Firstrade Review
An online brokerage firm on the market since 1985, Firstrade offers high-class online investment opportunities for traders around the world.
A member of FINRA/SIPC (Financial Industry Regulatory Authority/Securities Investor Protection Corporation), Firstrade leads in lightning-fast execution (0.1 seconds/trade) and an extended product range for online and mobile trading.
Account Options
Minimum Deposit
PROS
- International Investors
- Smooth and Simple Application Process
CONS
- Options Trading is Not Granted Automatically
- Education
Overview
Firstrade integrates a wide range of products from different U.S. markets under the same roof. From a single trading account, investors can trade stocks, ETFs, mutual funds, or options, but also invest in various other adjacent services.
Firstrade makes it clear right from the start that it strives to offer the lowest fees possible in the investment world, while not giving up on quality, reliable execution, funds' protection, or customer service.
When compared with other names in the industry, Firstrade adds value where the investor needs it most – low fees. In the end, the bottom line matters the most for investors, and Firstrade understands it perfectly.
By allowing international investors, Firstrade made a giant leap forward when compared with the competition, despite having increased costs for dealing with non-U.S. citizens or residents. Despite that, it does a great job providing access to anyone interested in trading simple and complex financial instruments on the world's largest financial markets – the United States market.
Products and Services
Firstrade offers a full suite of investments designed to cover every trader’s needs.
| Products | Features |
|---|---|
| Stocks | NYSE, AMEX, NASDAQ, OTC Bulletin Board, Pink Sheets |
| Options | Trade Puts, Calls, or Complex Option Strategies |
| Exchange-Traded Funds (ETFs) | Choose from a variety of ETFs that track specific market sectors easily |
| Mutual Funds | 11000+ mutual funds |
| Bonds, CD’s, Fixed Income | Fixed income securities, C.D.s, corporate bonds, municipal bonds |
| Margin Investing | Competitive margin rates for leveraged investment |
| Dividend Reinvestment (DRIP) | No extra charge for automatically dividend reinvestment |
| Securities Lending Income Program | Earn from loans on fully paid shares |
Stocks Trading at Firstrade
Firstrade's stock trading gives access to a wide range of stocks listed in the United States. From large, mid and small-cap companies to penny stocks, listed or OTC stocks, Firstrade offers great exposure to the U.S. stock market.
One of the key features of trading stocks with Firstrade is that trading extends after the regular market hours.
From 08:00 AM to 09:25 AM EST and from 04:05 PM to 09:00 PM EST, investors can trade available stocks using the extended hours trading option.
ETFs
The ETF industry increased dramatically in popularity over the last years. As online trading grew in popularity, so grew did the number of available financial instruments to trade.
ETFs track an industry, an industry segment, an index, etc., and investors may choose the type of ETF to invest in based on their risk appetite. Firstrade makes it easy to pick the right ETF for you as an investor by offering an ETF screener with over 30 different screening criteria to help to find the right ETF.
Options Trading
One way to increase the portfolio's growth potential is to use option strategies to maximize hedging. Firstrade makes it easy to find options chain easy and quick, but also to build sophisticated option trading strategies like spreads and straddles.
While coming at an additional cost, straddle, butterfly or condor strategies are available for the client to further protect the trading account in times when hedging is needed.
Also, the low commissioning for the overall options trading makes it one of the reasons why many traders prefer Firstrade instead of other brokerage houses.
Mutual Funds
For investors looking to diversify their portfolio, Firstrade gives access to over 11,000 mutual funds for all types of risk profiles. Despite the large number, finding the right mutual fund that suits an investor's profile is easy using the advanced screening tools offered by Firstrade.
The thing that stands out of the crowd here is the number of mutual funds available to trade. Few other brokers give access to so many (e.g., TradeStation only offers about two-thousand of them) mutual funds.
Fixed Income
Despite the fact that the fixed income industry was shaken by most yields going in negative territory in 2019, the demand for such products remains strong. Even negative yields don’t seem to scare investors anymore, and Firstrade fixed income services provide a great tool to search for the highest possible yield.
The fixed income section features products of all types and lengths.
From municipal bonds to T-bills or agency bonds to primary market CDs, there's something for all fixed-income investors in search of the highest possible yield
FirstTrade Account Types
The flagship account for the individual investor is the Regular Investing account. It features everything that one needs to access all Firstrade products – including managing multiple accounts, organize value charts, or easily checking accounts' balances.
