Is TradeStation Safe?
TradeStation started as a product made by Omega Research, a company started by brothers Bill and Ralph Cruz in 1981. In 1991, they made software that let traders automate and code their own strategies, and they called it TradeStation.
In 1994, Omega Research worked with Dow Jones Telerate to offer TradeStation to big clients around the world. The company became TradeStation in 1991 and later became a full-service online brokerage in 2001. In 2011, Japan’s Monex Group bought TradeStation.
TradeStation is known for its tools that let users test their trading strategies. It also offers direct market access and strong charting features. With its long history and good reputation among active traders since the 1980s, TradeStation is seen as a safe and reliable company.
Is TradeStation a Scam?
TradeStation offers stocks, bonds, mutual funds, ETFs, options, and futures, but you can’t trade commodities.
TradeStation has been registered with the SEC since 1996 and is a member of FINRA (Financial Industry Regulatory Authority). With a worldwide presence and strong reputation, it is very unlikely that TradeStation is involved in any scams.
Is TradeStation a Legitimate Firm?
TradeStation is registered as a broker-dealer and investment adviser. This means it can give investment advice and clear its own trades.
TradeStation operates in 13 business types, as shown below.
TradeStation works with WedBush Securities to clear futures and futures options for its clients.
TradeStation is allowed to do business in all 52 states and has a division called TradeStation International, which lets it serve clients in other countries too. The graphic below shows more details.
TradeStation has not been suspended by any regulator and is registered with 11 self-regulatory groups.
Is TradeStation FDIC/SIPC Insured?
TradeStation is not a bank, so it doesn’t have FDIC insurance. But it is a member of SIPC (Securities Investor Protection Corporation), which protects clients up to $500,000 ($250,000 in cash) if the company goes out of business. This helps traders and investors know their funds are protected.
Is TradeStation Free?
TradeStation offers commission-free trading for stocks and options to compete with other brokers. However, it charges $0.60 for each options contract.
TradeStation Complaints
TradeStation Securities is not accredited by the Better Business Bureau (BBB).
Investopedia gave TradeStation 4.5 out of 5 stars for its reliability, strong charting, back-testing, and automated technology.
The review also notes the TradingApp Store, which adds extra features, and mentions the platform’s 99.9999% uptime, which means it is very reliable during trading hours.
Negative reviews mention the lack of fractional shares, a $2,000 minimum to open an account, and some account fees: a $50 inactivity fee if there’s no trading in a year, a $35 yearly IRA fee, a $50 IRA closing fee, and a $125 fee for moving an account to another broker.
TradeStation Allegations and Fines
TradeStation has 25 disclosures on FINRA Broker Check, going back to 2003. Some were for small mistakes, while others were more serious.
In 2005, TradeStation paid $175,000 for breaking Pennsylvania’s Unfair Trade Practices and Consumer Protection Law, churning (excessive trading), and not using fair asset allocation.
Churning is when a broker trades too much just to earn more commissions, not to help the client.
In 2007, TradeStation paid $750,000 to FINRA for not reporting 23.5 million orders on its platform for five years.
In 2008, TradeStation paid $70,000 for not reporting short interest positions to FINRA.
TradeStation has also been fined for not finding shares they promised to a client who was short selling.
In 2011, they paid $200,000 for not monitoring accounts for suspicious activity.
Is TradeStation Safe Conclusion
With its long history, SEC registration, FINRA and SIPC memberships, and partnership with WedBush Securities, TradeStation is a safe and legitimate company.
While TradeStation has had some allegations and fines, it’s not clear if these were big company issues or just problems with certain people. Even with 25 disclosures over 20 years, most customers are happy, and the company still has a good reputation in the industry.
Now that we know TradeStation is safe and legitimate, let’s look at what it offers.
Investment Lineup
For both regular and retirement trading, TradeStation only offers self-directed accounts. There is no advice or financial planning. The account types you can open include:
- Trust
- Individual
- Joint
- Corporation
- IRA
- Limited partnership
- LLC
No matter which account you choose, you’ll get access to a wide range of investments. These are:
- Stocks
- Funds (closed-end, mutual, and ETFs)
- Options
- Futures and options on futures
- Bonds
TradeStation accepts applications from people in many countries, not just the U.S. They get to trade the same set of investments listed above. In addition to U.S. markets, TradeStation partners with Interactive Brokers to offer access to foreign exchanges (and more assets like forex) for both Americans and non-Americans.
Stocks and other securities (but not everything) held at TradeStation are protected by SIPC, up to $500,000 per account. TradeStation also has extra SIPC insurance through Lloyd’s of London for up to $24.5 million per customer, and $300 million overall.
Minimums and Fees
TradeStation has two sets of prices: one for U.S. residents, and one for people living elsewhere. U.S. residents pay nothing for online trades of stocks and ETFs, but there are some important details:
- The stock price must be above $1
- $25 fee for trades done by a broker
- 0.5¢ per share for shares over 10,000 in a trade and for direct-routed orders
Futures and options on futures cost $1.50 per contract, per side, and options are $0.60 each. Treasury trades are $50.
