PROS / E*TRADE's options trading tool is great for beginners placing basic trades and experienced traders working with complex orders.
CONS / The fee for an option exercise or assignment is more than with many other services.
VERDICT / This online platform is a good choice if you are a beginning or advanced trader.
The E*TRADE online platform comes with convenient and easy-to-use tools to help you watch, trade and monitor stocks and the overall performance of your portfolio. This online stock trader provides mobile trading apps for more devices than with most brokers, and the mobile apps have impressive features that few other services offer. E*TRADE's fees are average for the online options trading industry, and local branches allow for personal interactions where available.
With E*TRADE, you can invest in stocks, ETFs, mutual funds, bonds, futures and forex in addition to options. With stock options trading, you pay the standard $6.95 trade fee plus $0.75 per option contract. That $6.95 fee drops to $4.95 and the options contract fee drops to $0.50 when you make more than 30 trades per quarter, making E*TRADE a good choice for active options trading. The per-contract fee can be more important to options traders than the base fee, so the lower fee for active traders can make quite a bit of difference. The fee for an exercise or assignment is $19.99, which is one of the higher amounts we saw for these fees, but the $25 broker-assisted fee is average.
For margin accounts, you must maintain a balance of $500, which is lower than average. The interest rate is calculated from the base rate established by E*TRADE, which is subject to change. This platform provides some of the best options-specific order tools we have seen. Though most services provide easy-to-use basic order placement tools, E*TRADE's tools make complex order placement easy. With the option trade tool that includes preprogrammed option strategies, you can easily place basic, spread, buy-write, butterfly and condor orders. You can also easily monitor your options positions, orders and alerts.
E*TRADE provides portfolio and risk analyzers. The portfolio-analyzer tool checks for portfolio diversification by sector, style, stock type and world region. The risk analyzer evaluates your risk and rewards, charts your performance against market indexes, runs what-if scenarios and performs stress tests of worst-case scenarios.
In terms of options research, you can create your own strategy profile by target price; investment amount; time frame; volatility; and market outlook, such as bullish, bearish, neutral or volatile. E*TRADE also provides an options analyzer, a probability calculator and an options screener. The mobile trading apps do everything you'd expect, allowing you to keep track of your watchlists, monitor stocks, trade options and keep track of your positions. Further, it has some nice additional features. With check depositing, you can take a picture of a check and directly deposit it into your investment accounts. There are local branches in 17 states where you can get face-to-face help, or you can contact 24/7 customer support via telephone, live chat and email. The website has dozens of video tutorials, online educational courses, live webinars, and general education about investing and trading.
This broker's options trading platform and tools are a great choice. The preprogramed strategies allow you to make trade decisions based on your market approach. You can create your watchlists and order basic or complex orders. The fees for trading are standard, and with all the excellent features, E*TRADE is a good choice for options trading.