Tradestation rating

TradeStation Review


TradeStation Pricing 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


Overview of TradeStation


Active traders often use TradeStation for their investments. But the brokerage firm offers other pricing packages that will appeal to less frequent traders. This 2018 TradeStation review will look at the broker in-depth and see how it performs against some of its competitors.


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. 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.


Banking Features


TradeStation Banking Rating

TradeStation starts off the survey on a bad note. The broker-dealer does not offer any cash management features. If you want checks or a debit card attached to your investment account, you'll have to go elsewhere. If you have a cash balance in your TradeStation account, the company pays 0.0% right now.

TradeStation does have a convenient online form that makes moving money between a brokerage account and an external deposit account quick and easy.


Mutual Funds


TradeStation Mutual Funds Rating

Going from cash management to mutual funds, the situation doesn't improve very much. TradeStation doesn't emphasize trading in mutual funds, although it does offer them. Unfortunately, the broker doesn't have a fund screener; when we called and asked how many mutual funds TradeStation has, the representative wasn't able to tell us. We do know that there are close to 80 fund families available.

To make the situation even worse, TradeStation doesn't have any no-transaction-fee funds. Every purchase or sale costs $14.95. There are some no-load funds available, though.


ETF's


TradeStation ETF Rating

Now we come to exchange-traded funds, and here the brokerage house offers all listed ETF's. While this is great, TradeStation doesn't have a list of commission-free ETF's, which has become a standard feature of many firms today.

While there is security education and research tools available at TradeStation (see below), we couldn't find anything helpful to ETF traders, another disappointment.


Customer Support


TradeStation Customer Rating

Next up is customer service, and TradeStation doesn't perform spectacularly here, either. For new accounts, the broker has representatives on the phone from 8 o'clock in the morning until 8 in the evening, EST, Monday through Thursday. On Friday, the company closes 2 hours early.

For established clients, the brokerage firm has the same hours, except it remains open until 8:00 pm on Friday. The stock and options trade desk opens at 7:30 in the morning and closes at 6:30 pm Monday through Thursday. On Friday, it closes at 5 pm.

The futures desk is open 24 hours a day, 5 days a week. Technical support is open during the same hours.

There is an online chat function on the TradeStation website. There is also an internal messaging system that can be used. Two international phone numbers are available for clients outside the U.S. TradeStation does not have any branch locations.


TradeStation Commissions, Fees, and Account Requirements


TradeStation Fees Rating

TradeStation has three commission schedules. The first is a per-trade plan that charges $5 per equity trade. Options on this schedule cost an extra 50 cents. Exercises and assignments do cost $14.95. If contracts are exercised or assigned early, the fee is $1.50 per contract with a $5.95 minimum.

The per-trade plan charges nothing for any of TradeStation's software. Real-time data is also free for non-professionals.

There is a bothersome $50 annual account fee for the per-trade plan. But it can be avoided by having at least $2,000 in assets or placing 5 or more trades in a calendar year.

The second plan available is per-share plan. Equity trades are just a penny per share for up to 500 shares. After that, the commission drops to 0.6 cents per share. This plan does have a $1 minimum commission, and that price includes all direct routing fees if you want to send your order to a particular exchange. TradeStation offers this service.

The per-share plan makes up for its low charges by assessing software fees. The broker's desktop platform that we'll look at shortly costs $99.95 per month. Other software tools range from $59.95 to free. These software fees can be eliminated by trading 5,000 equity shares in a month, maintaining a $100,000 account balance, trading 50 option contracts, or placing 10 round-turn futures or options on futures trades.

The unbundled plan is the third and final commission schedule. This one is for very high-volume traders. It is based on the number of shares traded in a month rather than the number of shares per trade, as with the second plan.

With unbundled pricing, the commission ranges from 1¢ to 0.2¢ depending on the number of shares traded in the month. The tiered schedule starts at 100,000 and goes up to 5,000,000+. There's also a minimum commission in the tiered structure. It starts at a dollar and goes down to 50 cents.

With unbundled pricing, TradeStation passes to the customer all exchange fees and rebates for adding or removing liquidity.

TradeStation has representatives who can assist clients with trades, but the services costs $50 per transaction. Bonds are available at $14.95 plus $5 per security per transaction.

One of the great advantages of TradeStation is that it offers futures contracts. These cost $1.50 each per side. Ally Invest, however, is much cheaper for futures traders.

