When searching for an online brokerage there are plenty of options; not all are suitable for every investor. TradeStation is one of those companies. In 2011 TradeStation was listed at the #1 online broker with Barron’s – quite a coup. Nevertheless, this firm is best suited to the truly serious investor, otherwise it may not be a good match.
Application Process
To open an account with TradeStation you must provide certain information: income, net worth and liquid net worth. In addition you will need to transfer funds into your new account. This can be handled by check, wire or cashier’s check, with the addition of a number of forms. While details were not clear, the process seems similar to that at other brokerage firms.
Pricing Structure
The pricing structure at TradeStation is fairly straightforward, but there are some minimums required if you are to gain access to certain tools. For basic investors this will be difficult. Here are the prices:
- Equities Per-Share Pricing Program: $0.01 per share up to 500 shares, $0.006 per share thereafter, $1 minimum
- Equities Per-Trade Pricing Program: $9.99 per trade (1-9 trades/month); $7.99 per trade (10-29 trades/month); $6.99 per trade (30+ trades/month). Additionally, direct routing is free for up to 5,000 shares, and costs $0.005 per share thereafter.
- Options: $1 per contract
- Bonds: $14.95 + $5 per bond
- Broker Assisted Trades: $50
- Mutual Funds $14.95
- Futures: $0.25-$1.20 per side, per contract
- Platform Fees: $99.95/month – can be waived based upon activity
- Radar Screen tool fee: $59.95/month
In order to have your platform access and Radar Screen tool fees waived you must meet certain standards. Your options are:
- Trade 50 or more equity and index option contracts
- Trade at least 5,000 shares of stock
- Trade 10 round-turn futures or future options contracts
- Trade 50 round-turn single stock futures
- End the previous calendar month with a balance of $1M USD in your account
Tools
The direct access trading platform provided by TradeStation is considered among the best in the business. It is approachable, provides traders with plenty of extras and allows clients to trade futures, options, equities and even forex from one location. There are some automated trading tools as well, and the tools can be customized for each user.
Educational tools include free Webinars and online tutorials. In person instruction is available. Additionally, you will find that TradeStation has a wiki that you can access if you have any questions which helps make up for the lack of a 24/7 support line.
The Word Online
Like most brokerages, TradeStation has supporters and detractors. Complaints seem to be centered around frequent small fees and poor customer service. Another issued raised was the compatibility of the TradeStation Platform with certain firewalls. Overall, customers seem happy with the brokerage.
The Pros and Cons
TradeStation offers several advantages to its clientele. With low commissions, an exceptional trading platform, many products to trade and superior analysis tools, this is a good company for those who are deeply involved in trading and have the knowledge base required.
For less involved traders, however, the monthly fees, high margin rates, a very expensive platform and a steep learning curve, TradeStation is difficult for the beginner to master. Furthermore, minimum balances are high.
To Sum It Up
TradeStation is a good choice if you are an advanced investor with a lot of capital and knowledge. The advantages found with this company are really directed at those who know what they are doing and how to do it when they open an account; otherwise, the fees will eat up any profits you might possibly make.
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