TradeStation Review 2024: Pros, Cons and How It Compares
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Our Take
4.1
The bottom line:
on TradeStation's website
Pros & Cons
Pros
Commission-free stock, options and ETF trades.
High-quality trading platforms.
Comprehensive research.
Advanced tools.
Active trader community.
Cons
No transaction-fee-free mutual funds.
High account fees.
Low interest rate on uninvested cash.
Compare to Similar Brokers
Current Product
NerdWallet rating 4.1 /5 | NerdWallet rating 4.8 /5 | NerdWallet rating 5.0 /5 | NerdWallet rating 4.6 /5 |
Fees $0 per trade | Fees $0 per online equity trade | Fees $0.005 per share; as low as $0.0005 with volume discounts | Fees $0 |
Account minimum $500 | Account minimum $0 | Account minimum $0 | Account minimum $0 |
Promotion Qualify for up to $5,000 when you open and fund a new TradeStation account. Offer Code: NERDAFJO. | Promotion None no promotion available at this time | Promotion Exclusive! U.S. residents who open a new IBKR Pro account will receive a 0.25% rate reduction on margin loans. Terms apply. | Promotion Earn up to $10,000 when you transfer your investment portfolio to Public. |
Learn more on TradeStation's website | Learn more on Charles Schwab's website | Learn more on Interactive Brokers' website | Learn more on Public's website |
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Full Review
Where TradeStation shines
Professional trading experience: TradeStation is a top-notch choice for serious investors seeking a truly professional-level trading experience. In fact, at one time TradeStation catered solely to professional brokers and money managers. Now, regular investors have access to the firm’s high-octane tools, with $0 commissions and no account minimum.
Variety of investment selections and tools: In addition to stocks, TradeStation offers bonds, funds, options and futures trading. Its desktop and mobile trading platforms come with a wide range of built-in tools, including charts, news and data feeds.
Where TradeStation falls short
No-transaction-fee mutual funds: TradeStation lacks no-transaction-fee funds.
High account fees: TradeStation's account fees are higher than many of its competitors. The $125 outgoing ACAT transfer fee is on the top end among brokers we review. TradeStation also charges a $35 annual fee for IRA accounts, a $25 domestic wire fee ($35 for international wires), and a $10 monthly inactivity fee for accounts with a balance of less than $5,000 and less than 10 trades in the previous 90 days.
Alternatives to consider:
For no-transaction-fee mutual funds: Charles SchwabInteractive Brokers
For lower account fees: Fidelity
What type of investor should choose TradeStation?
Active traders: TradeStation earns high marks for its feature-rich trading platforms and wide investment selection, making it a great choice for seasoned day traders.
Futures traders: TradeStation offers access to more than 600 futures products, as well as FuturesPlus, a specialized platform for futures trading.
What the Nerds think 🤓
Sam Taube, lead investing writer
"TradeStation provides a quick and easy mobile trading experience that allows you to buy and sell stocks in just a few taps, with lots of data and customization available in the interface.
I will ding them for lack of security, though — the app does not require a passcode to open, nor did it automatically log me out after several days of inactivity."
TradeStation at a glance
Account minimum | $0. |
Stock trading costs | $0. |
Options trades | No base commission; $0.60 per contract. Index options: $1 per option contract. |
Account fees (annual, transfer, closing, inactivity) |
|
Number of no-transaction-fee mutual funds | No no-transaction-fee mutual funds; fund commissions are $14.95. |
Tradable securities | Stocks, bonds (Treasuries and corporates, subject to additional fees), mutual funds, exchange-traded funds (ETFs), options, futures. |
Interest rate on uninvested cash | 0.15% on accounts with more than $100,000 in free cash. |
Trading platform | Desktop platform is oriented toward advanced traders; similar capabilities available on web trading and mobile platforms. |
Mobile app | Offers core features of desktop platform. Available on iOS and Android. |
Research and data | In-house research, plus news from Benzinga. |
Customer support options (includes how easy it is to find key details on the website). | Phone, email, live chat available Monday through Friday from 8 a.m. to 5 p.m. Eastern time. Easily-navigable website, extensive educational content. |
How to sign up for a TradeStation account
There are two ways to sign up for a TradeStation account: online, or by mail. U.S. residents with a valid Social Security number or taxpayer identification number can apply for taxable accounts or most types of IRAs online. Non-U.S. investors, institutional investors and people looking to open a futures IRA must mail in a paper application.
We experienced a slightly convoluted signup process that required address verification, although this may be a consequence of regulations and the fact that our reviewer moved recently, rather than an inefficiency on the part of TradeStation.
Once your account is approved and funded (which may take several days), you'll be ready to trade.
What to know about TradeStation's fees
TradeStation users get commission-free trades on stocks, options and ETFs. Options trades are also commission-free, but carry a contract charge of $0.60 per contract. Index options cost $1 per option contract.
The broker has no account minimum, but its account fees are on the higher end among brokers we review. TradeStation charges $125 for outgoing asset transfers; for IRAs, TradeStation charges a $35 annual account fee and a $50 IRA account termination fee.
TradeStation also charges a monthly inactivity fee of $10, though this is waived for accounts with an average end-of-month equity balance of $5,000 or that execute at least 10 trades during the previous rolling 90-day period.
