TradeStation may be the most robust investing platform available. It does have a large number of sophisticated investing tools that will help even the most experienced investor up his or her investing game.
The platform offers a number of paid subscription services, that will make most sense to very active traders. If the platform has a limitation, it’s that it’s probably not the best choice for less active traders.
Check out our other reviews on great investment options such as our Motif Investing Review.
About TradeStation
TradeStation began operations in 1982 as Omega Research, Inc., and launched the TradeStation name in 1991. In its early days, TradeStation was a trading software provider, but in 1999 it transformed into an Internet-based brokerage trading platform. Shortly after, TradeStation acquired OnlineTrading.com, a direct access securities brokerage firm. From there, the company began rolling out a series of innovations, including the integration of direct access options execution and self-clearing of stock trades for active traders in 2004.
After that, the company continued to advance and gained notoriety in the financial press for innovation and efficiency. It also grew quickly in international markets.
Today, TradeStation is a wholly owned subsidiary of Monex Group, Inc., which is one of the largest online financial services providers in Japan.
The company continues to draw favorable reviews from the financial media with the following happening just in 2016 :
- Highest Rated in “Best for Frequent Traders” Category by Barron’s
- Rated “Best Trading System – Stocks” and “Best Trading System – Futures” by Technical Analysis of Stocks & Commodities readers
- Rated “Best Platform Technology” and “Best in Class in Mobile Trading” by Stockbrokers.com
- Ranked “Top Five” Online Broker and #1 for Equity Trading Tools by Investor’s Business Daily”
The company is widely recognized for its customer support, online education, community of traders, fast market data, execution technology, competitive pricing and its award-winning trading software.
The TradeStation Platform
TradeStation’s platform delivers power, speed, and flexibility that serious traders demand in order to help their investing performance. Some of the tools and features offered by TradeStation will require the payment of monthly subscription fees.
Finding Trading Opportunities. This uses a combination of tools. One is the RadarScreen (paid subscription, see fees and waiver criteria below), that provides customizable market tracking, scanning and advanced pattern-recognition capabilities. It enables the user to see what’s really moving the market in real time.
Hot Lists enables you to act on unusual activity. You can select from more than 100 high-level hot lists of unusual market moves, that way you can see which stocks, funds, and options are moving so that you can identify today’s biggest winners and losers.
The Scanner tool allows you to literally scan the entire market of stocks and exchange traded funds (ETFs) in just seconds. This is not limited to a few pre-set scans. It provides technical and fundamental analysis using hundreds of fundamental fields, options related data and built-in technical analysis indicators. You can also set it up with custom scanning criteria.
The OptionStation Search tool allows you to search for new options trading opportunities. It ranks positions using multiple criteria, and gives you the ability to select a pre-built strategy from the tools library of commonly used pre-built options strategies.
Analyze the Markets. You can employee fully customizable charting, backtesting and analysis capabilities for stocks, options, futures and Forex. The OptionStation Pro (subscription service, see fees below) provides fast and intuitive options trading. It provides enhanced options search with results ranked by spread characteristics, configurable spread-specific options chain views, and dynamic options pricing and Greek calculations.
The Portfolio Maestro This feature enables you to integrate fundamental analysis into your portfolio strategies. It provides precise portfolio analysis using the approach that most closely simulates the actual performance that could be achieved if the portfolio were traded in real time. It also provides portfolio-wide constraints that allow you to manage exposure, protect profits and the limit downside risk of your portfolio. (This feature is a paid subscription service, see fees and waiver criteria below.)
TradeStation Trading Tools
The TradeStation Platform is a paid subscription service, but the monthly fee can be waived if you meet the minimum activity fee waiver requirements (see fees listed below, including the waiver). The Platform provides an incredible number of trading tools, including:
Simulator. This tool enables you to test risk-free trading simulations, so that you can learn if your strategies will work without risking real money. You can test your own trade ideas in real time and get real-world trading experience, all before you put any of your own money at risk.
Matrix. This enables you to view and trade the market from a single window. It provides lightning-fast, one click order entry, and enables you to have automatic stop loss and profit target orders. You can also track your profit or loss in real time.
