What is ETrade?
ETrade.com or ETrade is a leading online financial discount broker that has more than three decades of operational history behind them. They are also considered a full service broker that is focused on offering online trading services to retail traders. Given their long operational history, ETrade is often regarded by many as one of the pioneering online brokers. In fact, it has earned the distinction of being the first broker to conduct an electronic trade for one of its clients during the 1980s. Fast forward to 2017, ETrade now can boast of having more than 3.5 million registered accounts.
The large number of trading accounts registered with ETrade is not the only thing that you will be impressed with. ETrade also offers a huge range of products. Their coverage of the markets include Bonds, ETFs, Equities, Futures, Mutual Funds, Options and even initial public offerings (IPOs). Of course, it should be noted that IPOs are limited to U.S residents. While ETrade has been classified as a discount broker, I doubt it would make the cut in today’s market.
The fees which ETrade charges are higher than the industry norm. For stocks and ETFs, you are charged a commission of $6.95 per trade. If you are making an average of 10 trades per day, that will work out to a total of $69.50 and this is only for one leg. When we take into account the closing side of the trade that will come up to a daily trading cost of $139. While this might not seem like much initially but when you add it up to account for a whole year of trading, that number will be approximately $40,000 a year! That is almost the figure for national median of an American middle class household income.
Nevertheless if you are looking for more than just lower trading cost, then ETrade has much more to offer. First of all, ETrade takes security very seriously. Your information on their servers are protected with ETrade CompleteTM Protection Guarantee. This protection not only covers privacy but protects you from fraud and zero liability for unauthorized trades made from your trading account. Furthermore your trading account at ETrade is covered under the Securities Investor Protection Corporation (SIPC) for up to $500,000. The broker has an aggregate insurance coverage of $600 million.
How to open an ETrade account
Before opening an ETrade account, you need to decide what kind of account that you need. ETrade’s accounts are categorized into 4 main categories namely Brokerage, Retirement, Managed Solutions and Small Business Retirement.
Each category is then further subdivided into different types of account depending on your investment objectives.
- Brokerage Category
- Brokerage Account
- Coverdell ESA
- Custodial Account
- Investment Account for Corporations
- Investment Club Account
- Trust and Estate Account
- Retirement Category
- Beneficiary IRA
- ETRADE CompleteTM IRA
- IRA for Minors
- Rollover IRA
- Roth IRA2
- Traditional IRA
- Managed Solutions
- Adaptive Portfolio
- Fixed Income Separately Managed Account
- Managed Investment Portfolios
- OneStop Rollover IRA
- Unified Managed Account
- Small Business Retirement
- Individual and Roth Individual 401(k)
- Investment-Only (Non-Custodial) Account
- Profit-Sharing Plan
- SEP IRA
- SIMPLE IRA
Once you have decided on the type of account that you want, there are 3 ways for you to open an account:
- Online Method
Complete and submit the online registration form
- Phone Method
Call the toll free number 1(1-800-387-2331)
- By Mail
Download the application form and print it
Complete the application form
Send the complete form together with the required check payment or deposit (Payable to ETrade Securities or ETrade Bank) to ETrade.
How to use ETrade
If you are new to the world of online investing, then ETrade is the right broker for you. While the broker first started off as a discount broker, today it has morphed into something much more. It has become a one stop center for the average person looking to secure the financial independence that they dream of having. This is where ETrade separate itself from the rest of the brokers in the industry. With ETrade, you not only get access to a whole range of tools to trade the markets but also guidance from qualified professionals on how best to achieve your investment goals.
Rather than lumping everyone into one category, ETrade has taken the initiative to categorize their clients according to their investment needs. This is evident from the different types of trading accounts that ETrade has provided its clients with. So before you start investing in the market, take time out to check the educational materials which ETrade has provided.
Start with the “Investment Planning Basics” section then move on to learning how to create your investment portfolio. If you have trouble coming up with your plan, ETrade also advises its clients to consult a financial planner to help them create a viable financial management plan. When investing in the financial markets, the biggest mistake which you can make is by not educating yourself properly with the basics.
