E*TRADE Review – Detailed Breakdown of E*TRADE 9 Comments
Are you interested in E*TRADE? Looking for some real reviews? Great! Because today, I am going to give my my complete, no punches pulled opinion on this investment option review. 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 great things I’m going to say here. However, one thing you can count on is that this review is going to give you the truth!
E*TRADE Short Review
As with any investment option, there are definitely some pros and cons here. In my opinion however, the pros definitely outweigh the cons for the right investor. So, what are they?
E*TRADE Pros – 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, E*TRADE has some of the best options-specific tools available on the market today! These tools definitely come in handy when complex orders are at hand and, rightfully so, that’s just what they were designed for. When it comes to investment technologies, it’s tools like these that bring investments to new heights.
E*TRADE Cons – They’re definitely not perfect as you’ll find goes with most investment tools. The truth is, I don’t think that E*TRADE was really designed for a small time investor. Although it can be used effectively by an investor that makes few trades per quarter, the fees would be quite a bit higher than the average investment platform. If you make less than 150 trades per quarter, each trade is going to cost $9.99 which, is a bit high for the industry. But, if you make at least 150 trades per quarter, you will see a steep discount reducing the cost to $7.99 per trade, the low end of average for the industry.
The Bottom Line – E*TRADE is a great financial tool if used by the right person. The bottom line is that there is no one size fits all option when it comes to finances whether you are investing, dealing with debt, working with credit scores, etc… every financial position is unique. If you make quite a few trades a quarter, this may definitely be a great option for you. If not, you can still benefit from E*TRADE but, it’s up to you to make the decision if the advanced tools are worth the added cost.
E*TRADE Long Review
For those of you who want a bit more of an intuitive review of E*TRADE, here’s some in-depth information you’re going to want to know!
E*TRADE has a fee structure that seems to be priced to attract larger investors. E*TRADE has 2 fee structures based on how much you will be trading, the bulk discount idea definitely at play here. Stock trades start out at $7.99 per trade however, if you read the fine print, you’ll find that they will only be at this very competitive cost if you make 150 trades per quarter or more. If not, you are going to be charged at a rate of $9.99 per trade for stock trades. Options contracts follow the same basic structure, $7.99 per trade if you trade 150 or more times per quarter or $9.99 per trade if you trade less. However, you will also pay $0.75 per contract no matter how much volume your account has.
Another fee you’re going to need to think about if you are making broker assisted trades is the broker fee. At E*TRADE, broker assisted orders are $45.00 per trade plus any other associated fees. That’s definitely pretty good as far as the industry goes. If you’re thinking about broker assisted options exercises or assignments, keep in mind that they charge an added $19.00 for them.
Now, let’s get into the margin rates. The truth is, they are general rates and can compare well with other options. The margin rates generally range from 0.25% below base and 4.30% above base. As with most brokers, their margins are based on your debt balance. If it’s $24,999.99 or less, you will pay higher than ideal margin rates of 8.44%. However, if you have a high balance, $25,000.00 or more, your margin rates will drop to below average and you will pay only 3.89%. So, again, the pricing structure is definitely designed for the 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). All just about right for the industry.
Lets Get Honest Here
At $9.99 per trade, there’s no one out there that’s going to tell you that the fees eTrade charges aren’t at least somewhat competitive. The truth is, for what it’s worth, that’s a pretty good price. But, let’s be honest, we all know that we can get a better price. When it comes to competitive pricing for online trades, eTrade hits the mark, but just barely! Now, the broker assist rates are pretty decent, more in the mid line when it comes to competitiveness, but they’re still not the lowest fees you’ll find.
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 new heights. Most online investment tools offer simple order placement tools. However, when you want to make a complex order, things can become a bit difficult on most platforms. That’s not the case when it comes to E*TRADE, they have mastered the technology of complex trade strategies! Orders like spread, buy-write, butterfly, condor, iron-butterfly or iron-condor are not the hassle they generally are to place.
E*TRADE also makes it easier to be more confident in your trades with portfolio and risk analyzers. This in-depth tool will analyze your entire portfolio looking for diversification by stock type, sector and world region. Once it’s got all the information it needs, the risk analyzer will give you risk vs. reward information in text and chart forms. It will also chart your performance against market indexes. You can use the tool to take a look at what if scenarios and take a look at some simple stress tests to see what would happen if the worst case scenario were to become reality.
When it comes to options research, E*Trade has come out with one of the best tools out there. The tool gives you the ability to create a unique strategy profile and develop a strategy taking investment amount, time frame, market volatility, market outlook and target price. They also provide a pretty cool options analyzer along with an options screener and and probability calculator.
If you like to trade on the go or as I like to sake, take advantage of the market in real time, E*Trade has some pretty good mobile apps for that as well. The E*Trade apps are designed for the Iphone, Ipad, blackberry and Android phones. If you’d like to install the app, they will send you a text message with a link to click and install. It’s all pretty simple to use.
What About E*TRADE Customer Service?
Finally, let’s talk a bit about customer service. Although, I wouldn’t say that they have the best of the best when it comes to telephone, email and mail support, it is pretty good. Another pretty neat thing is that they do 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 other, lower cost options. However, when it comes to E*TRADE, you’re not necessarily investing on cost. Although you will pay a couple extra dollars per trade as a small investor, you will have the ability to use tools that will help your portfolio to grow.
That being said, although E*TRADE is not going to be the best option for all small time investors, it will be a great option for some. The answer really depends on how you will use their tools. Will you take the time to learn how to take advantage of 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 with little research, you may want to consider an option like Motif Investing.
My Final Thoughts Of E*Trade
So, overall, how does E*Trade stack up?” you ask? Well, they are definitely a contender to watch in the industry. As far as larger investors, you’ll absolutely love this option. The pricing is going to be perfect, and as an investor with a good chunk in the market, you’ll not only know how to take advantage of the tools available to you, you’ll most likely take the time to use them. So, if you’ve got a lot to invest, this really is going to be a great option for you.
On the other hand, if you don’t have a bunch of money to throw into the market, or the fees associated with doing so, this may not be the best option. When investing on a small budget, it’s important to make sure that you get the most bang for every buck. To do that with E*Trade as a small investor, you’re going to need to actively use the tools and take the time to really 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 Clarkgym on .