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ETRADE vs Robinhood


2021 Robinhood or ETRADE - which discount broker is better? Compare IRA/Roth accounts, online stock trading fees, and mutual funds offerings.




Robinhood vs ETRADE: The Challenge


Robinhood was once regarded as the best value in brokerage services. But today, other investment firms, including E*Trade, have lowered their equity commissions to $0. So who is the better value now? Here’s the answer.


Categories


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Etrade
Robinhood
Firstrade


Cost


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Etrade $0 $19.95 $0.65 per contract $0 $0
Robinhood $0 na $0 per contract $0 na
Firstrade $0 $0 $0 per contract $0 $0


Promotions


Etrade: Get zero commission on stock and ETF trades.

Robinhood: Get one FREE stock when you open an account.

Firstrade: Get 2 FREE stocks and $0 commission in ALL trades!



First Category: Products Available for Trading


With a brokerage account at E*Trade, you can buy and sell a wide range of assets. They include stocks, options, bonds, mutual funds, closed-end funds, ETFs, and futures contracts.

Robinhood removes bonds, mutual funds, and futures from the picture, and replaces them with cryptocurrencies.

Winner: E*Trade


Second Category: Investment Education


Before putting your life savings on the line, you may want to have some idea of what you’re actually doing. Both firms in this survey provide their customers with learning materials, although they do differ dramatically.

On Robinhood’s site, there are help and learning centers that divide answers to common questions into categories. Topics include cash management, how to pick investments, and managing volatility. Sizes range from short to extensive. Examples include:

- What is a Margin Call?
- Common Tax Questions
- What is Pre-Foreclosure?

On E*Trade’s site, we found articles covering a wide swath of the investment landscape. There are resources on margin, futures, retirement planning, taxation, and the company’s software. Examples of short articles (some with videos for an illustrated explanation) include:

- Potentially protect a stock position against a market drop
- How to sell covered calls
- Introduction to technical analysis

A retirement section has a calculator that can estimate the future size of a nest egg based on age and rate of return.

E*Trade’s YouTube channel has at least 10 times as many instructional videos on it as Robinhood’s channel.

Winner: E*Trade


Third Category: Security Analysis


When you’ve completed your education, it’s time to start trading. But first, you’ll want to pick a specific asset to trade. To do this, you’ll need some analysis tools.

Inside of our trial E*Trade account, we found a stock screener capable of searching for possible trades according to many criteria. A search can be saved, and the screener offers predefined searches in case you need some ideas. The same is true for the broker’s fund screeners.

Once you get to the results of a search, you can simply click on a ticker symbol and get to a security’s profile. During our investigation, we found lots of helpful details on profiles. E*Trade provides insider trading activity, earnings history, and free stock reports. For Uber, we found five pdf reports (published in the last five months) with trade recommendations. TipRanks offers a trade recommendation and price target without a report.

Robinhood doesn’t have a stock screener, which is a huge strike one. It does offer categories of stocks and funds. These categories are displayed with icons and labels. For example, a capsule represents pharmaceutical companies. Clicking on an icon produces a list of securities with just a few sortable columns, like market cap.

Stock and ETF profiles at Robinhood have minimal information on them compared to E*Trade’s profiles; although there is a trade recommendation composed of multiple analysts.

Winner: E*Trade


Fourth Category: Margin Borrowing


E*Trade investors pay margin interest on a traditional sliding scale. It starts at 8.95% and drops to 5.45%.

Robinhood always has to be different, and in the margin category, there is no exception. It charges a flat $5 per month for margin privileges, and this fee includes the first $1,000 in borrowed funds. After that, the charge is 2.5%.

Winner: Draw


Fifth Category: Websites


Robinhood traders can use the broker’s website to find securities, analyze them, and place trades. Charts can be expanded the entire width of the computer screen, which of course is a big plus if you want to analyze price action. The broker’s order ticket has six order types, including one odd ball (recurring orders). A tick box allows an order to execute during extended hours.


Robinhood or Etrade


E*Trade also has a user-friendly website. Charting is more advanced with several graph styles, lots of technical indicators, company events, and trendlines. Because E*Trade allows short positions, there is a discrete sell short button on the broker’s order form. (Robinhood doesn’t permit shorting).

