Robinhood vs. E*TRADE 2019

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  • Account Minimum: $500
  • Fees: $6.95 stock and ETF trading
  • Awards: Best for Options
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Robinhood and E*TRADE are as different as night and day, with the well-established E*TRADE offering deep discount commissions and a broad product line while upstart Robinhood has revolutionized the financial industry with commission-free stock, ETF, options and cryptocurrency trading. E*TRADE currently dwarfs Robinhood in size, with a market cap of around $12 billion, while its rapidly growing rival completed a round of 2018 funding that lifted its value to $5.6 billion. Given that trajectory, the two brokers could be equally sized competitors within a few years.

Trade Experience

E*TRADE clients can trade stocks, ETFs, mutual funds, futures, bonds, and options. They can also participate in initial public offerings (IPOs) and U.S Treasury auctions. Robinhood offers trading in only four venues: stocks, ETFs, options and cryptocurrencies, and doesn’t allow short selling There’s no futures or IPO trading but clients can buy and sell Canadian and European stocks for an additional fee. Cryptocurrency trading is currently available in 35 states in an early access rollout that was expected to reach nationwide coverage in 2018.

Trade Experience

Robinhood

  • Commission-free trading
  • Convenient for new investors
  • Streamlined & intuitive

E*TRADE

  • Powerful mobile and desktop experience
  • Multi-tiered portfolio management 
  • Easy navigation between investment options

Mobile and Emerging Tech

Robinhood offered smartphone only trading until November 2017 when they announced Robinhood Web, their first PC and tablet-based trading interface. Even so, E*TRADE wins this category hands-down, with intuitive desktop platforms, multi-OS mobile applications and an innovative robo-advisory service.

Mobile and Emerging Tech

Robinhood

  • Easy to use mobile app
  • News links to watchlist tickers
  • Web platform needs better documentation

E*TRADE

  • Mobile apps sync with desktop
  • Low fee robo-advisor
  • Bloomberg TV integrated into mobile apps

News and Research

E*TRADE’s technically oriented customers can play with advanced charting tools while those who rely on spreadsheets can thumb through analyst ratings, insider trading data, financial statements, and asset screeners. Both groups will appreciate detailed calendars, expert analysis, stock recommendations, and investment ideas that span market activity, trends, and fundamentals. Real-time news is also available but limited to popular newswires.

The Robinhood web site contains no research tools or resources while the mobile app includes valuable but limited resources, including fundamental and valuation statistics as well as a volatility tool. The 2017 Robinhood Web announcement lists useful features that include analyst ratings, earnings information and market coverage in a personalized news feed but site omissions raise questions about their commitment to this platform.

News and Research

Robinhood

  • Limited research and analysis
  • Filtered news
  • Volatility tool

E*TRADE

  • Planning tools and calculators
  • Technical analysis charting tools
  • TipRanks recommendations

Education and Security

Robinhood has yet to focus on investor education, providing few resources. E*TRADE shines in this category, with an educational portal that features dozens of articles, videos and webinars that teach basic principles. Better yet, these resources cover a wide variety of market venues, including stocks, options, futures, ETFs, bonds, fixed income, retirement planning, and mutual funds.

Robinhood has purchased no additional third party insurance coverage, unlike E*TRADE, but has bolstered security with two-factor authentication.

Education and Security

Robinhood

  • Few educational resources
  • Two-factor authentication
  • FINRA and SIPC account protection

E*TRADE

  • Webinars and in-person events
  • Diverse selection of videos 
  • Additional third party insurance coverage

Costs

Robinhood offers commission-free trading, making money through payment for order flow with third parties, delayed quotes and interest on the uninvested portion of client funds. Robinhood Gold adds buying power for a sliding scale fee that starts at $10 per month. E*TRADE charges an industry-standard $6.95 for each side of a stock, ETF, or options trade but the commission drops to $4.95 if customers make 30 or more trades in a quarter. Futures contracts cost $1.50 on each side and are not subject to volume discounts.

Costs

Robinhood

  • Commission-free trading
  • Robinhood Gold adds features for a monthly fee
  • Delayed quotes raise trust issues

E*TRADE

  • Stock trade fees: $6.95
  • Options trade fees $6.95 + $0.75 per contract
  • Futures trade fees: $1.50 per contract

Methodology

Investopedia’s mission is to provide online investors with the most unbiased, comprehensive reviews and ratings of self-directed brokers. Vetted by multiple industry experts – including a financial research firm with more than 20 years of experience in broker ratings – Investopedia’s Broker Ratings and Reviews embody industry best practices for research design.

Investopedia consulted independent researchers, and financial institutions, and conducted multiple tests, to design a system that rates brokers based on 10 categories and 149 carefully selected variables. Selection of ratings elements was a culmination of 5,498 survey responses, 100+ hours of industry research, and 100 hours of user feedback. Each category encapsulates the key elements needed for thorough evaluation. All have been tested for replicable results with a battery of evaluators. Every review goes through a rigorous verification process to maintain editorial separation and ensure an unbiased ratings result.

Source: Investopedia

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