Broker review

E*Trade      

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E-Trade Financial Corporation, commonly known as E*Trade, is a financial services company providing services for clients in online investing. The broker offers clients trading online via trading platforms. The company was founded in 1982 and has over the years acquired several firms, with OptionsHouse being the latest big acquisition. E*Trade has 3.6 million customers and processes around 220 000 trades per day. E*Trade is regulated by the SEC.

E*Trade provides two trading platforms, the E*Trade Pro (desktop based) and OptionsHouse (web based).

The flagship platform E*Trade Pro requires you conduct minimum 30 trades per quarter or have 250k USD in assets. You can also pay 99 USD per month in order to have access to the platform.

E*Trade Pro is a good platform for the active trader. It serves very well and is relatively easy to use. The platform has several interesting and relatively advanced features, such as some of the options trading aspects, but it doesn’t really reach up to the highly advanced platforms provided by for example Interactive Brokers.

The brokerage firm OptionsHouse was acquired by E*Trade in 2016. Part of the deal involved the platform now called OptionsHouse by E*Trade. It’s a web based platform focusing mainly on options trading, but you can also trade casual stock and futures trades. It is intuitively designed and relatively easy to use but I have seen better platforms for options trading.

Fees are not the cheapest but overall fair given the service provided. There are no hidden fees and E*Trade applies flat rate commissions. Add to this that active traders, minimum 30 trades per quarter, get a further reduction in commissions.

The biggest negative is the fact I see E*Trade as somehow in the middle of not being for the advanced trader, while at the same time being too advanced for the novice trader. With a few twists they could become an interesting player, so let’s see how they develop the new generation of their trading platforms.


General

Positive

  • Good trading platform
  • Clear fee structure
  • Very good options features and possibilities to analyze strategies
  • Good education material

Negative

  • The E*Trade Pro platform doesn’t really reach what I would like to see from a pro platform
  • Greedy to charge 99 USD per month for the Pro system unless you conduct 30 trades per quarter or have min 250k USD in deposits
  • The web based trading is good for options trading but I would not use it for cash or futures trading

Products

  • Equities
  • ETFs
  • Forex
  • Funds
  • Bonds
  • Options
  • Futures

Fee structure

Positive

  • Clear rates
  • Active traders get good discounts

Negative

  • On the expensive side given the trading platform provided

The Account and Regulation

Positive

  • SEC regulated

Negative

  • Greedy to charge 99 USD per month for the Pro system unless you conduct 30 trades per quarter or have min 250k USD in deposits

Trading Platforms

E*Trade Pro (advanced traders)

Positive

  • Good and reliable platform for the pro trader
  • Good charting experience
  • Advanced option trading features
  • Intuitive options strategy builder
  • Good strategy scanner tool

Negative

  • Can get easily too advanced for the novice trader
  • At times the system gets a bit confusing

OptionsHouse (web based platform)

Positive

  • Simple
  • Great system for options trading
  • Very good for novice traders wishing to trade more options
  • Very good and easy to use options strategy tools
  • Very easy to click and trade

Negative

  • Not sufficient for cash and futures trading
  • Charting could easily be made better
  • Doesn’t serve as stand alone system

Mobile Trading

Positive

  • Good and clear platform
  • User friendly
  • Streaming Bloomberg TV

Negative

  • Light on indicators unbless you have the E*Trade Pro platform

Research

Positive

  • Various fundamental research available
  • Analyst forecast and ratings available
  • External research available
  • Relevant screener functions

Negative

  • Light for the pro user
  • The external research is relatively poor
  • The research layout is badly designed

The E*Trade Pro

The E*Trade Pro is the flagship platform. The open screen is a classical view with news, watch lists, a few charts, orders etc displayed. The platform is customizable and gives you good possibilities to design your preferred layout.

The E*Trade Pro offers both the novice as well as the advanced trader a robust system that will serve most needs. The layout is clear but for some reason I don’t enjoy it as much as systems provided by other brokers such as Interactive Brokers, TD Ameritrade, Saxo Bank etc.

One of the shortcomings of this platform is the fact I find it not too user friendly for the novice/active trader. For this I would rather go for Saxo Bank as it offers a system more user friendly. The second issue is that E*Trade Pro doesn’t match advanced systems such as Interactive Brokers, so the system is good and robust but needs to be more focused on what it really wants to provide.

Below is an image of the start screen you can design personally.

The bottom part of the screen shows various news services which can all be linked to specific stocks you wish to follow. The left part of the screen shows the order management window which is rather clear, as well as the portfolio positions. Here you can change to view all trades, the overall portfolio etc. Overall the order and portfolio windows are relatively clear although I would make some of the important buttons more clear.

I like to have the order management system very straightforward and this application is doing an OK  job. It is not the quickest trading platform I have used in terms of being able to type the orders quickly, but it provides you with the necessary tools to trade.

One nice feature is the scrolling ticker of green and red squares at the top of a market depth window. This shows you graphically if the short term momentum is up or down ticks.

The quick trade windows are well designed, clear and user friendly. Good job!

The trading ladder feature is well designed and provides you with the necessary tools to trade quickly. Personally I like using trading ladder windows for most of my trading and this one is well made.

The platform provides very good options trading tools. Pulling out options quotes for an asset is easily done. Trading an option is also a smooth process, just click on the option and trade.

What is really good is the fact you can design your options strategy with the help of a predetermined drop down menu provided by the platform.