Chart Trading. This feature allows you to intuitively place and edit orders directly on a charge in real time. You can place single and multiple leg orders with a simple mouse click. You can view position details and easily close or reverse a position. You can also place commonly used orders – including hit/take, market, OCO, and trailing stops – with the click of a button.
Quick Trade Bar. This is a fast order entry tool that enables you to get in and out of the market quickly with single click order entry. You can also cancel your open orders with just a single click, as well as track profit and loss.
Basket Trading. This feature enables you to place trades for multiple symbols with a single click. You can place a single order for an entire basket of stocks or futures. You can also scale in and out of baskets, by managing the percentage of the basket trade.
TradeStation Features and Benefits
TradeStation packs a lot of features and benefits into a single platform. This list will include most of them, but certainly not all.
Minimum initial deposit/balance requirements. The minimum account balance for a non-day trading account is $5,000. A pattern day trading account must maintain a minimum daily balance of $25,000. If the account balance falls below $25,000 trading is restricted to closing transactions only until the account balance is increased to $25,000.
An account is permanently deemed to be a pattern day trading account if four-day trades are placed in a five day trading period within the account.
Account types. With TradeStation you can open individual and joint brokerage accounts, traditional and Roth IRA accounts, SEP and SIMPLE IRAs, custodial accounts, and business accounts for corporations, partnerships, limited liability companies, and sole proprietorships.
Lightning-Fast Trading. The proprietary TradeStation Network ensures reliable, lightning fast, best execution for both individual and institutional clients. It combines speed, price improvement per share and net price improvement per share to assure you the fastest trading times possible.
Account funding. You can transfer money into or out of your TradeStation accounts by wire transfer, check deposit, and electronic transfer (ACAT).
Checks must originate from a US bank, and are subject to a three business day hold for trading purposes, and a six business day hold for cash withdrawals. Deposits through wire transfers are immediately available for next day trading and withdrawal.
Electronic transfers from other financial institutions are free of charge, but will require from 7 to 10 days for broker-to-broker transfers. Transfers from banks, mutual fund companies and transfer agents can take between two and four weeks.
TradeStation does not accept cash, money orders, or third-party checks.
TradeStation University. This is a 12 step video tutorial that will show you how to understand and use the TradeStation trading platform. For example, it will show you how to make best use of order entry, chart analysis, the RadarScreen feature, Option Station Pro, and the online and mobile platforms. The videos can be in excess of one hour each, so it will require an investment of time in order to get through the entire tutorial.
TradeStation Mobile. The app is available for iPhone, iPad or Android. It gives you access to all of the tools and features that are available on the TradeStation platform. You can use your mobile device to analyze markets, place trades and manage orders, and do it all in real time.
TradeStation Forum. This is an online forum that includes thousands of topic posts by TradeStation users. It’s an opportunity to interact with other investors on the platform, so you can benefit from their insight and experience.
Customer service. You can contact TradeStation customer service by toll-free phone, Monday through Thursday, 7:30 AM to 6:30 PM Eastern time, and Friday, 7:30 AM to 5:00 PM Eastern time. There are different phone numbers available for futures and Forex trading, and both are available 24 hours a day on most days.
Asset protection. Your account is protected by SIPC, which will insure securities and cash of up to $500,000 per depositor, including $250,000 in cash. There is also additional protection through Lloyds of London, which insures each account for up to $24.5 million, including up to $900,000 in cash.
Account security. TradeStation uses state-of-the-art 128 bit data encryption (TLS/SSL) on their secure websites and applications. They also use advanced hardware and software firewalls to prevent unauthorized parties from gaining access to the platform and to your personal information.
TradeStation Fees
Pricing and fees for TradeStation are more involved than they are with other trading platforms, mostly because TradeStation provides so many options and paid upgrades. These look something like this:
Monthly Access fee. TradeStation charges $99.95 per month as a minimum activity fee, plus fees for real time exchanges to which you are subscribed. This fee applies to equities and futures accounts.