How to deposit money in ETrade
Unlike most of the online brokers today, the methods used by ETrade for the funding of accounts are more traditional. You might be surprised to learn that ETrade doesn’t support more modern payment methods such as eWallets or Cryptocurrencies. Instead, the methods supported by the broker include:
- Account Transfer
Funds are transferred from financial institutions or internally
- Bank Transfer (ACH transfer system)
Funds are transferred directly from your bank account to ETrade
- Mailing a Check
Funds are deposited through a check mailed to ETrade
- Wire Transfer
Funds are transferred from a third party bank to ETrade
While the choices of fund transfer are rather limited, ETrade has made up for this deficiency by providing their clients with extremely competitive transfer fees.
How to withdraw money from ETrade
The methods used for withdrawing funds from an ETrade account are basically the same as for depositing funds. You can have the choice of an ACH Withdrawal, Bank Wire Transfer, Withdrawal By Check and ACAT Withdrawal.
Transfer of funds through the ACH system takes up to 3 days. While the ACH system is not the fastest methods, it offers safety and conveniences since the transfer can be done online.
Bank Wire Transfer
For transfer outside the US, bank wire transfer is the more effective and reliable method. There is service fee of 25% and ETrade charges 2.25% on the forex conversion.
Withdrawal By Check
You can also request ETrade to mail you a check for the amount that you are withdrawing. There is a service fee of $10 and the check typically 5 to 7 days to arrive. If you wish to expedite the delivery of the check, you will need to pay an additional fee of $20.
ACAT withdrawal is when you transfer your account at ETrade to another broker. Under the ACAT system, it is possible to move an entire account. There is a service charge of $75 for this service although a partial transfer will only cost $25.
How to trade on ETrade
To execute trades on ETrade, you will need to use one of three main trading platforms provided by them. The platforms which ETrade has provided are categorized into Advanced trading platform, Web trading platform and Mobile trading platform
- Advanced Trading Platform
ETrade most powerful trading platform is the OptionsHouse platform. It is used for trading financial instruments such as stocks, ETFs, options and futures. The platform comes with an advanced chart and numerous other trading tools.
- ETrade Web Platform
The web platform is considered as one of the best trading platform for ETrade’s traders to use. Web based and requires no software download, it is accessible with any updated web browser. With its powerful features, you can deal in ETFs, stocks, IPOs, options and bonds. It also supports check writing meaning you can pay your bills directly from your trading account through checks, debit card and money transfer.
- Mobile Platform
The companion to the advanced OptionsHouse trading platform the mobile trading app allow you to trade the markets wherever your whenever you want. It is available for download in 2 versions, for iOS powered devices and Android powered devices.
How to buy stocks on ETrade
There are several ways to trade in stocks on ETrade. The methods used however will depend in your primary investment objective. Stocks can be traded as individual stocks or through an ETF or Mutual fund. Again, let me stress how your will trade stocks will depend on your investment objective. If your primary goal is to reap short term gains, then you will be better off trading in individuals stocks on the ETrade’s trading platforms. However if your goal is for long term growth, you will be more inclined to invest in a more diversified instrument such as a Mutual fund or ETFs. In this section, let us take a look at how to execute a stock purchase on the ETrade trading platform.
Step: 1 Identify the market opportunity
Market opportunities can be found in the price charts, news or from the knowledge section. For example, you can study the price chart and look for stocks that are experiencing a breakout. Tell tale signs that a stock is about to break is a surge in the trading volume and a price increase of at least 3%.
Step: 2 Confirmation
Once you have identified such a stock, you can test out your hypothesis with the various tools that are available on the trading platform. Overlay the relevant technical indicators over the price chart to confirm your observations. After you have confirmed your observation, the next step is to execute the trade.
Step: 3 Execution
Through your trading platform, execute the trade with the appropriate stop loss level in place. Depending on your understanding of the financial markets, you can either execute a basic trade or a multi leg trade.
Step: 4 Monitoring
Once the trade has been executed, it is important for you to keep track of your trade. To assist you in monitoring your investments, ETrade has provided the following tools to make the job of monitoring the markets easier.
- Portfolio Page
The portfolio page provides you with an overview of your investment portfolio. With it, you can monitor the performance of your investments.
- Watch List
Through the watch list, you can keep track of the following information:
- Updated price movements
- News Flash
- Fundamentals of the market
- Information about the instrument
- Mobile Alerts
ETrade has also provide their traders with mobile alerts where they can be alerted to changes in a stock’s highs and lows. Basically, any changes to your portfolio as a result of market movements will trigger an alert.
