TradeStation Review (2024)

Our Take

TradeStation, a long-time veteran in the online brokerage industry, continues to be an excellent trading platform for higher-volume traders. The platform has many tools for traders, including the ability to backtest strategies and quickly identify potential trading opportunities. Experienced traders will like the ability to customize their platform and test various trading strategies. TradeStation has made an effort to provide more trader support and guidance to assist its less experienced traders, but the platform still skews heavily towards high-volume trading. Compared to other brokers, however, TradeStation’s fees are on the high end, and even include inactivity fees that many brokers have eliminated.

Introduction

TradeStation was created in 1982 to develop next-generation trading tools. The company offered charting services and the ability to connect directly to brokers to execute different trades in different markets. The company provided traders with backtesting capabilities as early as 1987, gave traders a system language to customize their own trading in 1989, and launched its flagship, TradeStation, in 1999.

TradeStation continues to be a sought-after platform for high-volume traders who want control over their orders and other precision timing tools, including excellent charting and a very extensive data collection of past markets to analyze. Today, TradeStation remains true to this constituency but has also made strides to welcome newer traders and investors with smaller account sizes.

Pros & Cons

Pros Explained

• Professional trading platform: TradeStation has world-class trading technology, including excellent order routing, the ability for customers to route their own orders, the ability to group studies so they automatically update information on the same symbol, and advanced orders—all on a very intuitive platform, considering its complexity.
• Backtesting, automation, and simulation available: TradeStation was one of the earliest brokers to offer backtesting strategies. In addition, TradeStation also offers simulated trading to test new strategies before trying them in the real market. Finally, you can automate trading strategies on TradeStation using more than 175 technical and fundamental criteria.
• Good trade execution and order routing control: TradeStation is popular with high-volume traders because they can control their orders and get good execution through TradeStation’s order routing system.
• Competitive pricing: Most traders will be satisfied with TradeStation’s commission-free stock and ETF trading, even though options prices are still $0.60 per contract. Higher-volume traders who may want to route their own orders will find reasonable rates and fees with TradeStation.

Cons Explained

• Intimidating to new users: TradeStation’s professional-level platform has great features, but it can be intimidating to less sophisticated users. Like any program, there is a learning curve for getting set up and using the system, and additional time is needed to learn more advanced features. That said, the system is still pretty intuitive, especially for basic trading.
• No no-transaction mutual funds: TradeStation is not a great option for mutual fund investing. The platform is geared more towards traders. As a result, there are no no-fee funds available, and trades need to be made with a broker.
• No cryptocurrency trading: TradeStation no longer supports cryptocurrency trading
• Unavailable features: Features such as dividend reinvestment programs (DRIPs), fractional share trading, cash management features, and retirement/event planning tools are not available on TradeStation.
• Paltry return on excess cash: TradeStation pays just 0.15% interest on cash balances of $5,000 or more. While this rate may be negotiable for large accounts, this is a low rate of return compared to what some other brokers offer.

Usability

TradeStation is easy to get up and running on, and the account opening process can be completed in a single day. The TradeStation website is easy to navigate to learn about the company’s products and their costs. In addition, access to educational content is available for new and seasoned users to learn about trading and the platforms. Once on the various platforms, navigating is relatively straightforward, even though the platform has many bells and whistles.

TradeStation offers customers multiple platforms, including its flagship TradeStation 10 desktop platform, a web-based platform that has most of the functionality of the desktop software, and a full-featured mobile app for iOS and Android. All platforms provide real-time news and streaming data, support drawing tools on charts, and allow the creation of custom watchlists. Trading is also intuitive on all platforms.

Trade Experience

The trading experience on TradeStation is good. The platform offers tremendous flexibility and advanced tools. It is designed to be easy to navigate and use intuitively. Users can easily go from researching fundamentals and technicals for an issue to trading, where they can set defaults for position size.

