Is TradeStation free?
TradeStation is in fact a zero-commission broker when it comes to buying and selling stocks. Zero commission is especially useful if you trade relatively low volumes, like buying stocks for less than $500 per trade, because you won't be hit with any minimum fees the broker might charge.
We should note that the payment-for-order-flow model, which is used by some zero-commission brokers to generate income (rather than relying on commissions), could potentially create a conflict of interest between you and your broker. This could result in trade execution (like routing your orders to specific market makers) that might be unfavorable for you under certain market conditions, especially when using market orders (as opposed to limit orders, which seem to be less affected).
Keep in mind that at some brokers, you could incur non-trading charges like withdrawal or inactivity fees. Also, if you trade on margin, the margin rate charged by brokers can differ wildly. In the next chapter, we'll find out what these charges are at TradeStation and how they compare with fees charged by its closest competitors.
If you want to read our full review, including fees, deposit options and other platforms (like web and desktop) then skip to the TradeStation review.
Overview of TradeStation fees and charges
It's safe to say that TradeStation's fees are low in general. They either don't charge a brokerage fee for things that other brokers do, or they only charge a small amount.
Here's a high-level overview of TradeStation's fees
|Assets||Fee level||Fee terms|
|US stock fee||Low||Commission-free up to the first 10,000 shares per trade for US clients. $5 per trade for non-US clients|
|EURUSD fee||-||Not available|
|US mutual fund fees||Average||$14.95 per transaction|
|Inactivity fee||Low||$50 per year if your balance is less than $2,000 or if you make less than 5 trades per year|
TradeStation fees explained
Online brokerages in general charge much lower brokerage fees than traditional brokerages do - this is largely because online brokerages' businesses can be much better scaled: from a purely technical standpoint, it doesn't make that much of a difference for them if they have 100 or 5,000 clients.
This is not to say, however, that they don't charge any fees at all. They make money by charging you various rates for various actions or events. Usually you need to keep an eye on the following three types of fees:
- Trading fees - these are brokerage fees that you pay when you actually carry out a trade, like buying an Apple share or an ETF. What you pay is either a commission, a spread or a financing rate. Some brokers apply all of these.
- A commission is either fixed or based on the traded volume.
- A spread is the difference between the buy price and the sell price.
- A financing rate or overnight rate is charged when you hold your leveraged positions for more than one day.
- Non-trading fees. These are usually related to some operations you carry out in your account, such as depositing money, withdrawing money, or not trading for an extended period.
We compare TradeStation fees with its closest competitors, tastyworks and Interactive Brokers.
TradeStation trading fees
TradeStation's trading fees are low, which makes it suitable for you even if you trade often (i.e. several times a week).
Let's break down trading fees according to the different asset classes available at TradeStation.
TradeStation's trading fees are low.
Stock fees and ETF fees
TradeStation has low stock trading fees.
TradeStation fund fees are average.
|EU mutual fund||-||-||$4.4|
TradeStation has low bond fees.
|US Treasury bond||$20.0||-||$5.0|
|EU government bond||-||-||$10.0|
TradeStation's options fees are low.
|US stock options||$0.0||$5.0||$6.5|
|US stock index options||$6.0||$7.5||$6.5|
|UK stock index options||-||-||$19.2|
|German stock index options||-||-||$16.8|
TradeStation's futures fees are average.
|US micro e-mini stock index futures||$15.0||$8.5||$2.5|
|UK stock index futures||-||-||$19.2|
|German e-mini stock index futures||-||-||$7.9|
TradeStation margin rates are high.
|USD margin rate||11.5%||11.0%||5.3%|
|EUR margin rate||-||-||2.8%|
TradeStation non-trading fees
When it comes to non-trading fees, TradeStation is a rather cheap broker.
Non-trading fees include various brokerage fees and charges at TradeStation that are not related to buying or selling assets. This can be a withdrawal fee, deposit fee, inactivity fee or account fee.
TradeStation deposit fee
TradeStation withdrawal fee
TradeStation inactivity fee
TradeStation does apply an inactivity fee and it is $50 per year if your balance is less than $2,000 or if you make less than 5 trades per year. Keep this in mind to avoid getting charged after a longer idle period. The fact that TradeStation charges an inactivity fee makes it less ideal for you if you are a buy-and-hold investor.
The inactivity fee charged by TradeStation is low.
|Inactivity fee||$50 per year if your balance is less than $2,000 or if you make less than 5 trades per year||No inactivity fee||No inactivity fee|