TradeStation is an electronic trading platform owned by TradeStation Group, Inc. and has gained a reputation for being one of the best online brokers for full-time traders.
The group was acquired by Monex Group (Japan) in 2011. TradeStation allows its traders to design and execute trading strategies and offers them comprehensive analytical insights. The platform provides traders an option to invest in stocks, options, futures, and forex.
The company is credited with cultivating a new industry in the online trading ecosystem with its unique and professional features and focusing on the more experienced and affluent traders. Dedicated courses have been crafted and are taught to make the most of the platform.
The primary operating subsidiaries of the group are:
- TradeStation Securities Inc.
- IBFX Inc.
- TradeStation Technologies Inc.
Types of Accounts
TradeStation provides traders with a wide variety of investment tools and products, like, mutual funds, stocks, ETFs, options and foreign exchange. It also offers services to a range of customers looking for the following type of accounts:
As the name suggests, this is a personal account and is owned by the individual registered.
Joint accounts have two or more individuals owning the account together. The following types of joint accounts are available:
- Joint Account with Right of Survivorship: With equal percentage ownership between the owners, this type of account automatically transfers ownership to other owners in case of death of one owner.
- Joint Tenants-in-Common Account: Account owners can specify their ownership share, and in case of the death of one owner, his/her share is passed on to the designated beneficiary.
Individual Retirement Account (IRA)s of the following type are available with TradeStation:
- Traditional IRA: Individual retirement account with tax deferred growth.
- Roth IRA: Individual IRA account with tax free growth.
- Simplified Employee Pension (SEP) IRA: Employers contribution to traditional IRA account.
- Savings Incentive Match Plan for Employees (SIMPLE) IRA: Equity accounts for employers making matching or non-elective contribution to an employee’s Simple IRA.
Entity accounts are available for business entities of the following kind:
- Corporate: For businesses owned by corporations.
- General Partnership: For businesses managed by general partners.
- Limited Partnership: For businesses with two or more partners with a differentiated liability of each partner.
- Trust: For legal entities created by a grantor and administered by trustee(s).
- Limited Liability Company: For Limited Liability Companies.
- Sole Proprietorship: For businesses owned by one individual.
Custodial equity accounts managed for a minor, by an adult, are also available with TradeStation.
A minimum deposit of $500 is needed to open an account at TradeStation, and a $2,000 commitment for margin accounts. TradeStation offers analytical data and insights and software free of cost to traders. Regarding investment tools, it provides commission-free forex trading but charges a fee per trade for other services. The following is the breakdown of the fee and commissions structure at TradeStation:
- ETFs and stock trades – $5 commission fee.
- Futures – $1.5 per contract, per side.
- Bond transactions – $14.95 per trade.
- Mutual Funds transactions – $14.95 per trade.
If the account holder fails to conduct five trade transactions annually or maintain a minimum equity balance of $2,000 every month, a $50 inactivity fee applies. Furthermore, a monthly service fee to the amount of $99.95. Customers can, however, complete one of the following conditions to prevent paying the monthly service fee:
- Ten round-turn futures or futures options contact
- 50 options contracts traded
- 5,000 shares traded;
- $100,000 account balance
TradeStation is the brainchild of brothers William Cruz and Rafael Cruz. Both were interested in trading from an early age and tested their ideas and strategies, which created the groundwork for TradeStation. Under Omega Research, a company they founded, they integrated innovation and technology with trading strategies, which paved the way for the released TradeStation, a trading software, in 1991.
In quick succession, the company landed a licensing deal with Dow Jones Telerate, launched an IPO and came up with an online version of TradeStation. A milestone came in 2001 when the company shifted its focus from being a trading software company to an online trading firm and officially renamed itself as “TradeStation”.
Soon after, the firm started adding more features and options for traders and expanded its functions to Europe. In 2011, it was acquired by Monex Group (Japan), and subsequently, in 2014, the group started operations in Korea and China. Recent lists and reviews of online brokerage accounts feature TradeStation at or near the top.
While TradeStation is one of the most trusted platforms, owing to its high charges and research-heavy features, it is best suited for regular investors and traders who deal in multiple transactions. For smaller purposes, there are numerous cheaper alternatives available.
Robinhood, a comparatively new player, has acquired a considerable market share within a short span of time owing to free services and a $0 minimum deposits.
There are other options like Ally Invest, TD Ameritrade, Fidelity, and E*Trade as well. All the mentioned online trading firms have a sizeable customer base and offer a host of unique and competitive features at varied prices. E*Trade, for instance, has on offer quasi-banking services like savings account and mortgage lending as well.
Customer Trust and Reliability
TradeStation is recognized as one of the most trustworthy and reliable online trading platforms. It has bagged several accolades that declare it the ‘best in industry’ year after year and has a 15-year streak in being named the Best Professional Platform by Stocks & Commodities magazine. With nearly 30 years of experience, TradeStation has also firmly placed itself as an agile and dominant player in an otherwise uncertain business environment. Traders and investors using TradeStation seldom switch to other platforms, and that is a remarkable feat.
Although TradeStation has a variety of accounts for different types of individuals and entities, those who undertake high-value transactions stand to benefit the most from the platform’s many features.
While most online brokerage firms tend to attract smaller investors or those who trade on the side, TradeStation caters to experienced and dedicated individual traders. Owing to the unshakable trust that customers put in the platform, high-volume trading is made easy, safe and convenient.
Innovative Analytical Tools
By creating software and analytical tools from scratch, TradeStation has the clear technological edge over its competitors. Allowing free access to critical data and insights, TradeStation offers its investors several advantages.
The sheer amount and quality of research tools on offer help traders in analyzing each decision through multiple perspectives. Furthermore, TradeStation continuously keeps updating the features and functionalities on offer. The mobile application for TradeStation is also considered one of the best in class.
Strong Client Support
Traders and investors receive strong client service and technical support, including 24-hour assistance (between Sunday and Friday), live chats, and email support.
It also has a dedicated support mechanism for institutional clients and has received numerous awards for offering unmatched customer support services. TradeStation also has a simple and easy-to-use desktop platform that encourages self-learning.
High Service Charges
Undoubtedly, TradeStation charges some of the highest monthly service charges from its customers. There are ways to avoid fees, but smaller investors might find it challenging to meet the conditions. Furthermore, ETFs and stock transactions are not free of charge, as is the case with several other leading online trading firms. Although one could reason that the plethora of data and analytical insight that TradeStation provides is very valuable, the charges are an obstacle for smaller and infrequent traders. Financial consultation and assistance provided by TradeStation are also higher than most other competitors.
More Suitable for Big Traders
Traders who invest on a daily basis are most likely to benefit from TradeStation, owing to its vast array of research-backed tools. The platform targets seasoned investors and traders who can devise, implement and build on their investment ideas and strategies.
Although investors of all types can use the platform, the design gives an advantage to big and full-time investors. Smaller players might not be able to maintain the minimum required conditions and end up paying a high monthly service charge of $99.95.
TradeStation offers courses that teach how to make the most of the platform, however, it takes time to master the tricks of the business, which is something that a beginner might not be able to afford.
TradeStation Review Bottom Line
TradeStation is a name synonymous with trust and quality. Investors should seriously consider the platform, owing to the many benefits it has on offer. While it is naturally more beneficial for serious and frequent traders, there can be no better starting point for beginners who are willing to bear the initial high costs of fee and commissions.
The online trading platform has consistently received several awards which indicate that it has maintained quality and innovation. One can find cheaper alternatives with low-entry barriers, but TradeStation gives its users several unique advantages.