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TradeStation Review


TradeStation Commissions, Fees, and Minimum Deposit


InvestmentsCommissions
Stocks and ETFs flat-rate plan$5 ($4 for IRA)
Stocks and ETFs per-share plan $0.01 per share first 500 shares, $0.006 per share after that; $1.00 minimum per trade
Options per trade plan $5 + $0.50 per contract ($4 + $0.30 per contract for IRA)
Options per contract plan $1.00, no base or ticket charge, market or limit orders
Futures from $1.20 (1 to 300 monthly contracts) to $0.25 (20,000+ monthly contracts) per side, per contract + exchange, regulatory & overnight fees
Mutual funds $14.95
Bonds $14.95 + $5 per bond
Forexcommission-free with tight spreads and fractional pips

Investments stocks, options, mutual funds, bonds, futures, forex, ETFs
Tradestation minimum deposit to open account $500 for cash account, and $2,000 for margin account
FeesTradestation fees
Promotion linkTradestation promotions


Our TradeStation review begins with an examination of broker's pricing. Recent changes in the firm's commission schedule have made the broker very competitive. Stock and ETF trades inside of a flat-fee account are now just $5. Option contracts are an extra 50 cents.

In a per-share account, equity transactions cost one penny per share with a reduced rate of 0.6¢ after the first 500 shares in a single trade. There is a $1 minimum per trade under this pricing schedule.

There is also an unbundled pricing schedule for high-volume traders. Under this plan, TradeStation charges just 1¢ per share for accounts that place up to 100,000 trades per month, with a per trade minimum of $1. The rate gradually decreases to 0.2¢ for a volume of over 5 million monthly shares, and the minimum drops to just 50 cents per trade.

Fixed-income transactions are $5 per bond, with a $14.95 minimum. Mutual funds also cost $14.95 per trade. Penny stocks have no surcharges; although TradeStation does charge for real-time OTC data.

A brokerage account does have a $50 annual fee, which can be waived with a $2,000 balance or 5 trades per year. The broker does not require any minimum deposit to open an account.


TradeStation New Account Setup


Opening a new investment account at TradeStation (member of SIPC) is more cumbersome and time consuming compared to many other on-line discount brokers. The process begins with promotion offer: Get $5 per trade stock and ETF commissions. $4 per trade for IRAs. In the top-right corner, clicking on 'open an account' produces a new page where vital information can be entered. If you've talked to a sales rep over the phone, you're supposed to select the person's name in the drop-down menu labeled 'sales representative'.

The on-line application will ask a long series of questions about your investment experience and plans for the trading account. Either a cash or margin account is available. Futures and options trading can be added during the account opening process. If you selected a sales associate, that representative will contact you by phone or e-mail to finish the account opening process once you submit the application.

The company has an annoying policy of requiring you to transfer funds into the account before you can login. Even worse, ACH service is not available by default. The initial choices are to wire funds into the new account or mail in a check. If you want to make the first deposit via ACH, you must call TradeStation to request the service. You will be e-mailed a pdf document where you can submit the external bank account's routing and account numbers along with a voided check or deposit slip. This process is much more cumbersome than adding a bank account at TD Ameritrade, where an external account can quickly be added with an on-line form.


Mutual Funds


Once you’re finally inside, you can see what security research tools the broker has. Unfortunately, there is no mutual fund screener, and the company was not able to tell us how many funds it offers. The broker, however, provides funds from 79 families which means there are a lot of them. Some of these families include Allianz, Blackrock, Franklin Templeton, Janus, and Vanguard.

TradeStation does not offer no-transaction-fee funds, although some of the broker’s funds have no loads. The $14.95 mutual fund transaction fee is applied to both purchases and sales.

While all U.S.-listed exchange-traded funds can be bought and sold at TradeStation, the brokerage house does not offer any that are commission free.


IRA's


Besides regular taxable investment accounts, TradeStation also offers Individual Retirement Accounts. These come in either Traditional, Roth, SEP, or SIMPLE varieties. The company charges a $35 annual fee for an IRA, and closing one costs $50.

Depositing $25,000 will eliminate both the annual IRA fee and termination fee. It will also create a reduced commission schedule. Equity trades under this plan cost just $4, and options are $4 plus 30¢ per contract. As with taxable accounts, a TradeStation retirement account now has no software fees if it is setup for per-share pricing.

Futures can be traded in an IRA with the broker. The commission is a very low 65 cents per side. All of the brokers advanced trading tools are available to IRA customers. These technologies include the following:


TradeStation Website/Trading Platform/Tools


Website

Limited information is on the TradeStation website. It is used primarily for account functions such as updating usernames and passwords and downloading documents. Subscriptions to market data services can be changed here as well. The broker’s advanced desktop trading platform can be downloaded from the website, and funds can be transferred. The website also has an internal messaging system and an on-line chat feature. It lacks a chat bot, which the TD Ameritrade site does have.


TradeStation Review: Website


Account information, such as balances, transaction history, positions, and statements can be accessed from the site as well. Some data can be downloaded in Excel or Word format. The broker’s website hosts a discussion forum and wiki where traders can connect with each other and discuss trading ideas. Videos are also available that cover a range of investment topics.


Browser-based Platform

There are two login choices on the broker's main page: client center, which is the website, and web trading. Clicking on web trading will produce a simple trading platform in a separate browser window.


TradeStation Review: Platform


There are two choices for web trading—live and simulated. Both of them have the same tools and features. The simulated version is a paper trading platform that provides $1,000,000 of a fake currency. This is a good place to practice the software and place mock trades to learn how to submit complex orders. These include OCO (order cancels other), OSO (order sends order), and other advanced orders.