TradeStation is also very easy to customize. The platform is designed with a series of built-in apps that users can choose to utilize or not. Some of the apps available from TradeStation include Chart Analysis, Hot List, Radar Screen, Matrix, Time and Sales, TradeManager, and OptionStation Pro, to name a few.

In addition to TradeStation’s apps, there are multiple third-party apps on the platform that the user can choose to incorporate. Another helpful feature is the ability to link some of the apps together so that when you change the symbol, it updates the information for all of the linked apps. This is a nice feature that saves users time and allows them to see all of the information on a particular symbol at once without having to update each app window separately.

All of TradeStation's platforms offer real-time data and news feeds, and trading and order management can be done directly from charts or with keyboard shortcuts. The Matrix app allows for one-click limit orders that are fast and easy to use. It combines market depth, advanced order entry, and order tracking in a single window that the user can customize to their liking.

Unlike some online trading platforms, TradeStation supports the staging of orders, and advanced users can create sophisticated order entry and trade management algorithms. While the platform can be intimidating because of all its features, less experienced traders should be able to smoothly follow the navigation to access and utilize the functionality they need.

Mobile Trade Experience

TradeStation’s mobile app is available for both iOS and Android phones and supports trading in stocks, options, futures, and options on futures. The mobile app also provides streaming quotes and news by Benzinga and also supports biometric screening by fingerprint or facial recognition.

Watchlists can be shared across the different platforms. As with the desktop version of TradeStation, the home screen can be customized to show the information you want to see, such as balances, positions, hotlists, a watchlist, or alerts.

Clicking on any of the symbols allows the user to see charts and access order entries, which can be done directly from charts or simply by clicking on the green trading button at the top of the screen. Users can also quickly bring up options for the symbol they are looking for. Although there is plenty of functionality available, the mobile app is intuitive to use, and it is easy to transact and monitor positions.

Range of Offerings

Tradestation offers multiple markets to trade on its platform, but there are some notable gaps in what it offers. Currently, TradeStation offers the following markets:

• U.S. equities and ETFs
• Options on U.S. equities and ETFs
• OTC stocks
• Futures
• Options on futures
• Mutual funds (broker assistance required)
• Fixed income (broker assistance required)

It’s important to note that TradeStation previously supported the trading of cryptocurrencies through TradeStation Crypto, but the company withdrew from the cryptocurrency market following an SEC investigation related to an unregistered interest-bearing cryptocurrency product. Tradestation settled with the SEC for $3 million and has subsequently sold TradeStation Crypto to Kraken, the large crypto exchange. TradeStation stopped its cryptocurrency offering on February 22, 2024.

Order Types

TradeStation supports multiple order types and enables users to customize their orders to include conditional orders and orders that utilize both technical and fundamental data points. TradeStation supports market, limit, stop market, stop limit, and trailing stops. If touched orders are sent, one cancels the other (OCO), and the other sends OSO orders. These order types are available on all TradeStation platforms.

Trading Technology

Advanced users and high-volume traders can utilize some impressive technology at TradeStation, and the technology can be used by newer traders, too. TradeStation’s popularity with high-volume traders is because of its technology offerings.

The first priority for the high-volume trader is order routing, and TradeStation has its own excellent order routing technology. In addition, users have the option to route their own orders on TradeStation. TradeStation’s recent statistics show that its routing technology improved price per share by an average of $1.99 per share filled for all market equity orders. For options, the average price improvement was $5.0786 per order. These price improvements are why some traders prefer to pay commissions and fees, but the technology benefits commission-free customers, too.

Other impressive technology at TradeStation includes its easy-to-use language for customizing trading algorithms that help traders automate their strategies. Along with this, TradeStation offers complimentary technology for backtesting strategies against its comprehensive historical data files. Rounding this out is the ability to trade in a simulated environment against real-time data to hone skills and test strategies. TradeStation also offers a trading journal but does not support dividend reinvestment plans (DRIPs) or fractional share trading.

