TastyTrade vs E*Trade Introduction
Deciding on a good broker can be a bit tricky, with so many popular options to choose from. Two
choices you might be considering are TastyTrade and E*TRADE. Both brokers have their strengths and
would be a good option for the right investor, but which is right for you?
This comparison will help you sort out the pros and cons of each, so you can decide if TastyTrade or
E*TRADE meet your expectations.
Ease of Use
Ease of use may not be at the top of everyone’s comparison lists, but we think an intuitive platform leads to better trading decisions. For that reason, let’s start here.
TastyTrade and E*TRADE are both easy to use, but the two platforms are very different.
At TastyTrade, traders can leverage the broker’s modern technology (trading platform) to compile advanced options strategies with almost no effort. Stock, ETF, Crypto, and Futures trading is also straightforward.
Many other features offered by TastyTrade are easy to use as well. The mobile app, account services, contacting customer support, and finding ‘inspiration’ (trade copying) can all be added to the list.
E*TRADE is also simple to use. The broker is more traditional in its approach to trading, and you will see that on the mobile app, the website trading tools, and the available trading platforms.
Due to the traditional look and feel of E*TRADE’s site and platforms may be the easier choice. That said, if you trade complex options, TastyTrade is superior in many ways.
Cost and Fees
TastyTrade and E*TRADE offer access to similar assets and securities. There are also some similarities in the account services and account types offered. Which one is more cost-effective? Let’s find out.
Trading Costs
TastyTrade and E*TRADE offer stocks, ETFs, and complex options strategies. Both also provide futures trading to approved customers.
Options
For options at TastyTrade, you will pay $1 / per contract when you open a position. Closing the position is free. This rate may seem high, but it is capped at $10. Investors interested in trading multiple lots experience a better deal the more contracts they include in their trade.
At E*TRADE, options are $0.65 / contract. The rate goes down to $0.50 / contract if more than 30 trades are logged in the investment account (30+ trades do not all have to be option trades).
E*TRADE is less expensive until the position reaches the $10 mark. TastyTrade becomes the better deal at that point, thanks to the capped commissions approach.
Stocks & ETFs
Both TastyTrade and E*TRADE offer zero-commission stock and ETF trading.
Only E*TRADE offers OTC trading, and there is a fee of $6.95 / trade for them. Higher trade volume (30+ / quarter) brings down the cost to $4.95.
Futures
Futures traders focused on cost will probably prefer TastyTrade due to their lower rates per contract.
TastyTrade charges $1.25 per contract, per transaction (open and close) for minis. For micros, you’ll pay $0.85. For Smalls contracts (TastyTrade in-house futures exchange), you’ll pay $0.25 per contract, per transaction.
E*TRADE charges $1.50 per contract, per transaction for minis and micros.
Capped Commissions
An important feature to remember when comparing trading costs is TastyTrade’s capped commission
schedule.
Here is it for reference:
Account Management Costs
When it comes to account management costs, there are some differences to note:
Margin Rates
TastyTrade is the better choice for investors utilizing margin for their trading.
On average (based on account capital), TastyTrade’s margin rates:
|
Debit Balance
|
Tastytrade Margin Rates
|
|
under $24,999.99
|
10.25%
|
|
$25,000 - $49,999.99
|
9.75%
|
|
$50,000 – $99,999.99
|
9.25%
|
|
$100,000 - $249,999.99
|
8.75%
|
|
$250,000 - $499,999.99
|
8.25%
|
|
$500,000 - $999,999.99
|
7.75%
|
|
$1,000,000 +
|
7.25%
|
are three percentage points lower than E*TRADE’s:
|
Debit Balance
|
E*TRADE Margin Rates
|
|
$250,000 - $499,999.99
|
11.45%
|
|
$100,000 - $249,999.99
|
11.95%
|
|
$50,000 - $99,999.99
|
12.45%
|
|
$25,000 - $49,999.99
|
12.95%
|
|
$10,000 - $24,999.99
|
13.2%
|
|
$0 - $9,999.99
|
13.45%
|
Account Management
ACATS transfers (full/outgoing) at both brokers are $75.
