Have you ever wondered if you could trade stocks, ETFs, or even mutual funds without paying a cent in commissions? If you're considering ETRADE as your brokerage, you're in for some excellent news when it comes to commission-free trading. Let's dive deep into ETRADE's fee structure and discover just how many free trades you can truly enjoy.
Understanding the E*TRADE Fee Structure: More "Free" Than You Think!
In today's competitive brokerage landscape, many platforms have moved towards a commission-free model for common investments. E*TRADE, a business of Morgan Stanley, is no exception. They offer a very attractive pricing structure that caters to a wide range of investors, from beginners to active traders. The key takeaway? For many popular investment types, you'll pay $0 in commission for online trades.
This guide will break down exactly what falls under the "free" umbrella and what might incur a small fee.
Step 1: Discovering the World of E*TRADE's $0 Commission Trades
Ready to start trading without the burden of commissions? This is where E*TRADE truly shines for the average investor.
Sub-heading 1.1: Stocks and Exchange-Traded Funds (ETFs)
Unlimited Online US-Listed Stock Trades: Yes, you read that right! E*TRADE charges $0 commission for online trades of US-listed stocks. This means you can buy and sell shares of companies like Apple, Tesla, or Amazon as many times as you like, without a per-trade commission fee eating into your profits.
Unlimited Online ETF Trades: Similar to stocks, all online US-listed ETF trades are also $0 commission. ETFs are a fantastic way to diversify your portfolio, and with E*TRADE, you can trade them freely. Whether you're interested in broad market ETFs, sector-specific ETFs, or bond ETFs, the commission is waived.
Sub-heading 1.2: Mutual Funds
Over 6,000 No-Transaction-Fee (NTF) Mutual Funds: E*TRADE offers a vast selection of mutual funds that come with no transaction fees. This is a huge advantage for long-term investors who prefer to invest in professionally managed portfolios. While there are a handful of mutual funds that may carry a transaction fee, the sheer volume of NTF options means you'll likely find what you need without incurring extra costs. Be aware that mutual funds still have underlying expense ratios, which are separate from brokerage transaction fees.
Sub-heading 1.3: Options
Low-Cost Options Trading with Volume Discounts: While not entirely $0 commission, ETRADE offers a very competitive pricing structure for options. The standard options contract fee is $0.65 per contract. However, for active traders who execute at least 30 stock, ETF, and options trades per quarter, that fee drops to an even lower $0.50 per contract. This makes ETRADE an attractive platform for options traders.
Step 2: Understanding What Isn't Entirely "Free" (But Still Competitive!)
While a significant portion of your trading activities can be commission-free, it's crucial to be aware of the areas where E*TRADE does charge fees.
Sub-heading 2.1: Other Securities and Special Handling
Over-the-Counter (OTC) Securities: Trades of OTC securities (often referred to as penny stocks) are not commission-free. E*TRADE charges a commission of $6.95 per trade for these. If you make 30 or more trades per quarter, this fee reduces to $4.95 per trade.
Foreign Stock Transactions: Direct foreign stock transactions generally incur a commission. E*TRADE primarily focuses on US-listed securities.
Large Block Transactions Requiring Special Handling: While most online stock trades are free, very large or complex block trades that require special broker assistance may have associated fees.
Broker-Assisted Trades: If you place a trade over the phone with a live broker, a service charge of $25 will apply, in addition to any applicable commissions for the security type. This is standard across most brokerages, so it's always more cost-effective to use their online platforms.
Sub-heading 2.2: Futures and Fixed Income
Futures Contracts: Futures trading involves a commission of $1.50 per contract, per side, plus exchange and regulatory fees. This goes up to $2.50 per contract for cryptocurrency futures.
Bonds: Online secondary trades of bonds are charged $1.00 per bond, with a minimum of $10 and a maximum of $250. US Treasury auctions, however, typically have no charge.
Step 3: Beyond Trading Fees – Other Potential Costs
While the focus is on trade commissions, it's good practice to be aware of other potential fees associated with your brokerage account.
Sub-heading 3.1: Account-Related Fees
Account Minimum and Maintenance Fees: E*TRADE generally has $0 account minimums and no inactivity or maintenance fees for most brokerage accounts. This is a huge plus, as some brokers charge for low balances or infrequent trading.