Costs

TradeStation has a more complicated cost structure than some of the other brokers, but this is primarily because it serves customers who want to control their own order routing. However, the company now has a hybrid approach to its cost structure. Aside from trading costs, however, we found TradeStation's fees for services to be on the high side.

Also, unlike many other online brokers, TradeStation may charge for the use of its trading platform for customers without a brokerage account with the company and inactive accounts. For accounts in excess of $500,000, TradeStation would be willing to discuss customized pricing plans, which could include negotiations for commissions, margin, and return on excess cash.

Here is a breakdown of the cost to trade various market vehicles at TradeStation and some of the fees charged:

• U.S. stocks, ETFs, and OTC stocks: Under the TS SELECT plan (only available in the U.S.), zero commission for up to 10,000 shares traded if the trading price is above $1.00 per share. If more than 10,000 shares are traded under this plan, there is a commission of $0.005 per share, with no maximum. Shares trading below $1.00 per share and OTC shares generate a commission of $0.005 per share, with a minimum charge of $1.00 and a maximum charge of $50; both of these commission rates are subject to a cap of 5% of the notional value of the order. Direct-routed equity orders incur an additional commission of $0.005 per share.
• Options: $0.60 per option for stocks and ETFs. Index options pay a commission of $1.00 per contract, and direct-routed options orders are subject to a $1.00 per share fee.
• Futures: $1.50 per contract, per side for futures; $0.50 per contact, per side for micro futures
• Options on futures: $1.50 per contract, per side
• Mutual funds: $14.95 per trade, which needs to be done with a broker
• Fixed Income: $50 per trade for U.S. Treasury securities; $14.95 per trade for corporate and municipal bonds, plus $5 per bond. Note also that corporate and municipal bonds are only accepted as closing transactions.

Select fees at TradeStation include:

• Outgoing wire: $25
• Outgoing account transfer: $125
• Early assignment/early exercises: $1.50 per contract, with a $5.95 minimum
• Inactivity: $10 per month if the account does not maintain a minimum average balance of at least $5,000 over a 90-day period or does not make at least 10 trades during the 90-day period
• Platform fees: No charge for TS Select, $5 per-trade, or $1.50 single-tier futures brokerage account. Other TradeStation brokerage account payment plans pay $149.95 per month if minimum activity is not met (minimum activity is defined as 10 round turn futures and/or futures options contracts, or 50 options contracts, or 5,000 shares traded, or an average account balance of at least $100,000. Note that per share, per trade commission schedules are those accounts funded before March 3, 2017). If you use the TradeStation platform without a brokerage account, the platform fee is $99.99 per month for non-professionals and $199.99 for professionals. For those without a brokerage account with TradeStation, there is a $59.95 per month fee for Portfolio Maestro, TradeStation’s backtesting tool.

How This Broker Makes Money From You and for You

Brokerage companies generate revenue in multiple ways, and sometimes the customer gets benefits, too. One of the most common ways brokerage companies offset the cost of offering customers commission-free stock and ETF trading is through payment for order flow, but there are other items, too.

• Interest on cash: TradeStation generates a great deal of interest income through its use of customers' excess cash positions. TradeStation pays its customers just 0.15% on excess cash balances, allowing TradeStation to benefit from the difference in where they can invest that excess cash over the 15 bp given to clients. In today’s high-interest-rate world, that is a real windfall for TradeStation.
• Payment for order flow: TradeStation also generates income through payment for order flow. When clients trade without specifying routing instructions, it provides an opportunity for TradeStation to generate payment for order flow. Customers who route their own orders generate commission revenue for TradeStation.
• Price improvement: Price improvement shows how well the broker is able to execute orders and can be thought of as savings for customers. Even with payment for order flow, TradeStation does an excellent job routing orders for efficient order fills. It improved the price per share by an average of $1.99 per share filled for all market equity orders it filled in the first quarter of 2024. For options, the average price improvement was $5.0786 per order.
• Stock loan programs: With stock lending, investors who own stocks give permission for those stocks to be lent out to people with short positions. Some brokers keep all of the revenue generated from this activity, and some share the income with customers. TradeStation keeps 70% of this revenue and gives investors 30% of the revenue generated if they agree to participate in the stock lending program.
• Commissions: TradeStation charges commissions to some of its customers who exceed certain trading sizes or want to route their own orders. It also generates commissions on futures, options on futures, options on stocks and ETFs, bonds, and mutual fund transactions.

