TD Ameritrade 300

Is TradeStation a Scam? Is TradeStation a Safe and Legitimate Company? Is it FDIC Insured? TS BBB Rating for 2022



Is TradeStation Safe?


The online brokerage firm TradeStation Securities, Inc. is part of TradeStation Group, Inc., which is now owned by Monex Group, a Tokyo Stock Exchange-listed company that owns one of Japan's leading online brokerage firms (learn more in this Wikipedia article). Founded in 1982 and originally named Omega Research, TradeStation is best known for their analysis software and electronic trading platform.


Is TradeStation a Scam?


TradeStation offers a complete array of investment options such as stocks, bonds, ETFs, and mutual funds to its customers as well as options and futures. It's registered to do business in all 50 states plus the District of Columbia and is registered with the Securities and Exchange Commission (SEC) along with 14 other self-regulatory organizations.

In addition, TradeStation is a member of the Financial Industry Regulatory Authority (FINRA), a non-governmental corporation that acts as a self-regulatory organization for the securities industry. Since scam companies are generally fly-by-night businesses that come and go on a very short-term basis and in limited areas of the country, it's doubtful that TradeStation, with its long history and extensive membership in regulatory groups, would be a scam.


Is TradeStation a Safe and Legitimate Firm?


Along with the groups mentioned above, TradeStation is a member of the New York Stock Exchange and CME Group—the leading commodities and futures exchange owner. Membership in these groups gives a degree of guarantee that TradeStation operates in a legitimate manner with regard to handling all types of securities transactions.

TradeStation has also won numerous industry awards from groups such as Barron's broker survey and Investor's Business Daily. In particular, their trading platform has won multiple awards for best trading system for stocks and futures from the magazine Technical Analysis of Stocks & Commodities, a leading periodical for sophisticated traders.

An online search for complaints or problems about TradeStation being safe and legitimate found very little other than the occasional complaint or bad review. No discernible pattern was noticed of unsafe business practices or questions of legitimacy.

The takeaway here is that TradeStation is legitimate, enjoys a good reputation among a variety of expert industry sources, and is patronized by a sufficient number of customers to ensure at least a reasonably positive reputation within the investment community.


TradeStation Promotion


$150 cash bonus when you transfer funds into TradeStation.

Open Tradestation Account



Is TradeStation FDIC/SIPC Insured?


Since TradeStation is not a bank and does not offer investments such as Certificates of Deposit (CDs), it is not a member of the Federal Deposit Insurance Corporation (FDIC) and therefore not insured by them. The company is a member of the Securities Investor Protection Corporation (SIPC). That means investors' accounts are guaranteed up to $500,000 per account ($250,000 of that in cash) in the event of bankruptcy or failure. However, SIPC insurance does not guarantee any investor against loss of value of an investment in the event of a down market. The only guarantee is that the investor's cash is safe up to $250,000 and that the shares or bonds owned by the investor will remain in the investor's account, whatever the value of those investments may be.


Is TradeStation Free?


TradeStation is not free because it charges commissions to buy and sell securities. These prices are competitive with other brokerage firms and are a usual and customary cost of doing business in the investment world. This is actually a good thing since any company offering a product for free that other companies charge commissions for would be immediately suspected of hiding some fees or commissions deep in the fine print of their account agreements.


TradeStation BBB Rating and Complaints


TradeStation Securities standing with the Better Business Bureau (BBB) is perfect, with an A- rating. The company is not accredited by the BBB, which is not unusual for online brokerage firms and should not because for concern. In the past 3 years, 6 TradeStation complaints have been closed with the BBB. Here's the breakdown:

Advertising/Sales Issues - 1
Billing/Collection Issues - 1
Delivery Issues - 0
Problems with Product/Service - 4
Guarantee/Warranty issues - 0

The company has received no customer reviews from the BBB.

The takeaway here is that TradeStation's business operations have not raised any major red flags with the BBB.


TradeStation


Conclusion


TradeStation is a safe and legitimate online brokerage. As with all brokers, or any other business dealing with large amounts of customers' money, individual employees may behave unethically or even criminally, but that doesn't mean the company as a whole is corrupt or unsafe or a scam. Investors should always perform due diligence on any broker with which they may be interested in doing business and be sure to understand fully the terms of any account agreement and commissions and fees schedule before opening an account.


Open TradeStation Account


$150 cash bonus when you transfer funds into TradeStation.

Open Tradestation Account


About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.