Account Transfer Fees: If you decide to transfer your entire account out of E*TRADE to another brokerage, there is a $75 fee for a full transfer. Partial transfers cost $25.
Wire Transfers: Incoming wire transfers are generally free, but outgoing wire transfers can incur a $25 fee.
Sub-heading 3.2: Miscellaneous and Regulatory Fees
Regulatory and Exchange Fees: Like all brokerages, E*TRADE passes on very small regulatory and exchange fees (like SEC fees or FINRA TAF) for buying and selling securities. These are usually negligible and unavoidable.
Mutual Fund Early Redemption Fees: Some mutual funds may impose an early redemption fee if you sell shares too soon after purchasing them (e.g., within 90 days). This fee is charged by the fund company, not E*TRADE, and is designed to discourage short-term trading in mutual funds.
Step 4: Maximizing Your Commission-Free Trading Experience with E*TRADE
Now that you understand the fee structure, here are some tips to make the most of E*TRADE's commission-free offerings:
Focus on Core Investments: For most investors, stocks and ETFs form the backbone of their portfolio. With E*TRADE, you can trade these core assets without worrying about commissions, allowing you to invest regularly and rebalance your portfolio as needed without incurring extra costs.
Utilize No-Transaction-Fee Mutual Funds: If you prefer mutual funds for diversification, stick to the extensive list of NTF funds to avoid transaction fees. Use E*TRADE's powerful screening tools to filter for these funds.
Plan Your Options Trades (if applicable): If you're an options trader, aim to execute at least 30 trades per quarter to qualify for the lower $0.50 per contract fee. This can significantly reduce your trading costs over time.
Avoid Broker-Assisted Trades: Unless absolutely necessary, always execute your trades online through the E*TRADE website or mobile app to avoid the $25 broker-assisted trade fee.
Review Account Statements: Regularly check your account statements to understand any fees charged and ensure they align with your trading activity and E*TRADE's published fee schedule.
By understanding E*TRADE's fee structure, you can strategically plan your investments and take full advantage of the significant number of free trades available, helping you keep more of your hard-earned money invested.
10 Related FAQ Questions
How to trade stocks for free on E*TRADE?
To trade stocks for free on E*TRADE, simply execute online trades of US-listed stocks through their website or mobile platforms. These trades are commission-free.
How to trade ETFs without commission on E*TRADE?
You can trade ETFs without commission on E*TRADE by placing online orders for any US-listed Exchange-Traded Funds (ETFs) via their website or mobile app.
How to find no-transaction-fee mutual funds on E*TRADE?
To find no-transaction-fee mutual funds on E*TRADE, use their mutual fund screener or search tools and filter specifically for "No-Load, No-Transaction-Fee" funds.
How to reduce options trading fees on E*TRADE?
To reduce options trading fees on E*TRADE, aim to execute 30 or more stock, ETF, and options trades per quarter to qualify for the discounted rate of $0.50 per contract, down from the standard $0.65.
How to avoid broker-assisted trade fees on E*TRADE?
To avoid broker-assisted trade fees on E*TRADE, always place your trades yourself through their online trading platforms (website or mobile app) instead of calling a representative.
How to check E*TRADE's current commission rates?
You can check E*TRADE's current commission rates by visiting the "Pricing & Rates" section on their official website (
How to open a commission-free E*TRADE account?
You can open a commission-free E*TRADE account by simply going to their website, clicking "Open an Account," and following the guided steps. There is no minimum deposit required to open a brokerage account for commission-free trading.
How to trade foreign stocks on E*TRADE?
E*TRADE primarily focuses on US-listed securities. Direct foreign stock transactions may incur commissions, and their platform might not offer direct access to all international markets.
How to transfer an account to E*TRADE for free?
While E*TRADE charges a fee to transfer out of their platform, they typically do not charge fees for incoming account transfers from another brokerage. However, your previous brokerage might charge an outgoing transfer fee.
How to avoid inactivity fees on E*TRADE?
You don't need to worry about inactivity fees on E*TRADE, as they generally do not charge maintenance or inactivity fees for their brokerage accounts.
