50 Facts About E-Trade

Founding and History

E-Trade has been a game-changer in the financial industry since its inception. Let's dive into its rich history and evolution.

1. E-Trade was founded in 1982 by William R. Porter and Harold M. Friedman. It was one of the first online discount brokers, revolutionizing the way people invested in the stock market.
2. In 2020, E-Trade was acquired by Morgan Stanley, one of the largest financial services companies in the world. This acquisition has further solidified E-Trade's position in the market.
3. E-Trade is regulated by top-tier authorities such as the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), ensuring high levels of investor protection.
4. E-Trade currently employs more than 4,000 workers, providing comprehensive customer support and services.
5. Despite its online presence, E-Trade has 30 physical branch locations across the United States, offering a hybrid approach to financial services.

Trading Platforms and Tools

E-Trade offers a variety of platforms and tools designed to meet the needs of different types of investors.

6. E-Trade provides two primary trading platforms: E-Trade Web and Power E-Trade. Both platforms are free and offer a range of features tailored to different investor needs.
7. The Power E-Trade platform is designed for advanced traders, offering over 145 technical studies, drawing tools, and customizable options chain views. It also includes features like trading ladders and spectral analysis tools.
8. The E-Trade Web platform is more basic but still offers streaming quotes, charts, and market commentary. It includes tools for analyzing options trades and backtesting strategies.
9. E-Trade's mobile app is highly rated and allows users to trade stocks, bonds, ETFs, mutual funds, and multi-legged options. It also includes features like deposit checks, transferring money, and paying bills.
10. The Power E-Trade platform integrates Bloomberg TV, providing real-time financial news and analysis directly on the desktop.

Fees and Commissions

Understanding the fee structure is crucial for any investor. E-Trade offers competitive rates and various discounts.

11. E-Trade offers access to thousands of no-transaction-fee (NTF) mutual funds, making it easier for investors to diversify their portfolios without incurring additional fees.
12. E-Trade provides commission-free trading for stocks and ETFs, making it an attractive option for frequent traders.
13. While options trades are commission-free for the Custodial Account, there is a per-contract fee of $0.65 for standard options trading. However, active traders (those who trade 30 or more times per quarter) can enjoy a discounted fee of $0.50 per contract.
14. E-Trade charges a fee of $1.50 per contract for US index futures trading.
15. The fees for trading bonds vary, with U.S. Treasury bonds being free, while other bonds incur a secondary transaction fee ranging from $10 to $250.

Investment Options

E-Trade offers a wide range of investment options to cater to different investor preferences.

16. E-Trade does not currently offer fractional shares of stocks unless they are part of an automated investing program. This limits the ability of investors to buy stocks based on a dollar amount rather than the full share price.
17. E-Trade does not offer direct trading in cryptocurrencies but does provide investment options related to crypto, such as futures or ETFs. The company plans to expand its crypto offerings as regulatory environments evolve.
18. E-Trade allows customers to buy into Initial Public Offerings (IPOs) and offers over-the-counter (OTC) trading, though at higher prices than some competitors. Commissions on OTC trades start at $6.95 and can go down to $4.95 for frequent traders.

Customer Support and Educational Resources

E-Trade excels in customer support and offers a wealth of educational resources for investors.

19. E-Trade offers 24/7 customer support through phone service, ensuring that investors can get assistance at any time. Additionally, there are physical branch locations where customers can meet with representatives.
20. The platform provides a variety of educational tools, including personal finance tutorials, free market commentary from independent analysts, and monthly webinars. These resources help new investors learn the ropes and experienced investors refine their strategies.
21. E-Trade offers a range of account types, including core brokerage accounts, Custodial Accounts, Education Savings Accounts (ESAs), traditional bank accounts, managed portfolios for passive investors, and full suites of personal and small business retirement accounts.
22. Unlike some competitors, E-Trade pays interest on uninvested cash in accounts, providing an additional source of income for investors.
23. While E-Trade does not accept bank cards or electronic wallets for money transfers, it offers user-friendly deposit and withdrawal options through bank transfers. However, wire transfer withdrawals come with a high fee.

Account Management

Managing your account with E-Trade is straightforward, but there are some nuances to be aware of.

24. The account opening process is fully digital and requires no minimum deposit. However, account verification can be slow, which may delay the activation of the account.
25. The E-Trade mobile app is highly rated for its user-friendly interface, good search function, and variety of order types. It allows traders to access Bloomberg TV, research, and news while on the go.
26. The web trading platform is also user-friendly, offering clear fee reports, two-step login for enhanced security, and limited customizability for charts and workspace. It provides streaming market data, real-time quotes, live market commentary, analyst research, and stock screeners.
27. E-Trade offers a wide range of tradable securities, including stocks, bonds, ETFs, mutual funds, options, and futures. This variety caters to both beginner and advanced traders.
28. Unlike some other brokers, E-Trade does not charge annual or inactivity fees. This makes it an attractive option for long-term investors who may not trade frequently.

