E-Trade is one of the largest online brokerages in the US of A, with a $14.4 billion market cap and employing over 3,200 employees.  They have been leading the bitcoin futures charge amongst online brokerages, as one of the first to launch on the CBOE exchange in December 2017, and launching the CME market the following month.  E Trade is one of three brokers to offer access to both bitcoin futures exchanges, and we will discuss the specifics of their offering below.

The mainstream reviews on e-trade stress very similar aspects: the entry-level product is quite good, suitable for beginning and low-frequency traders.  The fees, however, are a tad bit high, negligible for long-term investors, but more of an issue for high-frequency types – a discount is triggered, however, if more than 30 trades are placed per quarter.

That 30 trades per quarter also opens up the e-Trade pro platform, designed for professional traders.  The platform is no doubt excellent, but new traders will not be able to access it without those 30 quarterly trades or an account balance of $250k.  This will be discouraging to those accustomed to Ameritrade’s ThinkorSwim platform, or the Tradestation, both offered to all customers without requirement.

Bitcoin Futures Trading at e*trade

E-Trade offers customers access both the CME and CBOE markets – you can see the difference between the two markets below.

CME and CBOE Contract Comparison

So good on e-trade to offer both markets to customers – however, note that they require an 80% margin, meaning that for CME it will require four bitcoin to control a futures contract worth five.  Not your traditional future market, that is for sure.

E-Trade tags on a fee of $2.50 per contract (above the modest amount charged by CME or CBOE), which is slightly higher than the competition aside from interactive brokers, who charge more.  Fees in the futures market seem so low that in and of themselves they are not actually a differentiating factor.

Contracts are settled in USD.  

Product

There are three different platforms available from e-trade – e-trade web, optionshouse, and e-trade pro, all of which are great platforms with customizable interfaces, loads of technical analysis tools, integrated news and streaming real-time data.  The web platform is meant primarily for those who are looking to buy and hold rather than trade, so is not as well suited for bitcoin futures trading. Most new traders, or at least those unable to meet etrade pros exacting entry requirements, will be trading on the Optionshouse platform. Optionhouse pretty much blows any bitcoin-only trading products out of the water, and can hold its own against top of the market competition like tradestation or Ameritrade’s thinkorswim.  The premium product e-trade pro is just as good as these competitors, but of course is not available to everyone, quite a departure from the competition.

Etrade offers both the etrade mobile and optionshouse mobile trading apps, allowing for easy buying and selling of your bitcoin futures. The offering is a bit less robust than the competition, as technical analysis capabilities are much more limited.  However, for account management, research, real-time streaming, and placing trades, the apps deliver splendidly.

In general, the e-trade products focus on ease of customer use, perhaps sacrificing the more advanced and difficult to master features available from thinkorswim or tradestation for the sake of usability.  This strategy makes sense when considering their aggressive marketing campaigns targeting the mass market. It also explains why e-trade can get away with charging slightly higher commissions on stocks – their target market is less sensitive to slight per-trade fee differences.

Might be better off elsewhere if:

You are willing to trade the spot market.

We understand that there is benefit for settling futures in USD and we also know the mainstream reach that e-trade has in the marketplace; all things being equal, we are unsure why someone would prefer this futures contract to, for instance, using a 3:1 leverage in the spot market.  

You want real leverage on futures.

If you are looking lower margin requirements, interactive brokers offers 50%.  If you are willing to collateralize your trades in bitcoin – meaning that you physically buy bitcoin and then trade bitcoin futures with it – non-US residents should check out bitmex.  

Bottom Line

The fact that e-trade offers bitcoin futures trading is exciting.  They, and the rest of the market, have been quite conservative in how they approach bitcoin, which is an understandable considering bitcoin’s unique nature and the fact that the futures contracts are collateralized and settled in USD.  It is great that e-trade offers both CME and CBOE contracts – however, we don’t see much use for a futures instrument that requires 80% margin, either from a speculative or hedging perspective.