Short Selling on E*TRADE (Now Part of Morgan Stanley)
ETRADE supports full short selling through both its standard platform and Power ETRADE. Since Morgan Stanley acquired E*TRADE, the short inventory has improved because you are now backed by one of the largest financial institutions in the world.
If you are brand new to short selling, start with our complete beginner’s guide to shorting before following these platform-specific steps.
Requirements
- Margin account with minimum $2,000
- Options/margin agreement approved
- E*TRADE account in good standing (no restrictions)
How to Short Sell on E*TRADE
Standard Platform (Web)
- Log into etrade.com
- Click Trading then Stocks/ETFs
- Enter the stock ticker
- Under Order Action, select Sell Short
- Enter the quantity
- Select order type: Limit is recommended. Do not use market orders for short selling because spreads and slippage work against you
- Set your limit price
- Click Preview then Place Order
Power E*TRADE (Recommended for Active Traders)
Power E*TRADE gives you better tools for short selling:
- Open Power E*TRADE (web or app)
- Navigate to the stock
- Click Trade
- Select Sell Short
- Use the built-in charts with EMA and VWAP overlays to time your entry
- Set quantity and limit price
- Execute
To close your short: Select Buy to Cover and enter the same quantity.
E*TRADE Short Selling Costs
- Commissions: $0 for stocks and ETFs
- Borrow fees: Displayed before order placement. Varies by stock availability.
- Margin interest: Competitive rates that decrease with account balance. Check current rates at etrade.com/margin.
For a complete cost breakdown, see how much it costs to short a stock.
Tips for Shorting on E*TRADE
- Use Power E*TRADE’s built-in scanners to find weak stocks showing bearish patterns
- Check the “Shortable” indicator before planning your trade
- Always set a stop loss to protect against short squeezes
- Watch Level 2 data to confirm selling pressure before entering
- Start with paper trading to practice the platform mechanics
For a full review, see our E*TRADE broker review.
Disclaimer: This article is for educational purposes only and does not constitute financial advice. Short selling involves substantial risk of loss. Always consult a qualified financial advisor before making trading decisions.