The Bottom Line: TradeStation is the gold standard for advanced, active traders.
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Pros & Cons
High-quality trading platforms.
Active trader community.
No commission-free ETFs.
Minimum balance requirement for active trading platform.
TradeStation is a top-notch choice for serious investors seeking a truly professional-level trading experience. At one time, TradeStation catered solely to professional brokers and money managers. Now, regular investors have access to the firm’s high-octane trading platform, especially after the company cut costs and lowered its stock-trading account minimum from $5,000 to $500.
The broker’s $25,000 minimum for a pattern day trading account and its complex platform may be a turnoff for all but the committed investor. But if you’re an active trader (or want to be), TradeStation is one of NerdWallet’s top picks, especially for investors who qualify for volume commission discounts.
TradeStation is best for:
Advanced and aspiring traders.
Stock, options and futures traders.
Active stock traders.
Where TradeStation shines
Trading tools: 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. With a recent redesign, the company has simplified its toolbar and right-click menu across the platform, and added a broad, customizable 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. (Other brokers also smartly offer virtual stock trading simulators for existing and potential customers to learn the ropes.) Options investors will appreciate free access to the OptionStation Pro platform. With its new preview mode, mobile-app users can create custom watch lists, and view charts and trends without opening an account.
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. Notifications alert users to upcoming earnings announcements or important market moves based on their positions.
Education and community: Educational resources at TradeStation are plentiful, with free video tutorials, articles and e-books available at TradeStation University and daily pre-market briefings and trader interviews at TradeStation Labs. TradeStation Today features real-time news, relevant tutorials and a “workspaces” section that shows how experts organize and use the platform’s array of tools. For a helping hand or a second opinion, there’s the TradeStation Trader Wiki (for tips and how-tos from other users) and discussion forums where customers can mingle with a community of similarly committed investors and bat around trading strategies and investment ideas.
Where TradeStation falls short
ETFs and mutual funds: Even though TradeStation has a wide selection of ETFs, it does not offer commission-free ETFs, nor does it provide any in-depth research on ETFs. Same with the company's mutual fund offerings: It offers a lot of funds (nearly 4,900), but none of them are no-transaction-fee funds, and fund research is also thin. However, the $14.95 mutual fund commission is in line with other mainstream brokers.
Add-on fees: TradeStation’s welcome drop in fees included the elimination of its $99.95 monthly base platform fee and monthly fees for real-time market data access from the Nasdaq, Amex and OPRA exchanges and the New York Stock Exchange. Access to many of TradeStation's features do still require an additional financial outlay or subscription for those who do not meet certain account or trading minimums.
Potential commission confusion: TradeStation offers three pricing plans, but once you choose a pricing plan, you are allowed to switch to another one just once.
The $5 flat-fee commission schedule for stocks and $5 base rate plus $0.50 per contract for options is reasonable for average traders.
The company’s per-share/per-contract commission plan is more attractive to active traders. Stock/ETF investors pay $0.01 per share (with a minimum $1 per trade) on the first 500 shares and $0.006 per share after that. Options traders pay $1 per option contract (no base or ticket charge) with a minimum one contract market or limit order.
Then there’s the unbundled pricing plan, where the base rate is based on the previous month’s trading activity:
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. Aspiring investors will appreciate the platform’s recent reboot and the fact that they have the same trading firepower at their fingertips as the pros.