The basic vs. the dynamic: learn which platform is right for you
By
JeFreda R. Brown
:max_bytes(150000):strip_icc()/Dr.JeFredaR.Brownheadshot-JeFredaBrown-1e8af368a1ea4533a21868d8a951895a.jpg "Robinhood vs. E*TRADE 2024 (1)")
Full Bio
Dr. JeFreda R. Brown is a financial consultant, Certified Financial Education Instructor, and researcher who has assisted thousands of clients over a more than two-decade career. She is the CEO of Xaris Financial Enterprises and a course facilitator for Cornell University.
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Updated June 25, 2024
:max_bytes(150000):strip_icc()/ScreenShot2021-08-31at3.01.52PM-744bc1bd7ef44b808d569b95d7d14936.png "Robinhood vs. E*TRADE 2024 (2)")
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Originating in 1982, E*TRADE was one of the first online discount brokers with the goal of providing an online platform for retail investors to trade without broker assistance. Since being acquired by Morgan Stanley in 2020, E*TRADE has continued to enhance its trading platforms and user experience. Robinhood was formed in 2013 with the purpose of leveraging technology to provide working Americans with accessible trading opportunities without high trading commissions.
Robinhood has also been enhancing its trading experience, but it is building from a more streamlined overall offering. Robinhood's biggest moves in 2024 have been retooling margin and margin rates to compete for the lowest in the industry. Robinhood and E*TRADE are popular choices for investors who prefer mobile trading and the investors they target are starting to overlap. We'll look at some of the key differences between E*TRADE and Robinhood to help you determine the best broker for your investing needs.
- Account Minimum: $0
- Fees: $0 commissions for stock, ETF, options, and cryptocurrency trading
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- Account Minimum: $0
- Fees: No commission for stock, ETF, and mutual fund trades. Options are $0.50-$0.65 per contract, depending on trading volume.
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Usability
E*TRADE offers multiple trading platforms to meet the needs of investors with various levels of trading experience. Investors have access to desktop, website, and mobile platforms. The website has a detailed offerings layout and user-friendly functionality. Investors can access real-time streaming stock quotes, stage orders for later entry, and trade directly from price charts on each platform.
Additionally, investors have a wide range of customization options on each platform. Robinhood’s website is more streamlined. Robinhood has partnered with NASDAQ to provide investors with access to real-time streaming stock quotes on both platforms.Robinhood offers website and mobile app platforms, both of which have similar layouts. While both platforms are customizable, the options at Robinhood pale in comparison to those offered by E*TRADE.
Although all of E*TRADE’s trading platforms contain a wide range of information and tools for investors, the desktop platform may be a bit overwhelming for new investors. E*TRADE has multiple investing offerings and a robust collection of analysis tools and resources, while Robinhood provides more simplistic platforms and resources.
Usability Verdict: Tie
Both platforms are easy to use and learn, but more assets and capabilities are packed into E*TRADE. E*TRADE does a good job of segmenting experiences according to investor type, making it a better option for more active traders and experienced investors. Robinhood is still very easy to use and is probably more than enough for newer investors.
Trade Experience
Desktop Trade Experience
Robinhood and E*TRADE both offer different trading experiences through their various trading platforms. E*TRADE offers investors the E*TRADE website platform and a downloadable desktop platform, Power E*TRADE. The layouts of these two platforms are smooth and have user-friendly functionality. Robinhood offers a website platform with user-friendly functionality but lacks the range of information, tools, and resources that E*TRADE provides.
E*TRADE offers multiple order types on the website and desktop platforms. One difference to note here is that investors can trade more assets on E*TRADE’S website platform than they can on the desktop platform. Debt instruments and mutual funds aren't available in Power E*TRADE. While many traders won't notice the gap, you can end up having to use multiple platforms to manage investments across all the tradable assets.