People outside the U.S. pay the same for most trades, but stocks, ETFs, and options come with a $5 base fee. There is no minimum deposit to open an account, but you must fund the account to use some trading platforms, which are explained below.
TradeStation charges a $10 per month inactivity fee, unless you keep at least $5,000 in your account or make at least 10 trades every 90 days. There’s also a $35 yearly IRA fee.
Basic real-time data for stocks, futures, and options is free. Other data plans may cost from $0 up to $131 per month, depending on what you choose.
Margin Trading
TradeStation lets you open a margin account if you want to trade with borrowed money. You can also open a cash account. Margin accounts allow you to use leverage. Day traders can get up to 4:1 leverage on many stocks for both buying and selling short, but some stocks have stricter rules. You can find these on TradeStation’s website under the green symbol list.
There are two levels of margin rates at TradeStation. If you borrow less than $50,000, the cost is 12.5% per year. If you borrow more than that but less than $500,000, the rate is 11.5%. For more than $500,000, the rate can be negotiated.
Website
TradeStation’s website can be hard to use. The Accounts tab lets you see balances, gain/loss, positions, and more.
The website doesn’t have research or trading tools directly. To trade, click the blue button in the top-right corner. There are three platforms there: securities, and futures options. You need the right account for each.
The securities platform can be used with real or demo money. Both modes offer:
- Vertical price ladder for fast trades
- Horizontal ticket for advanced trades
- Full-screen charts with lots of tools
- Options window with many strategies
- News from Benzinga
Mobile App
The TradeStation mobile app was recently updated. It has a new look but the same tools. There’s no more horizontal charting. The app includes the options, news, and ladder windows from the website on each security’s page. At the top, you can add an asset to your watchlist or set alerts.
The order ticket on the app has the same advanced order types as the website, including:
- Bracket orders
- Trailing stop
- Limit
- OCO (order cancels other)
- OSO (order sends other)
Upcoming earnings reports show up under the Events tab on the Markets page. The app doesn’t support mobile check deposit or live video news.
Desktop Program
For the best trading features, use TradeStation 10, the company’s main software for active traders.
The software has built-in layouts called workspaces. Some examples are:
- Futures Trader
- Market Scanner
- Find a Trade Idea
- Day Trader
You can change layouts to fit your needs. You can have multiple charts or one chart full screen. Charts come with many tools for technical analysis.
The Apps tab at the top left has add-ons that make TradeStation 10 a professional platform. Some examples:
- Intraday short locate
- TSAlgos
- OptionStation Pro
- Walk-Forward Optimizer
Day and Swing Trading
PDT Rule: To day trade stocks, you must keep at least $25,000.01 in your account. This rule does not apply to futures accounts.
Level II quotes: These are available on TradeStation 10.
Shorting: You can short stocks and futures at TradeStation. The software has buttons to sell short. The website lists which stocks are easy to borrow and which are restricted. Both lists are under the green symbol-lists link.
Direct-access routing: You can choose how your orders are routed, but some choices have extra fees.
Routing fees and rebates: TradeStation no longer pays maker-taker rebates for stock trades.
Extended Hours: TradeStation clients can trade stocks from 8 a.m. to 8 p.m. Futures and cryptocurrencies can be traded for more hours.
Banking Features
A major weakness for TradeStation is that it doesn’t have any banking tools. There are no checking accounts or hybrid accounts. You can move money using ACH or wire transfer with an easy tool on the website.
Customer Support
For customer support, go to the Support tab on the website. You’ll find phone numbers for different departments (like futures or stocks) and an email form. Trading desks are open when the markets are open, so the futures desk is open 24/7, and the stocks desk is open during weekdays.
For general account help, there is a service department open Monday to Friday from 8 a.m. to 5 p.m. Florida time. The website also has a chat feature during these hours.
Other Services
Initial Public Offerings: Offered through ClickIPO.
Fractional-share Trading: Not available.
DRIP Service: Not available.
Individual Retirement Accounts: TradeStation offers IRAs. There are Roth, Traditional, SIMPLE, Rollover, and SEP IRAs, including futures IRAs (which have high fees). Securities IRAs have a $35 yearly fee and a $50 closing fee.
Periodic Mutual Fund Purchases: Not possible.
Best Day Trading Brokers
Our Recommendations
Mutual Fund Investors: TradeStation does not have a search tool for mutual funds, but you can trade them online (with a $14.95 fee). We recommend Firstrade for easier searching and no fees.
Beginners: TradeStation is made for experienced traders. Beginners should try Charles Schwab.
Active Stock and ETF Trading: TradeStation is great for frequent stock trading, especially with its desktop platform.
Long-Term Investors and Retirement Savers: TradeStation does have IRAs and lifecycle mutual funds, but not much else for long-term planning. Charles Schwab offers more, including financial advisors and planning tools.
Small Accounts: Because of the inactivity fee, we don’t recommend TradeStation for small investors. Robinhood has no such fee.
Tradestation Review Summary
TradeStation is strong in some areas, but has weaknesses in others. Active traders can benefit the most from this broker.
Updated on 6/20/2025.
Daniel Colantonio is a writer and entrepreneur from Long Island, New York. He has an IT and real estate background and he enjoys traveling, exercising and spending time with his family in his free time.
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