E*Trade provides brokerage accounts with access to stocks, ETFs, options, futures, and mutual funds. The platform is now owned by Morgan Stanley, which acquired it in 2020.
The brokerage emphasizes its Power E*Trade platform for active traders while maintaining standard account options for long-term investors. This combination targets multiple user types through tiered pricing and platform options.
What financial instruments does E*Trade provide?
An E*Trade account supports several functions:
- Custody for stocks, ETFs, mutual funds, options, and futures
- Order entry and execution for trading
- Retirement account infrastructure (IRAs, rollovers, small business plans)
- Cash management with banking features
- Automated investing through Core Portfolios
- Advanced trading tools through Power E*Trade
The platform operates across web, mobile, and the Power E*Trade desktop application.
Account types and structure
E*Trade offers multiple account structures:
Taxable brokerage accounts. Individual and joint accounts for general investing.
Retirement accounts. Traditional IRAs, Roth IRAs, rollover IRAs, SEP IRAs, SIMPLE IRAs, and individual 401(k) plans for self-employed users.
Custodial accounts. UTMA/UGMA accounts for minors.
Banking accounts. Premium Savings Account and Max-Rate Checking with debit card access.
Managed portfolios. Core Portfolios provides automated ETF-based investing.
Most accounts have no minimum deposit requirement to open.
How does E*Trade route and execute orders?
E*Trade routes orders to market venues for execution. The firm uses standard market maker arrangements and publishes Rule 606 reports detailing routing practices.
Order mechanics follow standard structure:
- Market orders execute at available prices
- Limit orders wait for specified prices
- Stop and conditional orders trigger at price thresholds
Execution quality varies by order type, security liquidity, and time of submission. Extended hours trading is available but carries wider spreads and lower liquidity than regular sessions.
Price improvement 鈥?executing at a better price than the quoted bid or ask 鈥?can occur depending on market conditions and order size.
For more on order types, see Order Types.
Research and education
E*Trade provides research resources:
- Third-party research reports (Morningstar, Argus)
- Stock and fund screeners
- Educational articles and webinars
- Interactive tools for options strategy analysis
- Market news and commentary
Research access is included with accounts. The depth of analysis tools varies between the standard platform and Power E*Trade.
Where costs appear
E*Trade does not charge commissions on U.S. stock and ETF trades. Other fees apply:
Options. $0.65 per contract, reduced to $0.50 for clients executing 30+ trades per quarter.
Futures. $1.50 per contract for standard futures, $2.50 for cryptocurrency futures.
OTC stocks. $6.95 per trade, reduced to $4.95 for active traders.
Mutual funds. No-transaction-fee funds available. Selling NTF funds within 90 days incurs a $49.99 fee.
Bonds. U.S. Treasuries are commission-free. Corporate bonds cost $1 per bond ($10 minimum, $250 maximum).
Advisory fees. Core Portfolios charges 0.30% annually.
Broker-assisted trades. $25 per trade.
Account transfer. $75 to transfer an entire account out.
For background on broker economics, see How Do Commission-Free Brokers Make Money?.
How does the Power E*Trade platform function?
The Power E*Trade platform provides advanced trading features:
Charting. Technical analysis tools with multiple chart types and drawing capabilities.
Options analysis. Risk/reward visualizations and strategy builders for options trades.
Pattern recognition. Recognia integration identifies chart patterns automatically.
Real-time data. Streaming quotes and level II market depth.
Paper trading. Simulated trading environment for strategy testing.
The platform is available as a desktop application and mobile app. Feature depth exceeds the standard web interface.
Cash management
E*Trade offers banking features:
Premium Savings Account. Interest-bearing savings with competitive rates. Yields adjust with market conditions.
Max-Rate Checking. Checking account with debit card and ATM access. No monthly fees with certain conditions.
Cash can move between brokerage and banking accounts. Uninvested brokerage cash sweeps to a default position. The sweep yield may be lower than dedicated money market funds or high-yield savings alternatives.
Integration with Morgan Stanley’s broader platform may expand over time as the acquisition continues to develop.
Account protections in the U.S.
E*Trade is a U.S. broker-dealer registered with the SEC and a member of FINRA and SIPC. It operates under Morgan Stanley’s ownership.
SIPC coverage. Securities accounts are protected up to $500,000 per customer (including $250,000 for cash) in broker failure scenarios.
SIPC does not insure against investment losses.
What are the tradeoffs, risks, and limitations?
The platform’s structure creates specific tradeoffs:
No fractional shares. E*Trade does not support fractional share purchases for individual trades. Fractional investing is available only through dividend reinvestment or managed portfolios.
No direct crypto. Cryptocurrency trading is not available through standard accounts.
Tiered pricing complexity. Active traders receive better rates, but qualifying requires monitoring trade counts.
Margin rates. Margin interest rates may be higher than some competitors.
Transfer fees. The $75 account transfer fee can add friction to moving assets elsewhere.
Common misconceptions
“Commission-free means no costs.” Options fees, OTC stock fees, and spreads still apply. The savings are concentrated in standard stock and ETF trades.
“Power E*Trade is only for day traders.” The platform serves active traders but also supports longer-term strategies. Tools are available but not required.
“All mutual funds are free to trade.” No-transaction-fee funds exist, but early redemption fees and transaction fees apply to certain funds.
“SIPC protects me from investment losses.” SIPC addresses custody issues in broker failure. Market declines are the investor’s risk.
