TradeStation Review: The Ideal Robo-Investor for Active Traders

TradeStation caters to active traders and cost-wary investors with its low commissions and a feature-rich trading platform. Its low minimum investment (no minimum for the basic TS GO plan) makes TradeStation accessible to new and wealthy investors alike. Our TradeStation review will cover everything you need to know to determine if this stock broker is right for you and your investing needs.

This stock broker is a fit for: Active traders seeking low costs

Top perks

Cash rewards bonus of $50 to $5,000

New account holders receive a cash rewards bonus ranging from $50 to $5,000 depending upon their initial deposit. Just enter code FOOLAFYJ when applying to enroll in the offer.

Low commissions

TradeStation offers commission-free trades on stocks and ETFs, as well as competitive commissions on options, mutual funds, and other investment vehicles.

Cryptocurrency trading

TradeStation Crypto also offers a robust trading platform and advanced analytical tools. Investors get real-time data and can customize their trading interface. TradeStation offers advanced algorithms that help analyze crypto prices in real-time. Crypto trade orders are simultaneously routed to the best available prices across their platforms. There are also no fees to deposit or withdraw crypto.

Powerful platform

TradeStation 10 is a powerful desktop trading platform with all the functionality an active trader looks for. Traders seem to love its complex charting capabilities and capacity for automated trading strategies. In addition, TradeStation has a highly functional web trading platform and a feature-packed mobile trading app.

Investment vehicles

Account holders can invest in an array of vehicles including stocks, ETFs, IPOs, options, cryptocurrencies, futures, futures options, mutual funds, and bonds.

Low minimum

Investors can open a brokerage account with TradeStation with no minimum initial deposit if they only plan to use the web-based and mobile trading portals. For clients who want access to TradeStation's highly regarded desktop trading platform, a minimum of $2,000 is required.

What could be improved

Margin rates

For a trading-focused brokerage, TradeStation margin rates are on the higher end and can be beat.

If you want to trade on mobile with competitive margin rates: Robinhood offers a robust and simple-to-use mobile trading platform. Importantly, it also has $0 commissions for stocks, ETFs, options (no fee per contract as well), and cryptocurrencies. Where it's outshined by TradeStation is the brokers limited account types and no access to mutual funds.

For more information, see The Ascent's comparison of TradeStation vs Robinhood.

If you want lower margin rates: Interactive Brokers has rock-bottom margin rates that can easily beat Tradestation's rates. These two stock brokers do go to-to-toe elsewhere with the breadth of investment vehicles and trading platforms.

TradeStation has two different pricing structures, and the key difference is how feature-rich the services are. Both plans have commission-free stock trading.

The TS GO plan offers lower commissions on options and futures trading, and it also has no minimum deposit requirement. The drawback is that TS GO only permits users to trade through the company's web-based and mobile trading portals.

The TS SELECT plan is designed for more active traders. It has slightly higher (but still competitive) commissions for options and futures, but it allows access to the TradeStation 10 desktop platform and all of its associated features. Investors need a $2,000 minimum deposit to enroll in TS SELECT.

The table below shows how the two commission schedules compare:

The best plan for you depends on how advanced a trader you are. For the majority of investors, advanced trading tools aren't much of a necessity, but if you're an active investor who makes frequent trades, especially when it comes to options or futures, the TS SELECT plan is likely worth the slightly higher cost structure.

Investors who use mutual funds as an integral part of their portfolio may find TradeStation's fund offerings disappointing. While the $14.95 commission for mutual funds is on the lower end of the spectrum, so is the mutual fund selection. Investors have access to over 2,000 mutual funds, but this is a fraction of what many competitors offer.

For this reason, TradeStation is perhaps a better fit for active traders and investors who mainly plan to buy individual stocks, rather than long-term retirement investors, who are more likely to use mutual funds. Several other brokers offer thousands of mutual funds, many of which their customers can trade for free. This may be a make-or-break feature if mutual funds are a major part of your portfolio.

Before you open a brokerage account, you should read through the broker's fee disclosures. We took a deep dive into TradeStation's fine print, finding a few fees that warrant additional discussion.

• Inactivity fee: TradeStation customers must make at least five trades per year or have an average end-of-month equity balance of $2,000 to avoid its $50 annual inactivity fee. This inactivity fee is easy to get around, but it makes TradeStation a less compelling choice for people who want to start small.
• IRA annual service fee: TradeStation charges a $35 annual fee for IRA accounts, which is a fee many competitors simply don't have.
• Options exercise and assignment fees: Options traders will want to make note of the fees for exercising an option or having options assigned. TradeStation charges an exercise/assignment fee of $14.95, higher than its base commission price of $5. In addition, it charges an early-exercise or assignment fee of $1.50 per contract, with a $5.95 minimum. Most brokers set their exercise and assignment fees equal to their base commission.

Like many brokers, TradeStation offers multiple solutions for different types of investors and devices. It offers a simple browser-based platform known as Web Trading, a sophisticated desktop platform known as TradeStation 10, and mobile apps for smartphone users.