Charting is available on the platform with several technical studies, including Bollinger Bands, Money Flow, and RSI. A few drawing tools and chart styles are available. Unfortunately, there is no function to compare a stock’s price action to an index or another security. A chart an be displayed the width of the monitor.

The trading environment can be slightly customized. There are light and dark themes, multiple layouts, and order entry settings.


Advanced Trading Platform

A much more advanced platform is available as a desktop program. It is downloaded from the website. After installing it, you have to login again, as the program has its own login window. At the login window, either the regular version or a paper-trading mode can be selected.

Not just stocks and options, but also futures can be traded with the desktop software. The order-entry bar is located at the top of the platform, and it can be used to submit a wide range of order types. These include entry orders along with exit strategies. For example, you could place an entry order with OCO breakout/fade buy with an exit bracket of two limits and one stop level.


TradeStation Trading Review


On the left-hand side is a 'TradingApps' tab. Clicking on it produces a selection of icons. Many different windows can be added to the platform. These include charting, market depth, a dealing window, and an option scanner.

A chart can be displayed the width of the monitor, and almost full screen. There are several drawing tools that aren't available on the other platform. These include Gann Fan, Regression Channel, arc, and text. Over 100 technical studies are available. You can add a study to a graph by right-clicking on the chart and selecting "Insert Analysis Technique..." from the drop-down menu.


Mobile Trading

TradeStation also offers its clients a mobile app. It is compatible with Apple and Android devices, including both phones and tablets. The platform displays balances, positions, orders, and a hotlist, which shows the day's biggest movers. Financial news articles are also available.

Alerts can be set on the mobile platform based on a variety of stock moves, such as open price being at, above, or below a certain level. Also available are volume alerts, and net percent change.

Sadly missing from the TradeStation app is live streaming of financial news. There is also no mobile check deposit, which many brokers today do have.

TradeStation Review: Mobile


TradeStation Review: Pros


  • Very low commissions on all investment products
  • Great direct-access platform
  • Best charting package
  • Trading modeling functionality
  • Rich selection of investment products
  • Active online trader community
  • Virtual trading (practice account)


TradeStation Review: Cons


  • No mutual funds screener
  • Fees for market data. TradeStation still charges for many data packages, including Level II quotes, which are free at TD Ameritrade
  • $35 annual IRA fee for accounts under $25,000
  • $50 annual fee if client makes less than 5 trades and average account balance is less than $2,000
  • Direct routing fee of $0.004 per share applies. Orders greater than 10,000 shares will be charged $0.0005/share for all shares in excess of 10,000 in the same order.


Promotion



Active-duty soldiers in the U.S. military receive commission-free trading on securities and options plus reduced commissions ($1.05 rebate) on futures. Veterans are eligible for discounted pricing on equity transactions ($1 off), option trades (20¢ discount), and futures transactions (85¢ off).

TradeStation customers who aren't associated with the military can deposit half a million dollars and earn interest at 40 basis points per year. New customers can earn the same 0.40% by depositing a million dollars or more. In either case, the funds must be moved from an external financial account.


Recommendation


TradeStation would be a good broker for active stock and option traders who place orders for thousands of shares per month or more. The broker's pricing schedule and trading technology are both designed for professional or highly experienced investors.

Traders interested in futures will enjoy the ability to trade contracts, and TradeStation's simulated trading service also offers the opportunity to practice trading them.

Fund traders can easily find better brokerage houses. TD Ameritrade, for example, offers over 2,300 products with no load and no transaction fee. And the broker offers more than 100 ETF's with zero commissions.

Although TradeStation offers fixed-income securities, the broker does not seem like an ideal choice for bond traders. Other firms, like Etrade, offer much better fees and learning materials.


TradeStation Review Recap


TradeStation Securities offers three commission plans for stocks and ETFs: pay-per-share, flat-rate, and unbundled. Flat-rate commissions are lower than the average in the industry - $5 per stock and ETF trade ($4 for IRAs). Pay-per-share commission plan is even cheaper: first 500 shares are $0.01 per share, $0.006 per share thereafter, with $1 minimum per trade. Unbundled plan is used by professional traders.

TradeStation is known for offering one of the best trading platforms among online brokers with powerful strategy creation, useful testing tools, and custom-built analytics. The firm is targeting very active investors (daytraders), and it is most popular among futures traders because of great trading and analysis software and low futures commissions.

Barron's magazine gave TradeStation the highest star rating for both "Best for Frequent Traders" and "Best for International Traders" categories. The firm also received top ratings in six major categories in Technical Analysis of Stocks and Commodities (TASC) Readers Choice Awards. TASC readers voted TradeStation "Best Trading System for Stocks" and "Best Trading System for Futures" for the eleventh consecutive year. TradeStation also won "Best Institutional Platform" and "Best Professional Platform" for the thirteenth year in a row as well as "Best for Real-Time Data" for the sixth time.

In 2017 we rated TradeStation "Best for Futures Trading" and "Best for International Investors" for the sixth year in a row. We also included it into our list of recommended brokers for options trading.

For beginners in investing or trading the firm's powerful trading platform will have a steep learning curve, and they probably should look elsewhere.

In summary, we recommend TradeStation for institutional investors as well as for active stocks, ETFs, options, and futures traders.


TradeStation Promotion




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TradeStation reviewed by Brokerage-Review.com on . Rating: 4.5



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