E*TRADE

E*TRADE was founded in 1982 as E*TRADE Securities, LLC by William A. Porter and Bernard A. Newcomb. It was established during the early growth of online brokerage services, spearheading the development of electronic financial markets by providing tools and services previously inaccessible to individual investors, thereby democratizing personal investing in financial markets.

On August 16, 1996, E*TRADE went public and its shares started trading on the NASDAQ under the ticker symbol 'EGRP'. The company raised significant capital through its IPO, illustrating market confidence in the online brokerage model. Marking its entrance into public markets, the IPO allowed E*TRADE to expand its product offerings significantly, further driving innovation in electronic trading.

E*TRADE completed the acquisition of Telebanc Financial, Corp, effectively making the company a full-service financial institution. This strategic acquisition allowed E*TRADE to offer a full suite of financial products and services, beyond brokerage, including online banking, certificates of deposit, and other consumer banking products. It enhanced E*TRADE’s competitive advantage against other players in the financial services sector.

In 2009, E*TRADE faced financial difficulties as a result of the broader financial crisis. The company received a bailout in the form of a significant capital infusion from Citadel LLC, resulting in Citadel becoming E*TRADE's largest shareholder. This move was pivotal in stabilizing E*TRADE's balance sheet and ensuring its continued operation, as it struggled with mortgage-related losses.

E*TRADE acquired the retail brokerage business OptionsHouse for $725 million. The acquisition, finalized in 2015, was aimed at enhancing E*TRADE’s derivatives trading capabilities. It was a strategic move to bolster E*TRADE’s competitive offerings in the ever-evolving trading platforms and tools sector, providing its users with more robust options trading tools and expertise.

E*TRADE launched new improvements to its trading platforms, including updates to E*TRADE Pro and the mobile trading app. These updates provided traders with new analytic tools, improved the user interface, and optimized the speed and efficiency of executing trades. The intent was to cater to a more tech-savvy user base that demanded quicker and more informed decision-making tools for their trades.

On February 20, 2020, Morgan Stanley announced its acquisition of E*TRADE for $13 billion. This merger aimed to connect Morgan Stanley's investment management business with E*TRADE's direct-to-consumer and digital capabilities. The acquisition signified a major consolidation in the online brokerage industry, allowing Morgan Stanley to broaden its clientele by adding E*TRADE’s consumers to its large wealth management network.

Morgan Stanley completed its acquisition of E*TRADE on October 2, 2020, bringing together one of America’s leading investment banks with a full-service digital brokerage. The merger created a powerful combination benefitting from E*TRADE’s widespread consumer base and Morgan Stanley's comprehensive wealth management offerings. This strategic union was seen as a significant step in Morgan Stanley's evolution to serving mass affluent and institutional clients with a robust online platform.

In the first quarter of 2021, E*TRADE reached a record high in demand for margin lending, indicative of the increased trading activity fueled by market volatility and investor interest. This surge was part of broader trends seeing individual investors engaging with markets through platforms like E*TRADE. The increasing margin balances demonstrated robust investor confidence despite market uncertainties, showcasing E*TRADE’s critical role in modern investing habits.

E*TRADE joined other major online brokerage platforms in offering commission-free trading by the end of September 2023. This move was part of industry-wide transformations to attract and retain clients by eliminating fees associated with trading securities such as stocks and ETFs. Commission-free trading reflects the competitive nature of online brokerages to offer lower-cost and accessible trading to investors, especially appealing to younger, tech-savvy traders.