Robinhood has the advantage in offering investors access to trade the same amount of assets on its website and mobile app platforms, but there are fewer asset types overall. We did find that charting and the availability of indicators has improved across Robinhood's platforms. Robinhood has made recent strides to improve its trading experience; however, many years of powerful enhancements by E*TRADE in this area have it leading comfortably.
Desktop Trade Experience Verdict: E*TRADE
While Robinhood’s desktop platform is better for passive and new investors, E*TRADE’s platforms are suitable for investors at any level.
Mobile Trade Experience
While Robinhood’s mobile app platform doesn’t have the number of diverse features that E*TRADE’s mobile platforms have, it is a popular choice for investors who prefer mobile investing. E*TRADE did something smart in offering investors a mobile app as a companion to each of its desktop platforms. Investors who use the E*TRADE website also have access to the E*TRADE Mobile app, and Power E*TRADE users have access to the Power E*TRADE app.
Investors can access real-time streaming stock quotes on E*TRADE’s and Robinhood’s mobile platforms. Robinhood announced the rollout of its customizable advanced charts tool in August 2022. The advanced charts tool has seven technical indicators and is available on the mobile and website platforms.
A disadvantage of Robinhood’s charting tool is that it doesn’t have a drawing tool for the mobile platform. E*TRADE offers a drawing tool in its mobile platforms’ charting tool. Portfolio reports are available on both Robinhood’s and E*TRADE’s mobile platforms. E*TRADE offers screeners on its mobile platforms that are far more robust than Robinhood's stock screener.
Mobile Trade Experience Verdict: E*TRADE
Although Robinhood is working to enhance its research and trading tools, E*TRADE is the clear leader in providing the best mobile trading experience for investors of all trading experience levels.
Range of Offerings
Robinhood only offers stocks, exchange-traded funds (ETFs), options, and cryptocurrencies. Robinhood offers fractional shares trading for stocks and ETFs and fractional crypto trading. Additionally, Robinhood’s customers can choose to have their dividends from stocks and ETFs automatically reinvested. Short selling is not allowed on Robinhood.
E*TRADE offers customers several asset classes including stocks, ETFs, mutual funds, bonds, CDs, options, futures, currencies, penny stocks, and OTC. E*TRADE customers can only sell fractional stock and ETF shares; they cannot buy fractional shares. E*TRADE offers short sales with over 21,000 stocks on the easy-to-borrow list. Although E*TRADE doesn’t offer direct crypto trading, customers can trade BTC-CME Bitcoin Futures.
E*TRADE is the clear winner in this category because of the number of asset classes available to customers. One disadvantage is that all asset classes are not available in all trading platforms. Another disadvantage is that customers can only sell fractional shares. Robinhood is the best option for investors on a budget or looking to test the investing waters because of the ability to trade fractional shares of all available asset classes on both trading platforms.Robinhood is also making itself attractive to cryptocurrency investors with its Robinhood Wallet and June 2024 purchase of a global crypto exchange.
Range of Offerings Verdict: E*TRADE
E*TRADE has a wider range of assets despite some drawbacks in terms of fractional share trading and lack of direct cryptocurrency trading. For investors looking for these specific things, Robinhood's overall smaller range of offerings may be easy to overlook.
Compare Range of Offerings
| E*TRADE | Robinhood | |
|---|---|---|
| Short Sales | Yes | No |
| Number of No-Load Mutual Funds | 6,310 | N/A |
| Assets Available to Trade on Website | Stocks, mutual funds, ETFs, bonds, CDs, options, futures, currencies, OTC | Stocks, ETFs, options, OTC, cryptocurrencies |
| Max. Number of Options Legs | 4 | 4 |
| Robo Advisory | Yes | No |
| Number of International Exchanges | 0 | 0 |
| Fractional Share Trading | Yes | Yes |
| Fractional Dividend Reinvestments | Yes | Yes |
Order Types
Robinhood doesn’t offer nearly as many order types as E*TRADE. Robinhood offers different order types for each asset class. For cryptocurrencies, limit, market, stop order, and stop limit orders are available on Robinhood. For options, limit, stop limit, and stop market orders are available. For stocks, market, limit, stop, stop limit, and trailing stop orders are available. Some stocks can be placed as good-for-day (GFD) or good-til-canceled (GTC) orders.