• TradeStation Web Trading: This simple browser-based platform enables investors to quickly log in and check streaming real-time prices for stocks, ETFs, options, and more. Placing a trade is a snap thanks to its "one-click" feature that allows traders to place a trade in a matter of seconds.
• TradeStation 10: A key feature of the desktop platform is complex charting. It offers 50 years of historical charting data, plus hundreds of technical indicators (e.g., moving averages) that can be overlaid on any chart. Customers can build a watch list, which can show hundreds of data points for individual securities, offering a quick view of key metrics for your favorite stocks. TradeStation's RadarScreen is a cool feature for scanning the market in real time based on customizable indicators. OptionStation Pro, which is built into the TradeStation 10 platform, provides a clean view of options chains and enables you to see the maximum profit or loss for simple or complex options trades.
• Mobile app: iOS and Android users can use the mobile trading app to check their portfolio's performance and place trades (even complex options or futures trades). Users who would prefer not to download an app can also visit use its browser-based platform, which scales down to fit smaller screens.

As long-term investors, we don't obsess over trading platforms, since we don't need many of the features that traders do. It's difficult to judge a platform objectively -- what works for one investor may be no good for another -- so we'd encourage you to give it a test run if the trading platform is especially important to you. If you just need to check your portfolio's value and place the occasional trade, virtually any broker's platform will work for you.

Investors who use margin loans to leverage their portfolio know that the cost of using margin can quickly become the largest expense associated with having a brokerage account. TradeStation ranks well for having lower margin rates than many competing brokerages, though it is most competitive for people who carry large balances.

The TradeStation margin rates for stocks and ETFs are based on a tiered scale. The rates are quite low for large balances but are among the highest of any brokers we reviewed for smaller margin loans.

Of course, if you don't plan on using margin to make investments, the rate TradeStation charges on margin makes no difference. Investors who use cash accounts (many long-term stock, ETF, and fund investors) can’t borrow to invest, so the rates it charges are irrelevant.

Additionally, TradeStation has a unique feature, known as its Fully Paid Stock Lending program, that allows its customers to make their stocks available to lend out to other traders (say, when a short position is opened). TradeStation will give you 25% of the margin interest it earns if you opt in, which could help boost your returns.

In addition to its regular platform, TradeStation helps investors buy, sell, and earn cryptocurrency through its TSCrypto platform. Investors can seamlessly move between all its trading platforms. TradeStation offers many of the same tools and research on its crypto trading platform as on its other platforms. Investors can also trade crypto using TradeStation's advanced mobile app. TradeStation currently only offers five cryptocurrencies:

• Bitcoin Cash (BCH)
• Bitcoin (BTC)
• Ethereum (ETH)
• Litecoin (LTC)
• USD Coin (USDC)

In addition, investors can earn up to 5% interest on these crypto assets. Investors must buy or deposit eligible crypto and maintain a minimum daily value of $50 worth of the cryptocurrency. Interest is paid in the same cryptocurrency. Interest compounds monthly and there is no lock-up period, so investors can trade or withdraw without restriction.

Online brokers are able to charge lower commissions than full-service brokerages because they eliminate most of the overhead costs. That said, many discount brokers operate customer support centers around the clock.

As an online-only brokerage, TradeStation doesn't have a branch network like many of the largest online brokers do. However, it offers support by phone or online chat on weekdays from 8 a.m. to 8 p.m. EST. Technical support for its platform is available 24 hours a day, Sunday to Friday.

In the research department, TradeStation ultimately caters more to short-term traders than to long-term investors. While it boasts an excellent stock and ETF screener, it doesn't offer access to any research reports, nor does it offer basic functions like a quick link to annual reports or SEC filings for individual stocks -- features that long-term fundamental investors may favor.

Here are a few of the research and screening tools worth mentioning:

• Morning Market Briefing: Proprietary to TradeStation, the Morning Market Briefing is a 30-minute video presentation about the markets, economic data, and important events over the coming trading day.
• News: TradeStation customers can get market news from Benzinga for free, though many other news sources are available on a monthly subscription basis through its TradingApp store.
• Stock and options screeners: Powerful stock and options screeners are built into the TradeStation platform, enabling you to quickly sort for trading ideas based on preset screens. The screening tools have hundreds of customizable parameters for technical and fundamental investors alike.

Investors who want access to free third-party research (Morningstar, S&P, CFRA, etc.) for stocks, mutual funds, and ETFs may want to look elsewhere. Many other discount brokers offer in-depth research from third-party research firms for free just for having an account.

Not sure if TradeStation is right for you? Here's an easy way to decide: If the following statements apply to you and your trading needs, then TradeStation should make your short list of the best stock brokers for you.

• You trade often. TradeStation works well for people who want to trade frequently, given it has competitive commission prices and a robust platform that caters to active traders. These features make TradeStation one of the best stock brokers for options.
• You'll keep more than $2,000 in your account. Investors who maintain a balance of $2,000 or more can avoid TradeStation's account inactivity fee, even if the account isn't "active" in terms of trades.
• You don't invest heavily in funds. TradeStation doesn't have any no-transaction-fee mutual funds, and it offers only a fraction of the funds that many competing brokers do. Investors who rely on mutual funds and ETFs may find that commission-free ETFs and no-transaction-fee mutual funds offered by other brokers make them a better fit for your portfolio.
• You're interested in crypto. TradeStation's TSCrypto platform allows investors to buy, sell, and earn five popular cryptocurrencies.