Full Review of TradeStation
TradeStation was established in 1982, under the name Omega Research. They were initially focused on developing trading strategy software, but today they operate as a broker catering for investors and traders of all types. They’re particularly popular with those that trade actively and in high volume, across a variety of different products such as stocks, forex, futures, and of course options.
In the 30 plus years since TradeStation has been formed they have built themselves a very strong reputation and are well known for their rich and highly functional platform. They offer several powerful trading tools which are especially appealing to active and professional traders. There are very few broker services out there today that can offer as much in terms of trading features as TradeStation does. Not only do they cover an extensive list of products but they continue to improve what they offer their customers.
In this review of TradeStation, we have assessed everything they have to offer from the perspective of an options trader. We’ve covered all the important aspects you really need to know about, including the commission structure, the trading platform, and the various tools and features available.
Commissions, Fees & Minimum Deposit
TradeStation offers two pricing plans for trading options: per contract commission and flat fee trading. The per contract commission plan is simply $1 per contract with no base charge and a minimum of 1 contract per trade. The flat fee trading plan is variable, and the costs depend on the number of trades made in a calendar month.
|Number of Trades Per Month||Cost Per Trade||Additional Cost Per Contract|
It should be noted that there is an additional charge of $.035 per contract for trades involving index options.
The best value for your money here is definitely at the higher volume levels, but two separate trading plans along with reasonably competitive charges for low volume traders suggest that TradeStation is trying to appeal to everyone. However, there’s also evidence that it’s the high volume traders they are really interested in.
The minimum deposit here is $5,000, which is significantly higher than many other options brokers and could be a real deterrent to casual and infrequent investors. There’s also a fixed monthly fee of $99.95 to use the trading platform. While this is unlikely to be a major issue for those that deal in high volumes, it’s something else that might put off those that don’t.
We should point out the fixed monthly fee is waived if you trade 50 or more options contracts in the previous month, or if you maintain a balance of $100,000 or higher.
Trading Platform, Tools & Features
It’s in this area where TradeStation really excels. The trading platform is functional, feature rich, and very advanced; it’s considered by many to be the benchmark of what broker software should be like. It takes some getting used to and there's a fairly steep learning curve, but the potential benefits can make the effort more than worthwhile.
The only real downside of the platform is that beginners may struggle to get the most out of it. This is somewhat mitigated by the fact that TradeStation offers home study courses and online video courses that will teach you how to use the platform effectively. However, if you’re looking for something easy to understand and simple to use, this is probably not the ideal broker for you.
In addition to the flagship TradeStation platform, there’s an additional platform specifically for options trading. This is called Option Station Pro and has a number of features that options traders will find very useful. The advanced order entry technology makes it easy to trade even complex strategies with ease, while the Spreadmaster position management tool allows for the simple creation of customizable spreads.
TradeStation claims to offer “lightning fast execution” of orders; a claim that seems perfectly justified. Orders are filled quickly and efficiently, and you have direct access to a wide range of exchanges. Direct routing is also available, allowing you to bypass the broker and trade directly with market makers.
Other features include an excellent range of educational resources and an active community. There’s a busy forum and this enables you to connect with other traders and share useful information. You can learn a lot just from reading through all the discussions in the forum, and even more if you get involved yourself.
If customization is important to you, you won’t be disappointed at TradeStation. Virtually everything is customizable and you can build customized strategies and tracking indicators that will help you to implement your trading ideas with ease. There’s even an option to buy customized strategies from other traders, or sell your own.
Research & Analysis
The research and analysis features available are almost as impressive as the trading platform. You can extensively evaluate almost any equity you choose, with data provided from several leading sources in real time. There are also effective market scanning and pattern recognition tools for monitoring activity and finding trading opportunities.
The charting tools have an impressive depth of features and make technical analysis as straightforward as it can be. They come with over 150 indicators as standard and you can create your own to enhance your analysis capabilities. There’s plenty of historical market data provided and everything is intuitive and very user-friendly.
With so much advanced software available, good customer service is essential. TradeStation doesn't disappoint in this respect, and they are quick to deal with any questions or concerns you may have. They even offer a free customization session to teach how you tailor everything to your own needs.
Telephone and email support are both available, and there’s a live chat function as well. It’s somewhat disappointing that support isn't available 24/7 though. Opening hours are 08:30 to 18:30 EST, Monday to Friday. This isn't particularly uncommon, but a lot of online brokers do now offer around the clock support.
If you’re an experienced, active, and high volume trader then TradeStation is definitely a broker you should be considering. The features and tools available here compare to those available at large financial institutions and they can really help you to maximize your profitability. You will need to put some work into getting the most out of them though.
This is probably not the broker for you if your preference is to keep things as simple as possible, because the software really is very advanced. With that being said, we wouldn’t advise ruling TradeStation out even if you’re something of a beginner. Everything you need to learn to use the platform effectively is available to you, and although it will take some time it could be well worth the effort in the long run.