Loading organizations...
E*TRADE is a financial services enterprise based in Palo Alto, California, that provides discount online brokerage services and electronic trading platforms for self-directed retail investors. The institution pioneered digital market access by transitioning from touch-tone phone systems to internet-based trading, growing its user base to 112,800 active accounts by the end of 1996. During that same fiscal year, the brokerage generated nearly $52 million in annual revenue, and by the close of 1998, the platform had expanded significantly to manage nearly 700,000 individual customer accounts. Following its initial public offering in August 1996, the firm operated under the strategic leadership of corporate executives including Christos Cotsakos and Steven Idzik before ultimately being acquired by Morgan Stanley in 2020. The organization was originally founded as TradePlus in 1982 by technology entrepreneurs William Porter and Bernard Newcomb.
Key people at E*TRADE.
Key people at E*TRADE.
E*TRADE is a pioneering online brokerage and financial services firm that democratized retail investing by offering low-cost, electronic trading platforms to individual investors.[1][2][3] Originally focused on discount brokerage, it evolved into a diversified provider of online trading, banking, and investment services, serving millions of households with tools for stocks, bonds, options, and employee stock plans.[1][4] By the early 2000s, it managed billions in assets under administration and deposits, positioning itself as a leader in digital financial services.[4]
Its mission centered on empowering customers through accessible technology, saving them broker fees amid the rise of home computers and the internet.[1][3] The investment philosophy emphasized deep-discount, self-directed trading with a tech-first approach, expanding into global markets and fixed-income products.[1][2] Key sectors included equities, fixed income, and banking, with significant impact on the startup ecosystem through handling IPOs like Sportline USA and acquisitions such as OptionsLinc for stock plan management.[1][2]
E*TRADE traces its roots to 1982, when physicist and inventor William Porter founded TradePlus with $15,000 to deliver electronic brokerage services to stockbrokers, partnering with C.D. Anderson & Co. for a computerized order entry system.[1][2][3] The first online trade occurred in July 1983, executed by a Michigan doctor, marking a pivotal moment as Porter spotted the potential for direct-to-consumer trading to slash fees.[1]
In 1991-1992, Porter launched E*Trade Securities in Palo Alto, California, as a TradePlus subsidiary, offering one of the earliest all-electronic brokerages amid slow post-1987 crash recovery and the Gulf War recession.[2][3] Christos Cotsakos became president and CEO in 1996, steering the firm public that year with revenues surging to $52 million.[1][2][3] Early traction built through partnerships with Yahoo! and AOL, global expansion to Australia, Canada, Germany, Israel, and Japan, and weathering the 1997 market crash.[1][2]
E*TRADE rode the 1990s internet and PC boom, transforming brokerage from phone-based to fully digital, aligning with AOL and Compuserve's user growth to millions.[2][3] Timing was ideal post-1987 crash, as recession recovery and Gulf War lifted trading volumes, fueling the "American information revolution."[2]
Market forces like proliferating home computers, web adoption, and demand for low-cost investing propelled its ascent, with revenues jumping 132% to $662 million in 1999.[3] It influenced the ecosystem by popularizing self-directed trading, enabling startups via IPO handling and stock plan software, and setting standards for online finance that pressured incumbents to digitize.[1][2]
E*TRADE solidified online brokerage as mainstream, but its trajectory included expansion phases, troubles, and shifts to fee-based advisory custody.[4] Looking ahead, trends like mobile trading, robo-advisors, and fintech integration could amplify its retail focus, especially with 4.9 million accounts and $414 billion in assets by 2019.[4] Influence may evolve through potential acquisitions or banking synergies, sustaining its role in empowering everyday investors amid rising digital wealth management—echoing Porter's vision of accessible markets from that first 1983 trade.[1]