If you would rather go with a different brokerage firm, but use TradeStation's software, the broker has you covered. The price to rent the desktop platform is $249.99 per month ($359.99 for pros) and $59.95 for the other tools.


Promotion




IRAs


TradeStation IRA Rating

TradeStation offers IRA's for self-directed retirement savers. Roth, Traditional, Rollover, SEP, and SIMPLE accounts are available. Within an Individual Retirement Account, stock and ETF trades cost $4 each. Options are 30 cents extra. Futures cost just 65 cents per side.

TradeStation is one of the brokers who still charge an annual IRA fee. The charge is $35. Termination of IRA account costs $50.

We were disappointed not to find solo 401(k) plans available. There is also a serious lack of educational information for retirement savers. On the plus side, TradeStation does not charge any software fees for non-taxable accounts. Real-time market data is also available at no cost.


Investment Advice


TradeStation Investment Rating

So far, we haven't seen a lot from TradeStation in this investigation; and now it's going to get worse. The brokerage firm does not provide any type of portfolio management services, either in traditional format or in the newer robo-advisory model.


Trading Tools


TradeStation Trading Tools Rating

Website

The first piece of technology we'll look at is TradeStation's website. It is not very user-friendly. It took us a while to navigate it and find what we were looking for. Moreover, trading is not possible on the site. It is used mostly for account management.


TradeStation Features Review


We found the funds transfer page to be fairly easy to use. We especially liked the ability to submit a wire transfer request (send or receive) online. Large accounts that don't want to use the ACH system would benefit from this service. External accounts can be easily linked.

Account information can be found under the 'Accounts' tab. It is a little difficult to click through a few places to get to where you need to be. But important information, such as cost basis for a particular security is in there.


Browser Platform

Now we can start trading. Up first is the broker's simpler platform which operates within a browsing window. You can find this platform in the upper-right corner after logging into the website. Alternatively, a link to it is posted on TradeStation's front page.


TradeStation Trading Review


Once you get the platform open in a browsing window, you'll see four tabs near the top of the screen: Positions, Orders, Balances, and Quotes. Quotes shows you streaming data, such as the day's volume, the last ticket, and % change from the previous session.

Below these tabs sits the charting section. We were impressed with the layout of this section. Technical indicators can be shown below a chart, while certain indicators will appear on top of price action. There are different chart styles available, and price histories can include extended-hours sessions.

At the top of the browser is a trade button. Clicking on this produces the trade bar, which will also sit at the top of the platform. Standard orders allow for market, limit, stop, and trailing types. What impressed us the most was the ability to send orders to a specific venue or market maker, something that most browser-based platforms don't permit. Complex orders such as OCO (order cancels order) are also available.


Desktop Platform

A wider range of trading features are on TradeStation's desktop platform. We found a very good charting program where a graph can be expanded full screen. A variety of technical indicators can be added along with comparisons. We also liked the selection of drawing tools.


TradeStation Platform Review


A market depth window can be added to the work screen. Market depth is similar to Level II data. It shows bid and ask sizes along with prices. A news window shows articles from Reuters and Benzinga.

Alerts can be set up, and a watchlist can be created. Hot keys are also available. While there are many features on the platform, this seemed to increase the learning curve of the software. It's definitely not the most user-friendly platform. For example, we had difficulty setting the time frame on a chart. Thankfully, the software has a simulated trading feature, which is a great way to practice. The browser platform has the same feature, too.


Mobile App


TradeStation App Rating

TradeStation has a mobile app that can be used on Apple or Android tablets and phones. Both of them are free of charge and they come with a host of features that active traders will like. Stocks, options, ETF's, and even futures can be traded on the platform. Unfortunately, mutual funds cannot be.

On a security's profile page, we found a chart and vital trade data, such as bid and ask sizes, volume, and 52-week range. There are also news articles posted on an individual stock, courtesy of Benzinga.


TradeStation Review: Mobile


Clicking on 'Chart' at the bottom of the app produces a much more sophisticated graph than what appears on the front page. Here, about 20 technical studies can be used, a good number for a mobile platform. There are also a variety of drawing tools. These include lines, pitchforks, and text boxes.

We especially liked the ability to show filled orders on a chart. A small pop-up chart appears where the order was filled; it shows trade price and date and time. It's possible to toggle back and forth between light and dark graphs. A chart can also be rotated horizontally for better viewing.