Additional Features

E-Trade offers several additional features that enhance the overall trading experience.

29. There is a $75 fee to fully or partially transfer assets out of an E-Trade account. This fee is higher than some competitors but reflects the comprehensive services offered by the platform.
30. E-Trade offers a volume-based discount on options contract fees. Active traders who trade 30 or more times per quarter can enjoy a reduced fee of $0.50 per contract, compared to the standard $0.65 per contract.
31. E-Trade provides access to over 6,000 no-transaction-fee mutual funds, making it one of the best platforms for mutual fund trading. However, trading mutual funds incurs a fee of $19.99 per trade.
32. The platform offers high-quality research tools such as trading ideas and strategy builders, which are particularly useful for advanced traders looking to refine their strategies.
33. E-Trade’s analysts regularly update a list of highlighted mutual funds called the All-Star Funds Report, featuring the top no-load funds and ETFs available on the platform.
34. In addition to brokerage services, E-Trade offers traditional bank accounts, including two checking accounts, managed portfolios for passive investors, and full suites of personal and small business retirement accounts.
35. E-Trade provides Custodial Accounts, which are designed for minors or incapacitated individuals. These accounts offer a secure way to manage investments for those who cannot manage them themselves.
36. The platform also offers Education Savings Accounts (ESAs), which are designed to help families save for education expenses while potentially reducing tax liabilities.
37. E-Trade offers a full suite of personal and small business retirement accounts, including IRAs, 401(k)s, and other retirement savings options. These accounts help investors plan for their future financially.

Advanced Trading Features

For those who want to take their trading to the next level, E-Trade offers several advanced features.

38. The Power E-Trade platform includes advanced trading features such as customizable options chain views, trading ladders, and interactive charts. These tools help advanced traders analyze and execute complex trading strategies.
39. The Power E-Trade platform offers more than 145 technical studies and drawing tools to help investors analyze trading action. These tools include overlay technical patterns on stock charts, showing risk-reward on options trades, and scanning for unusual stock activity.
40. The platform includes snapshot analysis, which provides a visual representation of the risk and reward of an options trade. It also offers spectral analysis tools that provide visual representations of potential options scenarios.
41. The Power E-Trade platform integrates Bloomberg TV, providing real-time financial news and analysis directly on the desktop. This feature is particularly useful for staying updated with market trends and news.
42. The layout on the E-Trade site and app is clean and easy to navigate, making it simple to make trades. The quick loading times also enhance the user experience.
43. Active traders who trade 30 or more times per quarter can enjoy a volume discount on options contracts, reducing the fee per contract from $0.65 to $0.50.

Security and Protection

E-Trade takes security seriously, offering robust measures to protect investors.

44. E-Trade operates under the regulatory oversight of top-tier authorities like the SEC and FINRA, ensuring a high level of investor protection. This includes robust security measures to safeguard transactions and accounts.
45. Unlike some competitors, E-Trade does not offer negative balance protection. This means that if an investor's account balance goes below zero due to trading losses, they will be liable for the shortfall.
46. While the web trading platform is user-friendly, it has limited customizability for charts and workspace. This may not be ideal for advanced traders who require more flexibility in their trading environment.
47. E-Trade charges a high fee for wire transfer withdrawals, which may deter some investors from using this method for withdrawing funds.
48. The account verification process can be slow, which may delay the activation of the account. This is particularly frustrating for new investors who want to start trading as soon as possible.

Overall Rating and Reputation

E-Trade has built a solid reputation over the years, reflected in its positive reviews and ratings.

49. E-Trade has received positive reviews from various sources, including a 4.3 rating from NerdWallet and a 4.5/5 rating from BrokerChooser. These ratings reflect the platform's strong educational resources, portfolio-building tools, and large mutual fund selection.
50. E-Trade is a comprehensive online brokerage platform that offers a wide range of investment options, advanced trading features, and robust educational resources. While it has its limitations, such as the absence of fractional shares and direct cryptocurrency trading, it remains a solid choice for both beginner and experienced investors.

E-Trade: A Solid Choice for Investors

E-Trade stands out as a comprehensive online brokerage platform. Founded in 1982, it has grown to offer a wide range of investment options, from stocks and ETFs to mutual funds and futures. The acquisition by Morgan Stanley in 2020 only strengthened its market position. With user-friendly platforms like E-Trade Web and Power E-Trade, along with a highly-rated mobile app, it caters to both beginners and advanced traders. The absence of annual or inactivity fees, plus commission-free trading for stocks and ETFs, makes it attractive. However, the lack of fractional shares and direct cryptocurrency trading are drawbacks. Despite these limitations, E-Trade's robust educational resources, high-quality research tools, and strong regulatory compliance make it a solid choice for investors looking to navigate the financial markets with confidence.