TradeStation investing review 2024

In a nutshell

TradeStation started as proprietary software for institutional investors before it became an investment broker itself. It’s now available to the general investment public, complete with the tools and services once available only to professional investors.

• If you’re an options trader, an advanced trader or a day trader, TradeStation may be the right choice for you.
• The platform is designed specifically for such investors, though it can be a good choice for new and intermediate-level investors as well.

TradeStation

View Offer

TradeStation

Min. investment

$0 for cash accounts, $2,000 for margin accounts

Investment offered

Stocks, exchange-traded funds (ETFs), options, futures, futures options, mutual funds, fixed income securities and cryptocurrency

Fees

$0 stock & ETF trades.

$0.60/contract options trades.

$1.50/contract futures trades.

$14.95 mutual fund trades.

Available accounts

Taxable investment accounts; custodial accounts; traditional, Roth, SEP, SIMPLE and rollover IRAs; cash and margin accounts; accounts for trusts, corporations, general and limited partnerships, LLCs and sole proprietorships.

TradeStation investing pros and cons

TradeStation investing overview

Once available only to brokers and professional traders, TradeStation developed one of the top trading platforms in the industry, and it is now available to all investors. That makes it an especially good choice for active traders. You can customize the trading platform, use the Trading Simulator and take advantage of one-click and drag-and-drop trading for quick order entry.

The RadarScreen tool provides over 180 customizable technical and fundamental indicators, and you can even translate your trading ideas into automated strategies. TradeStation also offers margin trading with up to 4:1 leverage, which will be of interest to day traders.

One of the specializations of TradeStation is options trading. You can use OptionsStation Pro to build and analyze options chains, create spread strategies, graph risk and reward and so much more.

TradeStation is one of the few U.S.-based brokers offering their services to non-U.S. residents. That will give foreign investors access to U.S. financial markets. However, the company does charge commissions to non-U.S. residents. Stocks, ETFs and options require a commission of $5 per trade (+ $0.60 per contract for options).

One of the major deficiencies with TradeStation is the absence of a high-yield cash account for uninvested funds. Many investment brokers now offer a high-yield cash option. For example, Robinhood currently pays 1.5% APY for regular accounts and 5.0% APY on all cash balances for Robinhood Gold members, while TradeStation pays only 0.15% APY on cash balances.

TradeStation does provide trading in cryptocurrencies, but the offerings are very limited. Those include only Bitcoin, Ethereum and USDC. Many other brokers offering crypto offer many more. For example, Robinhood offers trading in 15 cryptos as of Jan. 2024.

TradeStation charges high fees for fixed-income securities compared with the competition. Nowhere is this more apparent than with U.S. Treasuries. TradeStation charges $50 per trade, while many other brokers charge no fee for newly issued Treasuries and low fees for secondary market trades.

TradeStation investing features and services

TradeStation offers investing in typical securities, like stocks, bonds, ETFs and mutual funds. Like a growing number of investment brokers, they also offer crypto trading. However, options trading seems to be a specialty.

Options trading

TradeStation offers advanced options trading that they claim has improved the average price per options contract and execution speed on all covered options market orders of between one and 50 contracts. The stats they give on these improvements are:

• $33,705,251.82 in total price improvements for all equities and options orders in 2022 for TradeStation customers.
• $4.52 average price improvement per options contract in 2022.
• 0.919 seconds average execution speed in 2022 on all covered options market orders between 1 and 50 contracts.

Not only is the trading platform fast and efficient, but TradeStation offers a wealth of data and investment tools to help you improve your options trading game.

Crypto trading

You can trade Bitcoin, Ethereum and USDC on TradeStation's crypto platform, TSCrypto. You can trade crypto from your computer or your smartphone. The platform also enables you to customize the user interface to your own preferences.

You can take advantage of the TradeStation Master Class to help you become familiar with the crypto platform, and how best to use it. That will include in-depth demonstrations of advanced features, like strategy development, testing and technical analysis. You can watch live scheduled webinars to help you learn how the platform works.

Trading Simulator

TradeStation offers its Trading Simulator to help new and intermediate-level investors learn how to successfully trade and to provide a tool to enable more advanced traders to test out different trading strategies. The service also offers backtesting of stocks, options and futures trading strategies.

The Trading Simulator enables you to participate in trades using unlimited paper trading dollars. Unlike many competing brokers that offer virtual trading tools, TradeStation does not put a limit on how much you can trade. That means you can use the simulator as long as you have a funded brokerage account.

Margin trading

If you plan to trade using margin, you'll need to open a margin account. 4:1 leverage is available for day-trading margin accounts, but overnight margin is limited to 50%. A margin account is also required if you engage and short-selling. Margin lending rates start at 13.5%. The minimum required to open a margin account is $2,000.