One really nice feature on the TradeStation app is something called Matrix. This is similar to Level II data. It shows real-time bid and ask sizes with price in the middle column. If you click on a bid or ask size, the app will automatically produce an order ticket.

The option chain tab shows prices in real time. Besides calls and puts, we found multi-leg strategies like condors, butterflies, and diagonals.

Order tickets on the app have a lot of good features, such as order routing in case you want your order to go to a specific venue. Stop, market, and limit orders are available, and there are several durations.

The feature we liked most on the app was simulated trading, a great opportunity for anyone to get some extra practice on a somewhat sophisticated platform without risking real money.


Investment Education and Stock Research


TradeStation Stock Research Rating

The TradeStation website has some educational resources that will help investors brush up on a variety of financial topics. Called TradeStation University, this section hosts videos, but strangely, no articles. The videos cover issues such as futures trading, market briefs, cryptocurrency trading, how to trade gaps, and how to use OptionsStation Pro. The videos are in high definition and some of them are nearly an hour in length.

There are also online events posted in TradeStation University. It is free to register for these; you don't need to be a TradeStation customer, either. Some of the upcoming topics we found include options trading and how to use the desktop platform.


TradeStation Research Review


If you would prefer to read articles, there is a separate section outside of University that provides market insights and commentary. These are rather short pieces on topics such as the trade war with China and trading quarterly earnings announcements with options.

We were disappointed with the lack of written articles explaining the fundamentals of security trading. There were no articles on ETF basics or how to trade bonds, for example.

Stock research at TradeStation takes place on the broker's desktop platform. There's a small tab on the left-hand side of the screen that reads 'TradingApps.' After you click on this tab a pop-out window will appear with all sorts of gadgets. These include a stock screener, option chains with order ticket, a news feed, and financial data on a particular ticker symbol.

There's also something called the TradingApp Store where you can buy add-ons for various tasks. Most of these are technical studies that aren't included in the default charting program. A few apps are free.


TradeStation Pros


  • Good commissions on most 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 Cons


  • Steep learning curve to master the trading platform
  • No commission free ETFs
  • No mutual funds screener and no NTF funds
  • 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 in per trade plan 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.


Comparison


In terms of stock research, TradeStation does better than Robinhood and Firstrade by offering effective search tools. However, some of these are not very user-friendly and they don't always return a lot of data. We found TD Ameritrade's and Fidelity's equity research to be more valuable.

Comparing TradeStation to its rivals in the customer service category, once again we see a pretty big gap. Ally Invest and E*Trade provide 24/7 service, which some investors are going to need. TradeStation also doesn't have any branch locations, which Schwab does offer.

While TradeStation does offer mutual funds, its service in this category underperforms Vanguard and WellsTrade, both of whom have fund screeners. Both of these brokerage houses also provide NTF funds, something that is sorely missing at TradeStation.

On the plus side, TradeStation is the only broker-dealer we know of to offer a reduced commission schedule for retirement accounts. However, self-directed investors may still be better off with a broker like Ally Invest or Fidelity, who offers low commissions and lots of retirement self-help materials.


Recommendation


TradeStation is not ideal for new investors. Its desktop platform is difficult to use, although as we mentioned, simulated trading is available. Educational resources are on the slim side here as well; plus the broker doesn't offer 24/7 service.

Small accounts that sign up for the per-trade plan and don't trade too frequently will find a decent value at TradeStation. They'll need to maintain a balance of at least $2,000 to avoid the annual fee, however.

For reasons already mentioned, we can't recommend TradeStation for mutual fund investors. Retirement savers who trade infrequently will be better off elsewhere, too.

We can recommend TradeStation to frequent traders who place a lot of orders with lots of shares. They will find a very competitive pricing schedule, which could save them thousands of dollars in less than a year, compared to brokers that don't offer per-share commission schedules. If you don't trade all the time but want low, flat rate pricing then Firstrade with its $2.95 rate might work better for you.


TradeStation Review Summary


As you see from this 2018 review, TradeStation brings a lot to the table for active stock and option traders. Nevertheless, we found some of the broker's tools in these areas to be less user-friendly compared to some of its rivals. TradeStation also underperforms in other key investment areas, making the company questionable unless you have very specific investment objectives and don't need a lot of guidance.


TradeStation Promotion




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TradeStation reviewed by Brokerage-Review.com on . Rating: 3