TradeStation's trading platforms and apps
You might not expect an advanced-trader-oriented broker like TradeStation to deliver an easy mobile trading experience — but you'd be surprised.
Once we got through the account signup process (which was somewhat difficult compared to other brokers), we found an app which lets users seamlessly buy and sell in just a few taps, while offering plenty of customizable features for investors who want them. The iOS version of the app gets very high marks from users, while the Android version has mixed reviews.
How we nerd out testing trading platforms
Our reviewers — who are writers and editors on NerdWallet’s content team — test every online broker platform in our analysis hands-on. That way, we can report on every aspect of the user experience, from funding a new account to placing trades.
We score each broker against criteria that factor in the capabilities offered and the actual user experience of trading with those capabilities. This includes how easy it was to sign up for and fund a new account. Note that a broker may score very highly for the platforms it offers but low for the experience of actually using that platform. Our analysis scores these criteria separately and weighs them evenly when factored into the broker’s overall score. As a result, a broker can offer an advanced trading platform. Still, if it is clunky to use or the process of opening an account is unnecessarily arduous, their score will reflect that.
TradeStation is best known for its impressive 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 and futures. Users can customize their desktop, using a broad palette of colors to better highlight the most relevant data. Investors can test-drive new strategies in real time before putting actual money on the line with the TradeStation Simulator.
Options investors will appreciate access to the OptionStation Pro platform. With its preview mode, mobile-app users can create custom watch lists, and view charts and trends without opening an account. Futures investors will also like TradeStation's dedicated futures trading platform, FuturesPlus, which allows investors to trade hundreds of futures products.
However, all of those customizable elements and features oriented towards advanced traders can make the platform somewhat overwhelming to use for less-experienced investors.
TradeStation also offers a web-based trading platform.
TradeStation's investment selection
TradeStation allows users to trade stocks, mutual funds, ETFs, options and futures. Treasury bonds and corporate bonds are also available, though they are subject to a $14.95 trading commission and an additional $5 fee per note.
Forex traders need to look elsewhere, and the broker does not offer fractional shares or crypto. TradeStation also charges relatively high margin rates (as high as 13.5%).
Investors who want to invest in initial public offerings (IPOs) can do so on TradeStation via a partnership with ClickIPO. Over-the-counter (OTC) stocks are also available for an additional commission of $0.005 per share.
Other key TradeStation features
Research and data
TradeStation gets some credit here for offering a lot of data and research in-house. Hundreds of indicators are included with the TradeStation platform (and many more can be downloaded or created using its EasyLanguage coding feature). Investors can back-test strategies using historical market data that includes more than 90 years of daily data and decades of intraday data. Notifications alert users to upcoming earnings announcements or important market moves based on their positions.
However, TradeStation doesn't offer much in the way of third-party research; at the time of last update, it only offered news from Benzinga.
Customer support
TradeStation’s customer support is available by phone, email and live chat Monday through Friday from 8 a.m. to 5 p.m. Eastern time.
Educational resources at TradeStation include a library of hundreds of YouTube videos and instructional articles. The broker offers an "options education center" with a downloadable workspace and monthly webinars. TradeStation also boasts an easily-navigable website.
IRA account
TradeStation offers most regular types of individual retirement accounts (IRAs), as well as futures IRAs. However, retirement accounts are charged an annual fee of $35 at TradeStation, and the broker offers no retirement planning tools.
Good to know about TradeStation
Subpar execution quality
TradeStation's execution quality on stock trades is 94.14%, slightly below average among brokers we review. The broker accepts payment for order flow (PFOF) under certain circumstances. PFOF involves a broker receiving money from trading firms to route their customer orders through those trading firms for execution. The trading firms can then use this customer order data to inform their own trading strategies.
The average execution quality of all brokers we review was 96.95% as of Oct. 16, 2024. That means 96.95% of orders sold for at a price that was at or better than the National Best Bid and Offer. Executing at or above the NBBO means you may receive a price improvement or a better share price than you were originally quoted.
Low interest rate on uninvested cash
TradeStation has not kept up with some of its competitors in terms of its cash management offering. The broker only pays interest on accounts with more than $100,000 in uninvested cash — and even then, the rate is just 0.15%, far below the rates offered by many other brokers.
Is TradeStation safe?
TradeStation carries Securities Investor Protection Corporation (SIPC) insurance, which protects up to $500,000 per equity account (or up to $250,000 in cash per equity account) in the event of broker insolvency. However, this coverage does not apply to futures accounts, and it doesn't protect against the risk of investment loss.
TradeStation is regulated by the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Financial Industry Regulatory Authority to ensure its compliance with securities laws, futures laws and industry standards.
TradeStation may need to tighten its automatic logout system slightly; during NerdWallet's testing process, we found that we were still logged into the account through the app, despite several days of inactivity beforehand. However, the app does eventually log users out for inactivity, which not all trading apps do.
Is TradeStation right for you?
With its three-plus decades of serving brokers, hedge funds and institutional investors — clients who are sticklers for accuracy, fast trade execution and the ability to customize charting tools to the nth degree — TradeStation has become the gold standard among hardcore traders. Active traders will appreciate the platform’s recent reboot and the fact that they have the same trading firepower at their fingertips as the pros.
on TradeStation's website