E*Trade customers who don’t find what they need on the website can upgrade (at no cost) to the company’s browser platform. Going by the name Power E*Trade, it boasts even more robust charting and a sophisticated order form.


Etrade vs Robinhood


Winner: E*Trade


Sixth Category: Desktop Software


Although Power E*Trade is quite powerful, the broker delivers even more with a professional-level desktop program. Aptly named E*Trade Pro, this platform offers tools not found on Power, including time & sales information and Level II quotes.


Etrade versus Robin Hood


Robinhood has no desktop software, and we have doubts it ever will.

Winner: E*Trade


Seventh Category: Mobile Apps


Although Robinhood has no desktop system, it does have a mobile app (and a smartwatch app). During our testing of the iPhone platform, we found vertical charts with no tools. The order ticket has the same order types as the website platform. And pretty much all of the other tools on the website are on the app as well.


Robinhood vs Etrade


E*Trade has two apps, both of which can be used on tablets. Robinhood’s app is only designed for phones. Combined, E*Trade’s apps provide a tremendous trading experience, with Level II data, an advanced trade ticket, and excellent charting. Graph styles include wave, scatter plot, hollow candle, and Heikin-Ashi. The number of technical studies is well over a hundred.


Power Etrade


Like Robinhood, E*Trade has an app for Apple Watch.

Winner: E*Trade


Eighth Category: Options


Besides great charting and equity trading, E*Trade’s apps deliver very good option tools, including pre-installed strategies and the ability to create custom orders. During our probing, we found 16 option plays in addition to calls, puts, and custom (create your own).

The computer and desktop platforms go further with profit-loss diagrams, Greek values, and other advanced tools. We shouldn’t leave out the website as it, too, has enormous derivative trading power, perhaps outperforming the other platforms. The site has an income backtester, a strategy optimizer, and much more.

Robinhood simply doesn’t have the same advanced tools that E*Trade offers. While Robinhood’s mobile app does have 11 option trades pre-installed and ready to go, somewhat surprisingly, the company’s browser platform doesn’t have these spreads. It is just calls and puts there, although it is possible to create your own 4-leg order. Just click on the contracts you want to buy or sell, and they are automatically added to the order ticket.


Robinhood compared to Etrade


Winner: E*Trade


Ninth Category: Other Services


Dividend reinvestment program: It’s possible to reinvest cash dividends as additional shares at either broker-dealer in this challenge.

IRAs: E*Trade customers can open several IRA types. Robinhood doesn’t offer any retirement accounts.

Automatic mutual fund investing: Available at E*Trade.

Fractional-share trading: Here, we find something that Robinhood offers but E*Trade doesn’t: whole-dollar investing in stocks and ETFs (and cryptos).

IPO availability: E*Trade clients can get in on IPOs before they hit the secondary market. Robinhood traders cannot.
Extended hours: Both E*Trade and Robinhood offer extended-hours trading (morning and evening). E*Trade has longer hours. Plus, it offers 24/5 trading in a small list of ETFs.

Winner: E*Trade


Now, Our Recommendations


Small accounts: Neither broker charges any maintenance, annual, or low-balance fees; and E*Trade has eliminated a $500 minimum opening deposit requirement. So either should work.

Retirement savers and long-term investors: Because Robinhood offers no retirement accounts or financial advice, E*Trade is the only real option.

Stock/ETF trading: The most advanced experience will be found on E*Trade Pro. But if you want to trade fractional shares, go with Robinhood.

Beginners: Not only are E*Trade’s learning materials better than Robinhood’s, E*Trade is the lone broker in this survey to offer 24/7 customer support, a practice trading mode (on Power E*Trade), and branch locations.


Promotions


Etrade: Get zero commission on stock and ETF trades.

Robinhood: Get one FREE stock when you open an account.

Firstrade: Get 2 FREE stocks and $0 commission in ALL trades!



Robinhood vs E*Trade: Judgment


This examination clearly shows that times have changed, and E*Trade is now the better value. Anyone looking for $0 commission trades will find an even better deal at Firstrade.