E*TRADE offers various order types, but not all order types are available on each trading platform. All the standard order types are available including market, limit, stop limit, and trailing stop, but these are joined by a wide range of conditional orders that traders expect on the web and desktop platforms.
Order Types Verdict: E*TRADE
E*TRADE is the clear leader in order types because of the larger selection across all platforms.
Trading Technology
Both Robinhood and E*TRADE disclose information publicly about how they make money and their order execution processes. Both brokers receive payment for order flow (PFOF), and both brokers have proprietary order routing systems. Many of E*TRADE’s orders are spray-routed, and customers can direct orders to desired venues. E*TRADE routes orders to various markets to obtain the best execution. Robinhood routes orders to markets that will result in the best execution, and orders are executed at the National Best Bid and Offer (NBBO) or better.
E*TRADE reports that 96.72% of S&P 500 share orders are executed at or better than NBBO, with an execution speed of 0.11 seconds. The average price improvement is $10.18 per order. Robinhood reports 95.62% of shares are at or better than NBBO, with a net price improvement of $2.77 per 100 shares. This isn't apples-to-apples, but we estimate in the time period examined that E*TRADE had a per-share price improvement of $0.0092 versus $0.0147 at Robinhood. In terms of PFOF, E*TRADE collected less at $0.0014 per share than Robinhood's $0.00499 per share.
Trade Technology Verdict: E*TRADE
Despite the outperformance by Robinhood in price improvement, we give E*TRADE the edge because It offers more advanced order routing systems.
Costs
Both Robinhood and E*TRADE offer commission-free (base commission) trading for U.S. listed stocks, ETFs, and options. E*TRADE also offers commission-free trading for U.S. Treasury bonds and no-load mutual funds. E*TRADE charges $0.65 per options contract for up to 29 trades per quarter and $0.50 per contract for more than 30 trades per quarter. E*TRADE charges a base commission fee of $6.95 (under 30 trades) and $4.95 (over 30 trades) for OTC securities such as penny stocks. E*TRADE charges $1.50 per contract per side plus additional fees for futures, and $2.50 per contract per side plus additional fees for cryptocurrency futures.
Robinhood’s margin rate is 6.75% up to $50,000, dropping to 6% over $1 million. Gold subscribers get $1,000 in margin at no interest as part of the $5 per month subscription, which also unlocks a higher rate of interest on uninvested cash. E*TRADE’s margin rates are much higher, with balances up to $10,000 at 14.20% and balances over $100,000 at a 12.7% margin rate. Investors should be aware that the brokers can change margin rates at their discretion. E*TRADE provides cost savings for investors seeking no-load mutual funds and U.S. Treasury bonds.
Costs Verdict: Robinhood
Although it doesn’t have a vast number of offerings like E*TRADE, Robinhood is the overall leader in cost savings for trading. The commission-free options and crypto already stand out, but the extremely competitive margin rates may be enough to tempt casual traders to accept simplicity in exchange for no-fee trading.