Below is a bull call spread in QQQ plotted (June 178/180) using the option analyzer tool. The strategy is designed by choosing a bullish view on QQQ and then specified with the mentioned strikes. The tool is very user friendly and gives a clear view of the position, risks, probabilities and pay off structures.

Great tool for the novice as well as the advanced trader. What takes several commands to do in for example Bloomberg (I personally use Bloomberg for most of my options and risk tools) is done much easier in the E*Trade Pro.

Another interesting feature is the options screener tool that gives you possibilities to screen for options based on several criterias.

The strategy optimizer is another great tool that compares several options positions in the same strategy group. The below image shows a bull call spread made up of various strikes.

The system will give you expected returns in percentage terms as well in absolute amounts.

After choosing your preferred strategy you can establish it easily by simply clicking the trade button. What used to take traders a lot of time to figure out is now easily provided to you by the strategy optimizer.

This is a great tool, especially for more novice traders.

Charting in E*Trade Pro is ok, but doesn’t match other good systems. You can choose among approximately 120 technical indicators, which is sufficient for most traders.

Drawing is easily performed and new indicators are added with a click but I still don’t get excited about the charting. The design could be better and more dynamic.

Below are two charts, one showing QQQ with a trend channel and one of Apple with some trend lines.

The system provides several options when it comes to looking for predefined watchlists. Below is largest % stocks gains in NYSE.

E*Trade Pro offers an interesting strategy scanner. You can either use the predefined criterias or custom make it yourself. Below we I chose bullish candlestick patterns and asked the system to do a search.

You will get a list of relevant stocks matching the criteria. This is a good scanner that filters well and will help you in finding possibly interesting sert ups.

OptionsHouse (Web based platform)

E*Trade provides a web based platform as well, the OptionsHouse. This is a very good platform when it comes to options trading. You can use it for casual cash and futures trading as well, but I think it lacks several features in order to be used as a stand alone system.

Pulling out an options window is easy and smooth. You have a clear view of strikes and prices. This is how an options window should look like.

With a double click on the preferred option you will find the option order window open up. This is a simple and smooth way to trade options.

OptionsHouse provides a strategy screener similar to the one you can find in the E*Trader Pro platform. Below is an image of a covered call position. The system outlines nicely the p/l chart as well as max profit/loss and other ratios of interest.

Charting in OptionsHouse is ok but it falls short of a robust system to usef or everyday charting. The layout is rather nice, but I would see it more of a charting package to use when travelling rather than using for everyday trading.


Mobile Trading

E*Trade delivers a good mobile application. Most features are straightforward and easy to use. Note that there are two platforms, the E*Trade mobile app and the OptionsHouse app.

The design differs some but the “normal” app has all the features you can find from both apps.

Personally I use the mobile trading apps to trade and possibly watch charts. E*Trade delivers this and much more. You can watch at Bloomberg TV, customize stock screeners and get research reports. Overall the app is robust and has a nice user experience but there is nothing “wow” about it.

Below is the typical starting screen. From the menu you can choose what you wish to do next.

The research section gives you possibilities to watch live Bloomberg TV, screen for stocks according to your rules, read educational material etc.

 

Charts are nicely designed, but there are very few indicators and it is negative you can only have access to all indicators if you have the log in to E*Trade Pro. Drawing is clean and easy.

 

Pulling up options quotes is a nice experience. The classical option trading window is intuitive and gives you relevant information instantly. Should you wish to trade, just double click and specify volume and price and you will be trading on the mobile app.

 


Research

Research provided by E*Trade has some interesting features, although I must say the entire research section feeld outdated from a design perspective. The research section is reached via the web. Simply fill in what name you want to analyze and the system will pull out relevant information. You will be provided with a tab menu and can choose from; snapshot, charts, news, options, analyst research, fundamentals, earnings, insider activity.

With a simple click you will obtain information regarding what price targets etc different analysts have for a specific name.

The platform will give you the basic information and key ratios.

The earnings summary tab gives a clear view of past earnings and share price reactions.

Another nice feature is the fact you can easily pull out information on insider activity.

Overall the research provided by E*Trade covers basic needs but the equity research space is highly competitive and providing deep insight when it comes to research should be left to investment banks.


Conclusion:

E*Trade is a good broker offering a robust system attractive for the novice trader as well as the more active trader. The broker provides two trading platforms, the E*Trade Pro and OptionsHouse.

The flagship platform E*Trade Pro requires you conduct minimum 30 trades per quarter or have 250k USD in assets. You can also pay 99 USD per month in order to have access to the platform. This platform will meet most traders needs, but I would have liked to have an even more advanced platform for the skilled traders.

OptionsHouse is the web based platform that offers excellent options trading features. You can also trade equities and futures although the system doesn’t fill all needs as a stand alone system. It is intuitively designed and relatively easy to use.

Fees are not cheap but overall fair given the service provided. E*Trade applies flat rate commissions and give a discount for active traders.

The biggest negative is the fact I see E*Trade as a roker that comes in the middle of servicing the novice and the advanced trader. WIth the acquisition of OptionsHouse the system has been further developed and I see a bright future for the new platforms that will eventually be released.


Commissions:

E*Trade charges 6.95 USD per stock trade and 6.95 USD + 0.75 USD per options contract. Active traders get further reductions of fees provided you conduct a minimum of 30 trades per quarter, under this term the active trader pays 4.95 USD per stock trade and 4.95 + 0.50 USd per options trade.

For full pricing of all fees visit the commissions link.

 

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