International accounts are similar only that they are destined to non-US residents or citizens. The international account is one of the most popular accounts at Firstrade because not all brokerage houses in the United States give international investors the opportunity to trade the U.S. markets. Because of high regulatory costs, some prefer to skip this part altogether.
For those interested in saving for their retirement, Firstrade offers an IRA retirement account. It also offers various other account types to businesses or institutional investors.
Benefits
- Acceptance of International Investors
A major pro for Firstrade is the acceptance of international investors. The U.S. market appeals to investors from all over the world, yet few brokerage houses allow non-U.S. citizens or residents to use their services.
- Various Criteria to Rank the Funds
The mutual funds section deserves a special comment. It beats the competition by far in terms of the number of funds available to trade. Also, it is easy to use the tools to screen the funds from over eleven thousand candidates. One can simply use various criteria to rank the funds based on the risk appetite, performance, or other characteristics.
- Extended Trading Hours
Firstrade is a regulated broker that regularly runs promotions on its website and has the lowest commission for options trading among its peers.
On top of that, it offers extended trading hours so that the trader can open and close positions after-hours and doesn't charge any account maintenance fee as other houses do.
- Smooth and Simple Opening of an Account
Firstrade makes it clear from the moment you enter their webpage that it treats international investors with the same respect as U.S. ones. The opening of an account is smooth and simple, and funding the brokerage account usually takes a couple of business days. Traders and investors from most regions in the world are welcomed to trade with Firstrade.
- Quick Search Tool
The fixed income section benefits from two important tools that make the investor's life easier. One is the Quick Search tool that allows filtering the huge number of products based on the desired characteristics.
- Quick View Tool
Another one is the Quick View tool that organizes all the products to see the impact on the overall portfolio better.
Drawbacks
- The Trading Platform Makes it Difficult Sometimes to Find the Right Product
The trading platform is both a blessing and a curse. While it is a net positive that it gives access to all markets from the same roof, grouping them together makes it difficult sometimes to find the right product with ease.
Moreover, the interfaces, when accessing various markets from the same platform, are similar, thus sometimes creating confusion.
- Need to Get Familiar with What Options Trading is and Educate Yourself
Obviously, this is a good part for the inexperienced trader because part of the process is to get familiar with what options trading is and educate yourself before dedicating real money trading options. However, for the experienced trader, this is just another way of wasting time before being able to trade.
- Options Trading is Not Granted Automatically for All Strategies
Another negative is that options trading is not granted automatically for all strategies. Because options trading often implies complicated transactions, it induces an additional risk to the trading account. For this, the broker requires for each trader interested in this part to apply for options trading privileges.
How To Trade with Firstrade
Choose from three ways to trade with Firstrade:
- Online trading
- Mobile trading
- Broker assisted
1. Online Trading
Firstrade’s trading platform integrates its vast product range under one single roof. Investors have access to simple, yet effective solutions to manage their portfolio, but also to complex hedging strategies and diversification opportunities given the access to multiple markets.
The Firstrade Dashboard online trading platform easily allows investors to customize the things to see in two separate columns – one for the account and the other one for viewing the market. All on one page.
2. Mobile Trading
Firstrade’s Android and iOS apps are available for download in the Appstore, respectively, Google Play store. Nowadays, having an online trading account means the broker must offer the option to trade on the go.
Many traders and investors think of this the wrong way. It is not a trading decision that one needs to take when opening the app on the smartphone. Instead, it is the comfort provided by the though that you can always check your investments from your smartphone all the time and anywhere, providing there’s an Internet connection available.
In any case, the mobile app at Firststation provides some interesting features like offering advanced charts, easy-to-build watchlists, or access to upgraded research.
3. Broker-Assisted
When no Internet access is available, Firstrade makes sure you never miss any trading opportunity. Its broker-assisted service lets investors place the orders by phone. Firstrade provides a toll-free number, and the broker's representative places the orders by phone.
Fees when Trading with Firstrade
There's no commission for stock trading. Period. However, the Security and Exchange Commission fee of $20.70f or every 1 million in sale proceeds is passed through to the customer.
ETFs and options trading also comes as commission-free products, which is great for the investor.
So how makes money this broker?