Compare Costs
| E*TRADE | Robinhood | |
|---|---|---|
| Volume-Based Options Discounts (Upon Meeting a Threshold) | Yes | N/A |
| Recurring Investment Fees | No | No |
| Options Price Cap (Upon Meeting a Threshold) | No | N/A (commission-free options) |
| Option for No Base Commission for Trading Penny Stocks | No—users must pay base commission to trade penny stocks | Yes |
| Option for No Base Commission for Stocks and ETFs | Yes | Yes |
| Inactivity Fees | No | No |
| Cost Per Stock Trade | $0 | $0 |
| Cost Per Options Contract | $0.65 | $0 |
| Cost Per Futures Contract | $1.50 | N/A |
| Broker-Assisted Trade Fee | $25 | N/A |
| Base Commission for Options | No | No |
| Account Closure Fee | No | No |
Account and Research Amenities
Robinhood’s research tools are quite limited in comparison to E*TRADE’s offering of research tools. While E*TRADE offers customers access to free proprietary and third-party research, Robinhood doesn’t offer proprietary research but offers its Gold subscribers third-party research for a fee. Robinhood’s Gold subscribers have access to research from Morningstar and Nasdaq Level II Market Data. E*TRADE’s customers have access to multiple third-party research sources, including Moody’s, Argus Research, and Morningstar. Robinhood doesn’t do much beyond its basic stock screener, but E*TRADE offers screeners for stocks, ETFs, mutual funds, options, and fixed income.
Robinhood doesn’t offer trading idea generators but does offer market research reports and charting tools. E*TRADE offers several trading idea generators such as TradeLab and the Social Sentiment Tool and offers market research reports in addition to robust charting tools. One area where Robinhood comes out ahead is in a higher interest rate on uninvested cash.
Account and Research Amenities Verdict: E*TRADE
E*TRADE far exceeds Robinhood in this category because of the diverse research amenities that are available for its customers.
Compare Account and Research Amenities
| E*TRADE | Robinhood | |
|---|---|---|
| Portfolio Margin Available | Yes | Yes |
| Ability to Choose and Offer Shares Held Long to a Loan Program | Users can offer shares but cannot choose the stocks to loan | Users can offer shares but cannot choose the stocks to loan |
| Interest Earned on Uninvested Cash | Varies by balance, 0.01-0.15% APY | 1.50% APY (5% for Gold subscribers) |
| Uninvested Cash Automatically Swept Into a Money Market Fund | Yes | Yes |
| Screeners Offered | ESG/SRI, stocks, ETFs, options, mutual funds, fixed income, crypto assets | Stocks |
| Ability to Build Custom Screen | Yes | Yes |
| Ability to Screen Based on Technical Indicators | Yes | Yes |
| Ability to Save Custom Screens | Yes | Yes |
| Access to Proprietary Research | Yes, at no additional cost | No |
| Access to Third-Party Research | Yes, at no additional cost | Yes, with additional cost |
| Ability to Turn Screen Results Into a Watchlist | Yes | No |
| Trading Idea Generator Offered | Yes | No |
| Daily Market Research Reports Offered | Yes | Yes |
Portfolio Analysis
Robinhood’s portfolio analysis tools are minimal and simplistic in comparison to E*TRADE’s tools. E*TRADE has multiple portfolio analysis tools including TradeLab and LiveAction. Both Robinhood and E*TRADE have a sector allocation monitor, which allows investors to conduct portfolio tracking. E*TRADE customers also have access to life-stage planning tools.
Portfolio Analysis Verdict: E*TRADE
E*TRADE is the better choice for investors who are more active and need more portfolio analysis tools.
Education
Robinhood’s educational resources focus on providing basic information for newer investors to develop a good investing foundation. Robinhood Learn is a library of investing education where you can learn about the basics of investing, various investing terms, financial literacy, taxes, entrepreneurship, and more. Educational content is in the form of articles, videos, and in-app course modules. Robinhood Snack is a three-minute newsletter that is emailed to subscribers weekly. The newsletter contains short paragraphs and bullet points about current business and financial news.
E*TRADE Insights is fully dedicated to providing educational content for investors of all experience levels. Educational content is provided through articles, videos, webinars, virtual learning environments (VLEs), and in-platform education. A bonus is that E*TRADE customers now have access to Morgan Stanley's Thought Leadership, which includes market analysis and research from Morgan Stanley’s experts.
