89%. So, you can see that the pricing structure is designed for larger investors.
When it comes to investing, you know that there are always more fees to consider. In this case, you’re going to want to think about full transfer fees ($60), check request fees ($10), stock certificate fees ($75), outgoing wire transfer fees ($25), and paper statement fees ($2). Just about right for the industry.
Let’s Get Honest Here
At $9.99 a trade, there’s no one out there that’s going to tell you that E*TRADE’s fees aren’t at least somewhat competitive. And for what it’s worth, it’s a pretty good price. Still, there are cheaper alternatives that might be a better option for someone who is on a budget. Betterment has very cheap rates, even though they charge a percentage instead of a flat rate, and they have no minimum balance. So, you don’t need a lot to start out with. If a flat rate sounds better to you, TradeKing’s fees are much lower. This could provide more of a savings if money is a concern.
When it comes to competitive pricing for online traders, E*TRADE hits the mark – but just barely. The broker-assisted trades are pretty decent, but they’re more in the mid-line when it comes to competiveness. Still, they’re not the lowest fees you’ll find – not when you compare it to others on the market.
E*TRADE is a Technology Loving Finance Giant
Ever since computers were invented, they have been used in the investment industry. E*TRADE has taken investment technology to a whole new level. Most online investment tools offer very simple interfaces for placing orders. When you want to make a more complex order, things can become a little more difficult. That’s not the case with E*TRADE. Orders like spread, buy-write, butterfly, condor, iron-butterfly, or iron-condor aren’t as much of a hassle to place as they usually are.
Their portfolio and risk analyzers also make it easier to be more confident in your trades. These in-depth tools will analyze your entire portfolio to help you diversify – by stock type, sector, and world region. Once it has all the information it needs, the risk analyzer will give you “risk vs. reward” information in both text and chart forms. It will also keep track of your performance against market indices. You can use these tools to take a look at what what-if scenarios, and you can look at some simple stress tests to see what would happen in a “worst case scenario.”
When it comes to options research, E*TRADE has come out with one of the best tools out there. They give you the ability to create a unique strategy profile, and they will develop one that will account for investment amount, time frame, market volatility, market outlook, and target price. They also provide a good options analyzer, as well as an options screener and probability calculator.
If you like to trade on the go, E*TRADE has some good mobile apps. They are designed for the iPhone, iPad, Android, and even Blackberry. If you’d like to install the app, they will send you a text message with a clickable link. And it’s very simple to use.
What About E*TRADE Customer Service?
While I won’t say that they have the best of the best when it comes to telephone, e-mail, and mail support, it’s still pretty good. And they have a very unique type of support for clients when it comes to the online discount broker industry. They have live people in 25 branches across the United States. So, if you are lucky enough to live by one of these branches, they can help you in person!
Is E*TRADE Worthwhile for the Small Investor?
When you look at the fee structure, it’s easy to see that E*TRADE has designed their pricing around the bigger investor. So, is it really worth it for the little guy?
We all know that there are lower cost options. Betterment and TradeKing offer tremendous savings for the smaller investor, and both of them can be great options for someone who doesn’t have a lot to play with in the beginning. But when it comes to E*TRADE, you’re not necessarily investing on cost. Though you will pay more per trade, you will have the ability to use tools that will help your portfolio grow.
While E*TRADE won’t be the best option for all small-time investors, it will be a great option for some. The answer depends on how you will use their tools. Will you take the time to learn how to take advantage of the changes in the market, or are you more interested in having it done for you? If you’re more interested in having your investing choices made for you, and with very little research, you might want to consider using Motif Investing instead.
My Final Thoughts Of E*Trade
Larger investors will love this option. The pricing is going to be perfect, and as an investor with a good chunk in the market, you’ll know how to take advantage of the tools they have available. And you’ll most likely take the time to use them. So, if you have a lot to invest, this is going to be a great option for you.
If you don’t have a lot of money to throw into the market, this might not be the best option. If you’re investing on a small budget, it’s important to make sure you get the most bang for your buck. To do that with E*TRADE as a small investor, you will need to actively use the tools. And you should take the time to learn how the market moves. If you’re willing to do that, the rewards could be outstanding, even for the most modest investor.
E-Trade Reviewed by Modest Money on .