One way is to charge a short-term redemption fee for mutual funds held less than 90 days. Remember that because of the large number of mutual funds provided, Firstrade is very popular among investors.
The fixed income section also is commissioned with a basic fee of $30 when trading Primary Market CD’s, for instance.
But all in all, the fee structure is transparent, seems fair, and easy to understand.
Fees: Are They Attractive?
Firstrade differentiates from competitors by providing lower fees in the industry. A quick broker comparison with names like T.D. Ameritrade, Fidelity, or Merrill Edge, shows Firstrade having unbeatable savings on options contracts – $0, while all the other brokerage houses charge $0.65/contract.
Stiff competition in the industry led to online brokers slashing their fees and commissions in a bid to attract and retain more customers. The good part is that competition brings improved services and a customer-oriented approach, creating an environment where only the best names survive in the long run.
Application Process
Step 1: Visit the first trade homepage and click on “Open an account.”
Step 2: choose the desired account you wish to open: whether a brokerage or a retirement account.
Step 3: The next page comes up; here, you fill in your first name, last name, and email address, and click “Continue.”
Step 4: If what you want is an international account, you can tap on “Open international account”. The international account is for non citizens or non U.S residents.
Lastly, verify your email.
Alternative Brokers
Here are our 3 choices of brokers which can use as a great alternative to Firstrade:
The house of Morgan has deep roots in the international financial system. You Invest by J.P. Morgan is just that – the low-cost arm of J.P. Morgan. While aiming for low-cost transactions and a limited investing offering, they feel safer knowing that the J.P. Morgan’s expertise is behind You Invest. After all, the two entities share the same customer service and educational material.
You Invest is best for traders not affording a traditional brokerage account and will settle with similar features but at a lower cost. Yes, the product offering is limited. Not all markets are present, and one may lack the flexibility to diversify the portfolio the way it may wish to.
All in all, this is one of the best brokerage houses tackling the new generation of traders. Born out of the desire to compete with rising stars like Robinhood, You Invest comes with J.P. Morgan’s expertise and knowledge in the brokerage industry.
Even among its own competitors, You Invest stands out. For instance, it has a strong social media presence and a simple pricing and product structure.
Tastyworks services are designed for active traders, and the company considers itself a partner for any retail segment investors. It offers technology and education tools that go beyond the regular traditional broker.
Together with Robinhood, Tastyworks challenges the traditional brokerage industry. This combination of new, innovative companies is the reason why many well established brokers slashed their commission.
Tastyworks specializes in futures and is likely to expand its services moving forward. Despite only being around since 2017, the management team has a long history with trading platforms, financial markets, and other brokerage houses.
Tastyworks is a great option for those interested in trading futures and options. There are few brokers that delve this deeply into the futures market, offering access to so many different markets. Tastyworks offers interest rate, grain, foreign currency, equity index, energy, and metal futures, providing a low cost option to access these financial markets.
E-Trade is a complete financial advisor and brokerage service for residents in the USA.
Both the desktop and mobile trading platforms offer in house assistance and tutorials. The E-Trade knowledge center covers most investment services and can be an invaluable resource for newbies who need an introduction into the world of financial market investments.
E-Trade’s Brokerage Account, its flagship account, allows members to reach an abundance of markets, providing superb diversification potential. However, regardless of whether you’re an individual trader, self employed, future retiree, or small company, E-Trade has something to offer everyone. This company has made investing transparent and diversified.
This platform suits active and passive investors. Active traders are likely to welcome the commission structure. E-Trade offers commission free trading on most stocks, mutual funds and ETFs, and low commission on options and futures. Passive investors will appreciate the variety of managed portfolios, as the advisory arm is one of E-Trade’s core strengths. E-Trade also has excellent retirement planning assistance, creating an ideal environment for beginners, particularly those new to the stock market.
Best For
This is an ideal broker for clients sensitive to high commissions charged by brokerage houses. It has one of the lowest possible fees in the United States while, at the same time, offers great orders execution.
International clients should find this particular broker appealing too. Investors from almost all regions in the world are welcome to open an account with Firstrade, with the promise of benefiting of similar trading conditions for most of the products, just like a U.S. resident or citizen does.
Therefore, if you look for a broker with low fees, that accepts international clients, offers great research tools and has a decent customer service, then look no further – Firstrade covers them all. On top of that, this is a regulated broker, so your funds are protected at any moment.