If you qualify as a pattern day trader, you'll need to maintain a minimum equity position in your margin account of $25,000. (Minimum cash balance requirements do not apply to day trading using cash accounts.)

TurboTax offer

TurboTax tax-preparation software is available to TradeStation customers with a discount of up to 15%. Investment results can be imported directly into TurboTax once year-end statements are available.

TurboTax limits the number of records that can be imported to 2,500 with the install/desktop version, and no more than 500 using the online version, though these limits will only apply to very frequent traders.

Who is TradeStation investing best for?

Because of the many features and tools available on the platform, TradeStation can be a good choice for investors at all levels. But it seems to be designed especially for active traders and options traders.

The platform offers a large number of tools to help advanced traders, so many in fact that it can be overwhelming for a new or intermediate-level investor. However, advanced investors will find an almost limitless supply of tools, many of which are customizable.

The Trading Simulator is a valuable feature for any investor, whether you are a novice or a seasoned professional. Since it offers unlimited virtual cash, you can use it on an ongoing basis to test strategies and improve your trading skills.

TradeStation is not the best platform for crypto investors, since it offers only three currencies. Those are three of the most popular cryptos, so it may be suitable for traditional investors who want to hold a small amount of crypto with their other investments.

It may not be a good choice for mutual fund investors, since they charge a fee of $14.95 per trade. Many competing brokers offer a large selection of no-fee mutual funds. In addition, fixed-income investing --- especially U.S. Treasury securities --- carry high fees, at $50 per trade. If you do open an account with TradeStation, you may want to have an account with another broker offering lower-cost fixed-income investing.

How TradeStation investing compares

If TradeStation isn't the right investing platform for you, consider one of the following alternatives:

Robinhood offers commission-free trading in stocks and ETFs. But where they depart from much of the competition is that they also offer commission-free crypto investing. Robinhood also offers options trading and a high-yield cash account, currently paying as much as 5.00% APY. Both taxable brokerage accounts and IRAs are offered.

The largest banking company in America, J.P. Morgan Chase, offers self-directed investing through J.P. Morgan Self-Directed Investing. You can engage in commission-free trading of stocks, ETFs, options, mutual funds and fixed-income investments in either a taxable brokerage account or a traditional or Roth IRA. If you open a new account — either taxable or an IRA — by July 19, 2024, J.P. Morgan Self-Directed Investing will pay a bonus of between $50 and $700, on deposits of as little as $5,000 to as much as $250,000 or more.

Another excellent option is M1 Finance. It's an online investment platform that provides investment portfolios called "pies" that rebalance automatically with no fees that you might pay to human portfolio managers. You can build multiple pies, which can be filled with up to 100 ETFs and individual stocks. You can either choose the investments yourself or take advantage of one of more than 60 prebuilt portfolios. M1 Finance allows you to create an unlimited number of pies.

Methodology

This review is based on information provided on the TradeStation website, as well as third-party sources providing relevant information. Those third-party sources include FINRA, the Better Business Bureau, Trustpilot and other sources.

TradeStation

View Offer

TradeStation

Min. investment

$0 for cash accounts, $2,000 for margin accounts

Investment offered

Stocks, exchange-traded funds (ETFs), options, futures, futures options, mutual funds, fixed income securities and cryptocurrency

Fees

$0 stock & ETF trades.

$0.60/contract options trades.

$1.50/contract futures trades.

$14.95 mutual fund trades.

Available accounts

Taxable investment accounts; custodial accounts; traditional, Roth, SEP, SIMPLE and rollover IRAs; cash and margin accounts; accounts for trusts, corporations, general and limited partnerships, LLCs and sole proprietorships.

Frequently asked questions (FAQs)

Is TradeStation investing legit?

Yes. TradeStation is a registered broker with the Financial Industry Regulatory Authority (FINRA), and investments on the platform are covered through SIPC for up to $500,000 in cash and securities, including up to $250,000 in cash.

TradeStation has a Better Business Bureau rating of A-, one of the highest offered by that agency. They also have 2.4 out of five stars ("poor") with Trustpilot. However, the mobile app has a rating of 4.5 out of five stars among more than 17,000 iOS users on The App Store, and 3.5 out of five stars among nearly 6,000 Android users on Google Play. All ratings information is as of Jan. 2024.

Is TradeStation investing good for beginners?

It can be, since you can open an account with no money, and participate in trading of most investment asset classes. The Trading Simulator may be especially beneficial for new investors, helping to learn and test trading strategies without risking any money.

Does TradeStation investing charge a monthly fee?

No. There are no monthly fees for using the platform, and no commissions for equity trades.