The fee is waived if you meet the minimum trading volume criteria for the previous month. In order to qualify for waiver of the minimum activity fee, you have to have any one of the following:
- 10 round-turn futures and/or futures options contracts, or
- 50 options contracts traded, or
- 5,000 shares traded, or
- $100,000 account balance
Stocks and ETFs. You have the option to trade for either $0.01 per share ($0.006 per share after the first 500 shares per trade), or a flat rate of $4.99 per trade. This puts them in direct competition with Ally Invest and gives them a price advantage over the $6.95 that TD Ameritrade charges. Broker-assisted transactions require a fee of $50 per trade.
Mutual Funds. There is a commission fee of $14.95 per trade
Options. TradeStation has two commission arrangements for options. The first is $1.00 per contract, with ticket charge, a minimum of one contract, place as market or limit.
The second option is a tiered pricing schedule for options that looks like this:
- 1 – 9 trades per month, $9.99 per trade, plus $0.70 per contract
- 10 – 29 trades per month, $7.99 per trade, plus $0.50 per contract
- 30 – 99 trades per month, $6.99 per trade, plus $0.40 per contract
- 100 – 199 trades per month, $5.99 per trade, plus $0.30 per contract
- 200 or more trades per month, $4.99 per trade, plus $0.20 per contract
There is a fee of $14.95 for options exercise or assignment. Exercise or assignment expiration fee is $1.20 per contract, plus any applicable exchange and regulatory fees. Index options incur an additional fee of $0.35 per contract. Direct routing orders have an additional fee of $0.50 per contract. There is no charge for cancel orders.
This is right in line with other brokerage accounts, but more expensive than anything you would get with a more automated brokerage service like Betterment.
Margin interest rates. TradeStation has a sliding scale on margin interest rates, with lower rates for higher account balances. The range is as low as 6.25% on account balances of at least $10 million. However the rate is 8.50% if the account balance is less than $25,000.
Futures. Unbundled futures work on a tiered schedule as follows:
- Less than or equal to 300 contracts per month, $1.20 per side, per contract
- 301 – 1,000 monthly contracts,$1.00 per side, per contract
- 1,000 – 10,000 monthly contracts, $0.65 per side, per contract
- 10,000 – 20,000 monthly contracts, $0.45 per side, per contract
- More than 20,000 monthly contracts, $0.25 per side, per contract
Standard exchange, regulatory, and overnight fees may apply.
On Futures+ transactions, the fee is $1.20 per side, for contract for futures options and futures contracts traded through the Futures+ platform. Once again, standard exchange, regulatory, and overnight fees may apply.
Additional fees on futures are available on the futures pricing webpage.
Software subscriptions. Monthly fees apply to certain software subscriptions, including:
- TradeStation Platform, $249.95 per month for non-professionals, or $299.95 per month for professionals
- RadarScreen, $59.95 per month (waived if you meet the minimum activity fee waiver listed above)
- Portfolio Maestro, $59.95 per month (waived if you meet the minimum activity fee waiver listed above)
- OptionStation, $59.95 per month
Other TradeStation fees. Other fees that you are likely to see at some point in your investing activities include:
- Hardcopy statements/confirmations, $1 each
- Transfer and ship physical certificates, $500 plus overnight fee
- Sending wires, $25 equities, $35 international
- Outgoing account transfer, $150
- IRA annual account fee, $35
- IRA termination, $50
- Margin liquidation, $50
- Option liquidation, $50
TradeStation Caveats
TradeStation offers an impressive platform, and we can come up with only one negative factor.
Fees are high for inactive traders. Since so many of the fees on the platform are contingent upon the level of trading activity, it can be an expensive platform to operate on unless you are an active trader.
Will TradeStation Work for You?
TradeStation may be the consummate investment platform for very active traders. It has every tool imaginable that will help you to improve your investment performance. In fact, the sheer volume of features, tools and services can be somewhat overwhelming. But you only have to use the ones that you need. And if you are an active trader, you may find that TradeStation is a lower cost platform than some other brokers who offer lower flat trading fees.
