Overview: TradeKing vs E-Trade

Nowadays, trading is mostly electronic. Stock exchanges all over the world have traded their intense pits of human traders for dispassionate machines. However, the investing public has taken things a step further. All the screw-ups on Wall Street have prompted everyday investors to take money management into their own hands by using online trading accounts.

Now, instead of weighing the good and bad of different banks, people are, instead, making lists comparing online brokerage firms – like the E-Trade and TradeKing platforms.

tradeking vs etrade

Image Source: Online Trading Accounts

Online trading accounts, also known as online brokerage firms, allow investors to trade stocks, bonds, options, and more on their own, either online or over the telephone. Two popular online trading platforms are TradeKing and E-trade.

Features of E-Trade and TradeKing Platforms

TradeKing vs. E-Trade: Design & User Friendliness

TradeKing has a dynamic trading platform that allows users to use analytical tools and research to make their investment decisions. TradeKing’s options, which allow trading in stocks, bonds, mutual funds, and more, are diverse enough to meet the various needs of investors and their unique portfolios. It is famous for its low price ($4.95 commission) and the social networking nature of its platform. Its platform is very user-friendly, offering an intuitive design and layout for investors.

In an E-Trade vs. TradeKing price comparison, TradeKing wins. For an investor that is simply looking for the cheapest online brokerage firm, TradeKing’s $4.95 commission for stock trades trumps E-Trade’s $9.99 fee. Relatively speaking, E-Trade is still quite competitive in the discount online trading account marketplace. When it comes to user experience, E-Trade boasts a helpful, intuitive design as well.

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TradeKing vs. E-Trade: Streaming Quote Service

The streaming quote service on both platforms is free. This is extremely useful for traders who like to observe current market activity and price fluctuations. Some online trading accounts require users to pay a fee to access this service, which can be a deterrent. However, both the TradeKing platform and the E-Trade platform make this easily available to users the same day they sign up.

TradeKing vs. E-Trade: Diversity of Investment Options

The securities you choose to invest in depend on your personal financial goals and your investment strategy. Most online trading accounts offer the basics, like stocks and bonds, while others may vary, offering financial instruments, like ETFs and mutual funds.

TradeKing’s platform offers the following:

  • Stocks
  • ETFs
  • Options (equity, index, and ETF)
  • Mutual funds
  • Fixed income

E-Trade offers the following investment products:

  • Stocks
  • ETFs
  • Mutual funds
  • Bonds & fixed income
  • Options
  • Futures

When comparing TradeKing vs. E-Trade, E-trade offers a slightly wider range of investment products, but since they both offer largely the same products, the final decision may rest with an individual investor’s preferences and how much they want to pay for an online trading platform’s services. E-Trade fees are slightly higher than TradeKing’s.

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The Convenience of TradeKing Option Tools

TradeKing’s interface is well laid out and full of helpful information on trends, charts, and industry research. The TradeKing platform lays out this information without overloading users with a confusing display.

There are also a number of unique TradeKing option tools that are offered. AutoTrade allows investors to automatically buy and sell based on the advice of a financial newsletter. All the user has to do is cover the cost of the newsletter subscription and pay the base commission of the trades to be executed. TradeKing charges no extra cost for this service.

Another useful TradeKing option tool is the chart feature that allows users to map out their investments and add multiple layers, such as dividend dates, to allow for more nuanced analysis. Users also have the option of saving their work so that they can return to their charts at a later time.

An exceptionally useful TradeKing option tool is the Contingent Order tool. Investors observe the market to make a move when certain conditions are met, usually when a stock hits a certain price. However, that can happen at any time, and if an investor isn’t watching the market when that happens, he/she could miss the opportunity.

The Contingent Order tool allows a user to plug in certain parameters that have to be met. If they are, the TradeKing platform automatically carries out the trade for users, meaning they will get the stock they want, at the price they want, even when they cannot be there to do it themselves.

There are a number of diverse and useful TradeKing option tools at the users’ disposal.

TradeKing vs. E-Trade: Customer Service

TradeKing Customer Service

Entrusting your money with any financial institution, whether it’s a brick-and-mortar bank or an online brokerage, can be nerve-wracking. This is why proper customer service and client care are vital. TradeKing’s customer service is known for being informative, responsive, and of a high quality.

SmartMoney ranked TradeKing’s customer service as number one in 2008, 2010, 2011, and 2012. Its customer service has also received commendations by StockBrokers.com and Barron’s multiple times.

etrade vs tradeking

Image Source: TradeKing vs E-trade

TradeKing customer service is also helpful because of the number of ways users can get in touch with a representative and the uncomplicated nature of its phone system. Telephone representatives are available from 8am to 6pm ET, Monday through Friday.

Users can also receive speedy replies to lengthier questions via email. TradeKing’s customer service aims to respond to emails within two hours during regular business days and within 24 hours on weekends. Additionally, live chat representatives are on hand during the usual hours listed for phone representatives for users who feel more comfortable communicating through instant messaging.  

