⚠ Key Concerns

The Morgan Stanley acquisition has brought changes to E*Trade's policies and platform integration. While E*Trade maintains better traditional broker protections than app-based competitors, PFOF practices and mandatory arbitration remain standard features.

Score Breakdown by Category

How E*Trade's terms rate across my evaluation categories.

💰 Order Execution & Transparency (30%) 48/100

Why this score: E*Trade engages in payment for order flow like most brokers, but has more transparent disclosure than app-based competitors. Order routing practices are documented in SEC Rule 606 reports, though interpretation requires expertise.

Industry comparison: Fidelity: 55/100 (better execution) | Robinhood: 28/100 (aggressive PFOF) | Webull: 30/100 (aggressive PFOF) | Category avg: 40/100

⚖ Trading Freedom & Restrictions (25%) 55/100

Why this score: E*Trade maintains standard trading restrictions but handled volatile periods better than Robinhood during 2021. Pattern day trading rules apply, but restrictions are more clearly communicated. Access to extended hours and options trading is more readily available.

Industry comparison: Fidelity: 62/100 (minimal restrictions) | Robinhood: 22/100 (GameStop restrictions) | Webull: 40/100 (similar to Robinhood) | Category avg: 45/100

🔒 Margin & Liquidation Rights (20%) 52/100

Why this score: E*Trade provides clearer margin documentation than app-based competitors. Margin calls include more communication before liquidation in most cases, though the platform retains rights to liquidate without notice in extreme conditions.

Industry comparison: Fidelity: 58/100 (best margin terms) | Robinhood: 35/100 (aggressive liquidation) | Webull: 38/100 (limited notice) | Category avg: 46/100

👁 Account Security & Data (15%) 55/100

Why this score: Morgan Stanley backing provides strong institutional security. SIPC and excess coverage are standard. Data practices are moderate with sharing among Morgan Stanley affiliates. Account closure processes are more formal than app-based competitors.

Industry comparison: Fidelity: 65/100 (best privacy) | Robinhood: 45/100 (extensive data collection) | Webull: 32/100 (Chinese ownership concerns) | Category avg: 49/100

👥 Dispute Resolution (10%) 50/100

Why this score: Mandatory FINRA arbitration applies to most disputes, which is industry standard. Customer support for disputes is better than app-based competitors with phone access available. Class action waiver is standard.

Industry comparison: Fidelity: 52/100 (same arbitration) | Robinhood: 48/100 (poor support) | Webull: 42/100 (limited support) | Category avg: 48/100

Compare With Other Platforms

⚠ Key Clauses to Watch

These provisions in E*Trade's terms create the most risk for investors.

Payment for Order Flow Disclosure

High Risk

E*Trade receives payment from market makers for order flow. While more transparent than some competitors, this practice may still result in execution prices that are not optimal for investors.

"E*Trade may receive remuneration from market makers for directing orders to them." E*Trade Customer Agreement

Trading Halts During Volatility

High Risk

E*Trade reserves the right to halt trading in securities during volatile market conditions. While handled better than Robinhood in 2021, the platform still maintains broad discretionary authority.

"We may refuse to accept or execute any order at our discretion... particularly during periods of high volatility." E*Trade Customer Agreement

Margin Call Liquidation Rights

High Risk

During margin calls, E*Trade can liquidate positions. While typically more notice is provided than app-based competitors, the platform retains the right to act without notice in extreme market conditions.

"We may liquidate all or any part of your account without notice to meet a margin call." E*Trade Margin Agreement

Account Restriction Policies

High Risk

E*Trade can restrict or close accounts for various reasons including suspected fraud, regulatory concerns, or violation of terms. The appeals process is more formal than app-based competitors but still favors the platform.

"We may at any time and for any reason terminate or restrict your account." E*Trade Customer Agreement

Securities Lending Without Consent

Medium Risk

Securities in margin accounts may be loaned to short sellers. E*Trade's fully paid lending program requires consent, but margin account lending is often automatic.

"Securities held in margin accounts may be loaned to E*Trade or third parties." E*Trade Margin Agreement

Morgan Stanley Integration Changes

Medium Risk

The Morgan Stanley acquisition has led to ongoing platform changes and data sharing among affiliates. Terms may continue to evolve as integration deepens.

"Your information may be shared among Morgan Stanley affiliates for business purposes." E*Trade Privacy Policy

Analysis

"E*Trade represents the middle ground in online brokerage - better than the app-based disruptors but not quite matching the consumer protections of Fidelity. The Morgan Stanley acquisition brings stability but also more aggressive cross-selling and data sharing.

The platform's handling of the 2021 volatility events was noticeably better than Robinhood's, which suggests more mature risk management. However, PFOF practices remain standard, meaning execution quality may not be optimal.

My recommendation: E*Trade is a reasonable choice for investors who want more traditional broker features than Robinhood offers but don't need the full Fidelity experience. Be aware of the Morgan Stanley integration and review any new terms that result from this ongoing process."

E*Trade Terms of Service Review

⚠ Key Concerns

Score Breakdown by Category

Compare With Other Platforms

⚠ E*Trade Account Issues?

⚠ Key Clauses to Watch

Payment for Order Flow Disclosure

Trading Halts During Volatility

Margin Call Liquidation Rights

Account Restriction Policies

Securities Lending Without Consent

Morgan Stanley Integration Changes

Analysis

Need Help With E*Trade?

Schedule a Consultation

E*Trade Terms of Service Review

⚠ Key Concerns

Score Breakdown by Category

Compare With Other Platforms

⚠ E*Trade Account Issues?

Related Resources

⚠ Key Clauses to Watch

Payment for Order Flow Disclosure

Trading Halts During Volatility

Margin Call Liquidation Rights

Account Restriction Policies

Securities Lending Without Consent

Morgan Stanley Integration Changes

Analysis

Need Help With E*Trade?

Schedule a Consultation