Education Verdict: E*TRADE
E*TRADE has the edge in education. E*TRADE has a more robust education platform to offer its customers, owing in part to its integration with Morgan Stanley.
Customer Service
Robinhood only offers customer support through its website or via the mobile app. Non-customers can access support through the website, which is mainly FAQs and a help center containing details about various topics. Robinhood customers can contact support directly after logging into their accounts on the website or mobile app platforms. E*TRADE provides support by telephone but informs customers that wait times are longer than usual and encourages customers to use self-help options, including FAQs. E*TRADE branches are now closed, so customers cannot receive help in person.
Neither Robinhood nor E*TRADE provides easy access to customer support. Robinhood does provide customers access to live customer support after logging into their accounts. Support is available through live chat, but telephone support only comes in the form of an in-app callback feature.
Customer Service Verdict: Robinhood
Robinhood edges E*TRADE out in the category by providing a live chat feature for customers.
Security
E*TRADE and Robinhood offer two-factor authentication and encryption on all their trading platforms. Both brokers also offer biometric logins on their mobile app platforms. Robinhood experienced a highly publicized outage on both platforms in March 2020. On November 3, 2021, Robinhood experienced a data security breach. E*TRADE noticed unusual volumes in GME and AMC in January 2021 and decided to limit trading activity in these areas to prevent any outages and to continue providing services for all customers. Neither broker has reported a serious incident in the period we examined.
E*TRADE has a dedicated security center where detailed information is provided about its security procedures for protecting customers’ accounts and assets. Robinhood and E*TRADE customers’ assets are protected by the SIPC for up to $500,000 for (including $250,000 for cash).
Security Verdict: Tie
E*TRADE and Robinhood are both up to industry standards when it comes to security. Although they've had incidents in the past, we didn't find anything of concern in the period we examined.
The Bottom Line
E*TRADE and Robinhood have a fairly large gap when it comes to capabilities, but this can be much smaller if you are inclined to simple, affordable investing. E*TRADE is a stronger option for most investors and traders, provided you actually take advantage of all the extras it piles in. E*TRADE provides a more diverse collection of asset classes, trading tools, and research capabilities thanks to consistent enhancements and the acquisition by Morgan Stanley.
Robinhood provides better trading cost savings and fractional shares trading, which may be more appealing for investors who have limited funds to invest. Robinhood is more popular with new investors in various age groups, but traders will see the tool limitations and lack of short selling as serious barriers.If you are looking for cryptocurrency, however, Robinhood is making a big push to be your broker. For pretty much everything else, E*TRADE does it better even though it costs nominally more for some investments like options trading.
How We Picked the Best Online Brokers and Trading Platforms
Providing readers with unbiased, comprehensive reviews of online brokers and trading platforms is a top priority for Investopedia. We combined our industry research, subject matter expertise, and investor survey data to guide the research and weightings for our 2024 online broker awards. To collect the data, we sent a digital survey with 110 questions to each of the 26 companies we included in our rubric. Additionally, our team of researchers verified the survey responses and collected any missing data points through online research and conversations with each company directly. The data collection process spanned from Feb. 19 to March 19, 2024.
We then developed a proprietary model that scored each company to rate its performance across 11 major categories and 89 criteria to find the best online brokers and trading platforms. The score for each company’s overall star rating is a weighted average of the criteria in the following categories:
Additionally, during our 2024 research, many of the companies we reviewed gave us live demonstrations of their platforms and services via video conferencing methods and also granted our team of expert writers and editors access to live accounts so they could perform hands-on testing.
Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of the top online brokers and trading platforms.
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E*TRADE. “Buy Options.”
E*TRADE. “Investing & Trading FAQ.”
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Robinhood. “Stock, ETF, and Options Order Routing.”
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Robinhood. "Robinhood Announces Data Security Incident (Update)."
E*TRADE. "Security Center."
E*TRADE. "Asset Protection."
Robinhood. "How You're Protected."
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