Wires (outgoing) at both brokers are $25.
ACH (deposits and withdrawals) is free at TastyTrade and E*TRADE.
Promotions
TastyTrade:
Get $250 for each trader you refer with this referral link.
E*Trade:
Get zero commission on stock and ETF trades.
Accounts and Money Management
TastyTrade and E*TRADE offer a good selection of account types. Deciding which is better comes down to your needs and desired approach. E*TRADE offers a broader range of account types and money management solutions.
TastyTrade offers brokerage accounts in different formats.
- Individual Cash/Margin
- Joint
- Retirement
- Corporate
- Trust
- International
E*TRADE offers several brokerage accounts, as well as money management accounts.
- Individual Cash/Margin
- Custodial
- Coverdell ESA
- Retirement
- Retirement for Minors
- Small Business Retirement
- Managed Portfolios
- Morgan Stanley Bank Accounts (Checking/Saving)
- Credit Line
- Home Lending
Trading Platforms and Apps
TastyTrade offers three ways to trade. You can use the online, browser-based platform, the mobile app, or the desktop software.
E*TRADE offers four ways to trade. You can use the website, the mobile app, Power E*TRADE, E*TRADE Pro, and the mobile app that goes with the trading platform.
Trading at both brokers is easy, but TastyTrade offers the most unique experience.
TastyTrade’s main trading platform and mobile app are built to make trading easy. That is especially true when it comes to creating and managing complex options positions. The broker’s approach is unique and intuitive, allowing traders to visualize the complex interplay between short and long options valuations, and expected returns.
Despite having some powerful attributes, TastyTrade’s unique approach may not be for everyone. There is a slight learning curve for investors used to a more traditional style.
E*TRADE will certainly give provide a traditional approach. The broker’s most advanced trading platform (E*TRADE Pro) is available to customers with at least $1000 in their trading accounts.
Although it is a solid platform, E*TRADE Pro doesn’t feel innovative. Most of the platform features are relatively standard fare. Power E*TRADE is a simplified version of the pro platform that loads in a browser.
Asset Classes
You will see several differences in the asset classes offered by Tastytrade and E*TRADE.
If you are interested in options or cryptocurrencies, Tastytrade might be the better option. Tastytrade is also better for large trade sizing (thanks to the capped commissions).
If you are interested in trading OTC securities, IPOs, Mutual Funds, or Bonds/CDs, E*TRADE might be the better option for you.
At Tastytrade, you can trade the following:
- Stocks/ETFs
- ADRs
- Futures
- Options (stocks, ETFs, futures)
- Commodities
- Cryptocurrencies
At E*TRADE, you can trade the following:
- Stocks/ETFs
- OTC Securities
- IPOS
- ADRs
- Futures
- Options (stocks, ETFs, futures)
- Mutual Funds
- Bonds
- CDs
Promotions
Tastytrade:
Get $250 for each trader you refer with this referral link.
E*Trade:
Get zero commission on stock and ETF trades.
Which Broker is Right for You?
Tastytrade and E*TRADE have some things in common, but they differ in many ways. The best choice for you comes down to a few important considerations.
If cost is an essential factor for you, Tastytrade is the better option in most cases. Tastytrade may also be better if you want to trade options easily. The speed and stability of the broker’s platforms are additional reasons to prefer them. For cryptocurrencies, Tastytrade is, again, the better choice.
E*TRADE comes out on top in several areas. The broker offers banking services, a more comprehensive selection of account types, and a more diverse lineup of investable securities.
|
|
Updated on 10/7/2024.
I work in investment analytics and have been investing in the market since I was in high school. I enjoy anything that involves lots of strategy (i.e. a good game of chess), which is why I was naturally drawn to investing and researching companies. Outside of investing, I’m a big fan of the outdoors. In summer, you’re most likely to find me kayaking, camping, and hiking in the mountains.
|