Etrade is perhaps the most well known of all the discount online brokerages, though it is no longer even close to the largest. In the past they have been plagued by support and order execution issues along with bad user interfaces. Are they worthy of another look? Read on to find out.
There are really two Etrade interfaces, one for ordinary Joes and their Power Etrade interface for active traders. Their ordinary site is quite plain and difficult to navigate in comparison to their competitors. The site looks like it hasn’t changed a line since 1998.
Their Power Etrade interface is very slick. You can bring up multiple visible windows with charts, news, and real-time level II Nasdaq quotes.
Power Etrade is by far the most powerful interface available of all discount online brokerages. Unfortunately to qualify for Power Etrade you must make 30 trades per quarter. At that point you’re dangerously close to day trading and may be better serviced by brokers that cater to day traders such as DTN.IQ.
It’s pretty much all or nothing here. Either you make 30 trades per quarter and you get the best or you make fewer than 30 and you get crapped on.
Order execution at Etrade is surprisingly good. I have found their order placement to be quick and reliable. They are tops among the discount brokers in this category.
Equity Trade Pricing:
Etrade’s pricing scheme is highly staggered based upon the number of trades you make in a quarter. If make fewer than 30 trades per month then you will pay $12.99 per trade. On the other end of the spectrum, those making a whopping 1500 trades per quarter will pay just $6.99.Others will pay some amount between those two figures. Overall this will be more expensive than Ameritrade and you’ll have to make 1500 trades just to save a penny on Scottrade.
Etrade is a fairly large brokerage so there’s really no excuse for their lousy short selling inventory. On multiple occasions I have been unable to short stocks on Etrade that were available on Ameritrade and Scottrade.
Etrade has a decent options interface and passable execution. Their fees are basically the same as you pay for an equity trade plus an additional amount per contract. Most people will pay $12.99 + $1.25 per contract.
Etrade’s service is a joke that gets funnier by the year. They still have awful hold times on the phone and it’s hard to reach them by email. They are probably the worst in the business in this category.
If you do not maintain a balance of $10,000 then you’re going to be looking over your shoulder every quarter for the sinister inactivity fee. They are fairly easy to avoid at Etrade by just making a trade every quarter, but why worry about it when Scottrade lets you be inactive for a decade without any fee?
I have very little good to say about Etrade. Their fees are higher than average and their product as a whole is worse than average. The sole shining star in this run down brokerage is their Power Etrade app, but to get it you have to be a semi-active trader. Etrade can raise their rating with me by lowering the trade requirement to use Power Etrade, say to 15 trades per quarter.
OVERALL RATING: 2/5