Account and Research Amenities

Tradestation offers research information to clients on the platform, but it is not qualitative research. Instead, it offers fundamental and technical information that can be used for trading. TradeStation also provides a number of research tools, such as screeners, tools, news, charting, and calculators. We will go over some of these features and tools individually.

Stock and ETF Screeners

TradeStation offers some nice stock and ETF screening tools. The Scanner app can scan thousands of issues on more than 175 technical and fundamental criteria. TradeStation’s RadarScreen sorts stocks and ETFs based on specific indicators of the user’s choosing.

RadarScreen can provide alerts on hundreds of symbols at the same time. TradeStation also makes a hotlist available, which shows traders technically significant issues such as breaking 52-week highs or lows, opening gaps, and volatility. TradeStation’s screeners for stocks and ETFs are very strong.

Options Screeners

OptionsStation Pro is TradeStations' top options trading tool. It allows users to create and analyze various options strategies, and the platform provides a visual representation of different options changes and their potential expiration dates.

Traders can utilize the various hotlists to identify a potential stock or ETF to trade options on. Then, the trader can use OptionsStation Pro to determine the best options strategy for their viewpoint. Screener results can also be converted to a watch list.

Mutual Fund Screener

TradeStation offers a mutual fund screener that can help identify funds, but it is not a particularly robust offering. This is not surprising, considering TradeStation customers are not typically buy-and-hold mutual fund investors. Further, mutual fund trading requires the assistance of a broker at TradeStation, and the company does not offer any no-fee mutual funds.

Fixed-Income Screener

Similar to mutual funds, TradeStation only offers a basic fixed-income screener to help investors find potential investments. Trading fixed income at TradeStation requires broker assistance, so active fixed-income traders would likely look at other platforms to trade this asset class.

Tools and Calculators

TradeStation provides some very helpful trading tools, such as time and sales, market depth, news, and research, that provide fundamental and technical indicators. However, these helpful tools are geared more toward traders than more passive investors. TradeStation does not offer as many analytical tools for portfolio management, retirement, or event planning that longer-term investors and other less active traders may be interested in.

TradeStation will have to add more tools and calculators, especially for the less sophisticated traders it wants to add to its platform, even if the trading tools are strong.

Trading Idea Generator

TradeStation does not have a specific idea generator, but the platform’s various filtering and lookup criteria, including the hotlists and other filtering tools, can help traders identify potential trading opportunities. TradeStation customers can also access VectorVest, which provides simple buy, sell, or hold ratings for more than 16,000 stocks and ETFs via API directly from the TradeStation website, for a fee.

News

TradeStation offers customers free news from multiple sources, with Benzinga appearing to be a primary source for news provided on the platform. The news feature can be customized by the user, as it allows users to filter based on individual stocks or news types.

Charting

The charting functionality on TradeStation is excellent. In addition to the many different technical studies available in real time, traders can trade directly from charts on the desktop or mobile platform by moving the mouse on the background of a chart. Further, TradeStation’s charting has an easy-to-use toolbar that allows users to quickly change time frames, drawing tools, and more.

Users can also drag and drop target levels directly to charts. The charting functionality also integrates very well with the order entry system. TradeStation’s charting is one of the best online broker charting systems available.

Cash Management

TradeStation does not offer cash management solutions. There are no banking-related amenities, such as check writing, automatic bill pay, or similar services. TradeStation only pays a very small interest rate, currently 0.15%, on cash balances if the account has at least $100,000. These are amenities TradeStation may want to consider adding if it is serious about attracting less experienced traders to its platform. Not paying interest on cash may not have made a big difference to traders when interest rates were at zero, but there are competing brokerage firms that pay significantly more than 15 bp on cash balances.