How to sell stocks on ETrade
Of course when you buy a stock, your ultimate objective is to sell it for a profit. So let’s assume that the time has come for you to sell the stock that you purchased recently. So how do you go about doing that on ETrade? Before deciding to sell a stock, you can always refer your decision to an ETrade advisor. The advisor will give you his professional opinion but the ultimate decision will still be up to you.
To sell a stock, first open up the portfolio page. Select the stock that you will to sell and then click “Trade” from the menu option. Select “Sell” when you are prompted from a trade option. Key in the number of shares that you wish to sell. Next for the listing, select “Market” when you are asked to specify the type of stock that you are selling. Finally preview the sale order before you save the changes. Once you have saved the changes, you can log out as the system will automatically execute the sale order.
How to make money on ETrade
Making money on ETrade is basically all about buying low and selling high. In order for you to be able to do that, you need to be able to determine if prices will move in your favor. In short, you need to be able to analyze the markets properly and for this there is no shortcut except through beefing up your trading knowledge. Fortunately, ETrade has made this task easier by providing a comprehensive trading education section. In the “Knowledge” section of ETrade’s website, you can look up on:
- Investing Ideas
- Markets & News
The education section covers a wide range of topics ranging from Stocks, ETFs, Retirement plans, Stock plans, Bonds and trading platforms and tools. There are numerous articles and video which you can peruse to pick up on new skills and knowledge.
For investment idea sections, the ideas are categorized according to:
- Market Activities
- Market Trends
Markets & News
To keep their clients stay up to date with all the developments in the market, ETrade has also provided their traders with a market overview. The overview will allow you to see at a glance the gainers and losers. In addition, you will also be able to read the latest news headlines. Live charts of the Dow, NASDAQ and S&P market index are also provided for easy reference and comparisons.
You can also access the various in-depth analyst researches here when a simple glance will not suffice.
How to close ETrade account
While ETrade is able to provide extremely detailed on their products and services, information on account closure is another matter. Nevertheless, it doesn’t mean that you can’t close your account at ETrade only that you will need a little more patience. To close your account at ETrade, follow the following steps listed below:
- Step 1: Log in your account and look for the “Need Help? Click Customer Service Online.”
- Step 2: After setp 1, you will be directed to the customer service page, Click on the “Self Service” tab.
- Step 3: On the Self service page, look for the heading “Account Service Requests.” and the link for for “Account Closure Request”
- Step 4: On the Account closure page, choose the account that you want to close. Specify the reason the reason for the account closure.
- Step 5: If you have more than one account, just repeat step 1 to step 4.
General Info about ETrade
Broker name: ETrade
Based: New York City, USA
Regulation: FDIC, the Federal Reserve, Financial Industry Regulatory Authority (FINRA), Municipal Securities Rulemaking Board , National Association of Securities Dealers Automated Quotations (NASDAQ) , New York Stock Exchange (NYSE), Office of Thrift Supervision (OTS), Securities and Exchange Commission (SEC)
Platform languages: English,
Accepting USA traders: Yes
Demo Account: No
Free Demo Account: No
Education: Knowledge section with articles and training videos
Platforms: OptionsHouse Platform, E*Trade Web Platform, Mobile Trader
Assets: Stocks, ETFs, Mutual Funds, Bonds, Futures, Options
Trading Hours: Monday to Friday 9:30 am until 4 pm, EST (Extended hours from 7 am to 8pm)
Funds Protection: E*Trade CompleteTM Protection Guarantee, Securities Investor Protection Corporation (SIPC)
Tools: Market Commentary, Analyst research, Market News, Investing Ideas section. Live charts
Mobile Trading: Yes
SMS Alert: Yes
E-Mail Alert: No
Deposit Options: Bank wire transfer, ACH System, Checks and ACT Transfer
Withdrawal Options: Bank wire transfer, ACH System, Checks and ACT Transfer
Restriction: Minimum deposit of $100 required.
Withdrawal Fees: 0.05%
Phone Number: 1-800-387-2331 (Toll free)
E-Mail Address: N/A
Bonus: $600 Cash Credit
Special Promotion: 500 commission-free trades