NerdWallet’s rating: / 5
TradeStation is best for:
- Professionals and advanced amateurs
- Options, futures and forex traders
- Very active stock traders
- Tech-savvy, data-driven investors
- Investors seeking top-tier research
TradeStation’s $5,000 minimum balance requirement and $99.95 monthly platform fee may turn off all but the most committed active investors who trade enough to qualify for the fee waiver. (More casual, cost-conscious traders should check out TD Ameritrade’s thinkorswim, OptionsHouse and TradeKing, all of which offer free research and data and have no account minimums.)
However, if you are serious about actively trading stocks, options, futures or currencies — and are the type to have multiple desktop monitors firing away on all cylinders — TradeStation is top-notch in terms of in-depth research, advanced trading tools and speedy, accurate order execution. It consistently rates high on lists of best brokers for frequent traders and international investors by Barron’s and Investor’s Business Daily.
Current promotion
Open an account and save 20% on commissions through March 2016.
TradeStation at a glance
| Account types | • Individual and joint accounts • Traditional, Roth, SEP and SIMPLE IRAs • Trusts • Custodial accounts • Business accounts |
| Account minimums | $5,000 for non-day-trading accounts $5,500 IRA minimum account balance $2,000 minimum initial account balance for forex |
| Account fees | $99.95 monthly minimum account activity fee (waived with $100,000 account balance, or with minimum activity of 10 round-turn futures and/or futures options contracts, 50 options contracts traded or 5,000 shares traded in the previous month) $35 IRA annual account fee and $50 IRA account termination fee $125 outgoing account transfer fee |
| Tradable securities | • Stocks • Bonds • Mutual funds • ETFs • Options • Futures • Forex |
| Stock/ETF commissions | Flat-fee pricing: $4.99-$9.99 per trade based on monthly trading activity (see table below) Per-share pricing: $0.01 per stock or ETF share |
| Options | Flat-fee pricing: $4.99-$9.99 base rate and $0.20-$0.70 per contract based on monthly trading activity (see table below) Per-contract pricing: $1 per option contract (one contract minimum) |
| Research | Free |
| Real-time data feed | Delayed and Level I data is free; real-time and Level II monthly data subscriptions cost $1 and up |
| Mutual funds | $14.95 per trade plus any fund-specific fees |
| Commission-free ETFs | None |
| Broker-assisted trades | $50 plus regular commission |
| Customer service | Client services available Monday-Friday 8 a.m.-8 p.m. Eastern; technical support Sunday 3:30 p.m.-Friday 8 p.m. Eastern; live chat and email support |
Where TradeStation shines
Trading tools: TradeStation is best known for its impressive, award-winning desktop platform. It offers direct-market access, automatic trade execution, and tools for customers to design, test, monitor and automate their custom trading strategies for stocks, options, futures and forex investments. Investors can test-drive new strategies in real time before putting actual money on the line with the TradeStation Simulator, which is recommended because the software is complex. Tech-savvy customers can design their own trade-strategy customizations using the firm’s programming language (called EasyLanguage), and even sell them to fellow TradeStation users through the TradeStation Trading App Store. Options investors will appreciate OptionStation Pro, a tool built into the platform that offers interactive 2D and 3D position graphs.
Research: For access to advanced, comprehensive research, TradeStation earns high marks. More than 150 indicators are included with the TradeStation platform (and many more can be downloaded or created). Investors can back-test strategies using historical market data that includes more than 90 years of daily data and decades of intraday data.
Education and community: Education resources at TradeStation are plentiful, with free video tutorials, articles and ebooks available at TradeStation University and daily pre-market briefings and trader interviews at TradeStation Labs. For a helping hand or a second opinion, there’s the TradeStation Trader Wiki (for tips and how-tos from other TradeStation software users) and discussion forums where investors bat around trading strategies and investment ideas.
Where TradeStation falls short
Cost: TradeStation’s fee structure practically requires its own tutorial to figure out. The company offers two fee schedules. The first is a flat-fee commission based on the number of trades or contracts a customer makes per month:
| Number of trades/contracts per month | Flat fee Stocks/ETFs commission schedule | Flat fee options commission schedule |
|---|---|---|
| 1 – 9 | $9.99 per trade | $9.99 per trade + $0.70 per contract |
| 10 – 29 | $7.99 per trade | $7.99 per trade + $0.50 per contract |
| 30 – 99 | $6.99 per trade | $6.99 per trade + $0.40 per contract |
| 100 – 199 | $5.99 per trade | $5.99 per trade + $0.30 per contract |
| 200 or more | $4.99 per trade | $4.99 per trade + $0.20 per contract |
The other option is the company’s per-share/per-contract commission plan, where investors pay $0.01 per share for stocks and ETFs and $1 per option contract (no base or ticket charge).
As far as actual commission costs, TradeStation holds its own compared to full-service brokers such as E-Trade, Fidelity, Schwab and TD Ameritrade. It’s the $99.95 monthly base platform fee that’s the gotcha for all but the most active traders. The fee is waived only for those who in the previous month traded at least 5,000 shares, 50 options contracts, 10 round-turn futures/futures option contracts or 50 round-turn single stock futures. Investors must also pony up an extra $1 to $20 or more a month for real-time data feeds that are required for each market investors wish to trade in. And access to all sorts of extra doodads (software add-ons, additional data feeds, etc.) requires customers to shell out $5 a month here, $20 a month there or more. Trading like the big boys ain’t cheap.
Mobile and web-based trading: The robust analytical and charting tools that are part of the software package are stripped down for the online platform. And while TradeStation offers a mobile platform for iPhone and Android, trading capabilities are limited (the app doesn’t offer the ability to execute more complex trades) and it lacks watchlists and alert functions.
ETFs and mutual funds: Even though TradeStation has a wide selection of ETFs, it does not offer any commission-free ETFs like E-Trade and TD Ameritrade do. Although the $14.95 mutual fund commission is in line with other mainstream brokers, the fund selection is limited.
The bottom line
If cost isn’t a factor, TradeStation is an ideal choice for active investors (in stocks, options, futures and forex) seeking a professional-grade trading platform, top-notch research and access to a robust suite of tools. The 30-year-old firm has been catering to brokers, hedge funds and institutional investors who are sticklers for accuracy, fast trade execution and the ability to customize charting tools to the nth degree. Now small investors get the same level of service as the pros — and for basically the same price.
Access to all the bells and whistles are baked into TradeStation’s pricing, and only those who transact frequently enough (or trade in higher volumes) will be able to avoid the $99.95 monthly fee. That, and TradeStation’s higher-than-average account minimum of $5,000, knocked them down in our rankings.
Less-active traders (those who write fewer than 50 options contracts a month, for example) may be better served by lower-cost providers such as OptionsHouse or TD Ameritrade’s thinkorswim where research and analysis software are free. Otherwise, if you can meet TradeStation’s minimums and crave high-level, customizable trading tools to test and execute sophisticated strategies, TradeStation is worth a serious look.
Dayana Yochim is a staff writer at NerdWallet, a personal finance website. Email: dyochim@nerdwallet.com. Twitter: @dayanayochim.
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