Fractional Dividend Reinvestment Plan (DRIP)

TradeStation does not support fractional dividend reinvestment plans. While this may not be as important to high-volume traders, the lack of a dividend reinvestment program may turn away less active traders.

SRI/ESG Research Amenities

TradeStation does not provide any tools to help customers identify socially responsible investment (SRI) opportunities or to help users find investment opportunities meeting environment, social, or governance criteria.

Portfolio Analysis

TradeStation offers a free app called Portfolio Maestro to assist clients with portfolio analysis. This third-party app is accessible directly from TradeStation and allows traders to backtest and analyze the performance of their trading strategies.

Education

TradeStation has made an effort to improve its educational offerings as part of its desire to attract customers beyond its active trading clientele. As part of this, TradeStation offers educational content in multiple ways, including through articles, videos, webinars, and live events/seminars.

The learning page is set up for ease of use, with separate links to content for those new to trading. It covers how to use TradeStation, market insights, support forums, retirement planning, an overview of the different platforms, and an options education center. There is also a decent FAQ section. The trading simulators on TradeStation are also very helpful educational tools as new traders get up to speed and can be used in conjunction with backtesting to see how your strategies would have performed.

The trader education pieces are managed through an affiliate called YouCanTrade, which allows users to ask questions and interact with coaches. While this content is available and helpful, TradeStation’s educational content is still not as strong as some other brokers' offerings.

Customer Service

Customer service from TradeStation is hit or miss, especially on how long you may wait for a representative to help you. You can speak with a broker, but their assistance is largely for platform use issues and for trading in fixed income or mutual funds. Users do not have access to investment advisors.

Customer service is available in multiple ways, including:

• Live chat, Monday to Friday from 8 a.m. to 5 p.m. ET (there is also a live chat option for international customers)
• Email
• Access to phone support Monday to Friday from 8 a.m. to 5 p.m. ET
• Frequently Asked Questions (FAQ) section
• Trading desk support for placing trades, inquiring on positions, and margin inquiries

Security and Reliability

TradeStation is a secure and reliable platform and offers the following security features for account holders:

• Two-factor authentication, including the use of biometric fingerprint or facial recognition for mobile apps
• Lloyd’s of London insurance that goes beyond SIPC insurance protection
• Account monitoring and alerts when changes are made to account profiles
• Encrypted communications and website
• Advanced firewalls

Available Account Types

TradeStation allows customers to open a broad range of accounts, including taxable and non-taxable accounts for individual users. Often, both cash and margin accounts are available with these account options. TradeStation supports multiple account types, including individual and joint accounts, retirement accounts, and entity accounts for businesses. Here is a listing of the account types available on TradeStation:

• Individual accounts
• Joint accounts with right of survivorship
• Joint tenants in common
• Custodial accounts
• Trusts
• Corporations
• General partnerships
• Limited partnerships
• Limited liabilitycompanies
• Sole proprietorships
• Traditional IRAs
• Roth IRAs
• SEP IRAs
• Simple IRAs
  

The Bottom Line

TradeStation is an excellent broker that offers a lot to advanced users who want to take advantage of good trade routing and order execution with other advanced features such as backtesting, algorithmic automation of trading, and a simulator that can help test strategies before being employed in the real trading market.

Furthermore, TradeStation is a good choice for higher-volume traders with accounts in excess of $500,000 because traders get better rates starting at that level. But however much it has added to its platform to support less experienced traders—and it has added a good deal of content to assist them—TradeStation may still lack certain amenities an average trader who is not working as a trader full-time would like to see.

These missing features include fractional share trading, a decent return on cash balances, possibly banking and bill payment features, better portfolio management and planning tools, and a dividend reinvestment plan.

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