Founded in 1982, E-trade has become one of the most popular brokers for penny stocks and large caps. They have developed a strong reputation as a reliable brokerage, serving 3.7 million clients worldwide. What sets them apart from competition are their trading platforms, competitive fee’s, educational tools and charting software.
Setting up an Account
Simply sign up for an account by completing an application form. The application process is relatively straightforward, it shouldn’t take longer than 10 minutes to fill out the necessary details. A huge positive for E-trade is their low account minimum, you can open an account with $0 but need to fund it after 30 days to keep it. $500 is required for a cash account and $2,000 for a margin account.
- Although E-trade are not the cheapest broker, they still offer cheap commissions.
- $6.95 fee per trade is slightly above industry standard but the fee falls to $4.95 if you execute more than 30 trades in a quarter. Numerous online brokerages charge lower commissions but add on extra surcharges which can dramatically increase your commissions. For example, Interactive Brokers have a surcharge of $0.001 per share, 10,000 x 0.001 is an extra $10 fee.
- The flat-fee commission structure and no surcharges on penny stocks makes them an ideal option for trading low-priced shares. The flat fee means no matter how many shares you purchase, you pay the same price regardless.
- Commission structure is more favorable towards active day traders.
- Latest promotion – deposit $10,000 and receive 90 days of commission free trades.
Trading Platform (4/5)
- E-trade have two advanced trading platforms – E*TRADE and Power E*TRADE (formerly Options House).
- Power E*TRADE is an innovative platform ideal for penny stock traders as their tools are relatively easy to use. They have advanced intraday and historical charting, drawing tools, and market news. The charting tools automatically populate charts with technical analysis.
- E*TRADE was their original platform before they acquired Options House, perfect for beginners who need to research investments, track markets, place trades, and develop their skills.
- Their mobile app also allows you to follow the markets wherever you go!
Customer Service (4/5)
- E-trade have won awards from Smart Money due to their customer service. Some of their customer support is outsourced to foreign countries to reduce expenses which is normal for large corporations.
- Customer service is friendly compared to other brokerages.
- 24/7 support available, gives them an edge over competitors.
- No extra fees for penny stocks and beginner friendly.
- Have excellent borrows for shorting penny stocks.
- Minimum account deposit is $500; Interactive Brokers has a $10,000 account minimum.
- No inactivity or unnecessary acquaintance fees.
- No longer accept traders from Ireland and the UK. Check their list of accepted countries as from time to time, they change it.
- Quotes are delayed by 15 minutes unless you meet the 30 trades per month requirement.
- Not able to fund your account with a debit or credit card and only support one currency, USD.
If you’re interested in trading penny stocks, E-trade are a great choice! Various experienced day traders such as Timothy Sykes highly recommend the brokerage!