Users have complained about execution speeds and the layout of the platform, but these are considered par for the course for a discount online brokerage account. While TradeKing can be used for investors at varying levels, those executing a large volume of trades may find TradeKing’s platform to be a hindrance.

Even with technical difficulties, overall, users report TradeKing customer service to be very responsive and professional.

E-Trade Customer Service

What’s special about customer service with E-Trade vs. TradeKing is that E-Trade’s customer service representatives are available by telephone 24/7. This is an uncommon but extremely attractive feature for investors seeking the peace of mind that readily available help brings.

E-Trade also has a live chat option and even a few branches throughout the U.S. These features, coupled with the 24/7 telephone support, make the higher E-Trade fees, compared to TradeKing, more justifiable. 

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The Price of Using Online Trading Accounts: E-Trade vs. TradeKing

Generally speaking, the price comparison of TradeKing vs. E-Trade is $4.95 against $9.99, respectively. However, it is a bit more complicated depending on what kind of investment vehicles you plan on using via these platforms.

Fees on the TradeKing Platform

Stock trades on TradeKing have a base commission rate of $4.95 per trade. If you are in the business of buying and selling options, the TradeKing platform charges 65 cents per contract plus the base trade rate of $4.95. An option is an agreement to buy a security at a set price some time in the future.

For example, Person A agrees to buy stock for $100 in three months. If the buyer, Person B, agrees to this and sells Person A the option, he/she must honor this price. So, if the value of that security shoots to $300, Person B must sell it Person A for that price. If Person A goes more than three months without buying it, then he/she will lose that opportunity and the initial investment, which is the money paid to secure that option.

This does not necessarily mean that Person A is obligated to buy that security. Although, if he/she chooses not to buy it, that individual will lose the money that was initially put down. The TradeKing Platform allows users to buy options.

Understanding E-Trade Fees

E-Trade has a base rate of $9.99 and a contract fee of 75 cents for options. E-Trade fees are lower for larger trades. More than 150 trades per quarter are charged at $7.99.

TradeKing vs. E-Trade: Inactivity Fees

Anyone who’s ever had something as commonplace as a credit card is familiar with the yearly annoyance of annual fees. Fortunately, most discount online brokerage firms do not charge annual maintenance fees, and both TradeKing and E-Trade fall into that category.

However, online brokerage firms do find a way to get around this by simply calling it something different: an inactivity fee. E-Trade does not charge this, but there is the possibility of incurring a TradeKing inactivity fee. 

Like the name suggests, inactivity fees are incurred when there is limited to no activity in a person’s account. When these are charged depends on the firm; some firms charge them yearly and others charge them monthly or quarterly. The TradeKing inactivity fee is charged if a user’s account has both of the following characteristics:

  • There is less than $2500 in the account
  • No trades have been carried out in 12 months

If someone falls into both of these categories, there is a TradeKing inactivity fee of $50 that is charged annually. A user with $2500 in his/her account doesn’t have to worry about carrying out trades during the year in order to avoid this fee.

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A TradeKing Forex Review

The regular TradeKing platform does not allow users to trade currency, but there is separate platform they can sign up for, which is part of the TradeKing brand called TradeKing Forex.

The foreign currency exchange market is not centralized in the way that securities are in the form of exchanges like the New York Stock Exchange. Buyers and sellers agree upon prices. While TradeKing Forex is not a market maker, its owner, GAIN Capital, is and, as it states in its disclaimer, its interests are not always lined up with its users.

If the TradeKing platform for foreign exchange was an electronic communication network broker (ECN), it would not set the prices but derive them from multiple sources and simply take a commission off of users’ transactions.

In addition, TradeKing Forex is separate from the TradeKing platform for other investments, creating an inconvenient separation for TradeKing users.

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Are E-Trade and TradeKing Safe?

If you’re wondering, “Is TradeKing Safe?” or “Can I trust E-Trade?” that comes as no surprise. After the mess that large, reputable financial institutions made with mortgage-backed securities and irresponsible lending, it can be hard to hold much faith in the financial system.

No business is 100% safe. The best way to choose is by looking at industry standards, and both of these online brokerage firms have good reputations. They are also insured, but by different bodies. The TradeKing platform is not insured by the Federal Deposit Insurance Corporation (FDIC), but it is insured by the Securities Investor Protection Corporation (SIPC).

E-Trade is insured by both. E-Trade is also part of the Financial Industry Regulatory Authority (FINRA), which gives users some recourse in cases of fraud, but this body is not part of the U.S. government.  

Discount online brokerage firms are a convenient option for people who want to get started with investing but aren’t ready to pay exorbitant fees for fancier firms. The E-Trade and TradeKing platforms are two popular online firms with low prices and a variety of investment options that are accessible for novice and seasoned investors alike.

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