Firstrade rating

Firstrade Review


Firstrade Pricing and Minimum Deposit


InvestmentsCommissions
Stocks and ETFs $2.95
Stocks, ETFs, and mutual funds broker assisted $19.95
Options $2.95 + $0.50 per contract
Mutual funds $9.95
Treasury Bills, Notes, Municipal and Agency Bonds, Zeros & Strips net yield basis
CDs $30 for primary market CDs, net yield basis for secondary market CDs

Investments stocks, options, mutual funds, bonds, CDs, ETFs
Firstrade minimum deposit to open account $0
FeesFirstrade fees
Promotion linkFirstrade promotions


Overview of Firstrade Securities


For a long time, Firstrade Securities (member of SIPC) was the unknown player in the brokerage world. Now it's trying to change that, and it has done a remarkable job by rolling out an amazing offering of commission-free ETF's and the lowest pricing on stocks and mutual funds. Nevertheless, it still lags behind in some areas. This 2018 Firstrade review will show you where.


New Account Setup


Opening an investment account at Firstrade Securities is quick and easy using the broker's handy online account application form. First, click on their current promotion: Up to $300 Cash Rewards + 500 Free Trades. At the top of the menu is a button aptly entitled 'Open an Account". Clicking on this produces a page where you can enter your name and e-mail address. Doing so generates a new page where more detailed information can be entered, such as account type desired. Many different versions are available, such as individual, joint, and custodial accounts. Trusts, partnerships, and investment clubs can be opened, too, although a paper form must be used.

During the application process, an account can be set up as cash-only or as cash and margin. Options trading can also be appended. The on-line application displays a toll-free phone number for applicants who have any questions, and live chat is also available.


IRAs


Firstrade IRA Rating

Firstrade offers several Individual Retirement Accounts, including Roth, Traditional, Rollover, SEP, and SIMPLE accounts. They are no-fee IRA's, which means you won't have to spend a dime to open one, maintain one with any balance, or close one. The brokerage firm frequently offers promotional specials for opening an IRA. Coverdell education accounts are also available.


Firstrade IRA Review


The Firstrade website has some good retirement calculators. One is entitled 'Should I convert to a Roth IRA?' It takes various inputs should as current IRA balance and projected retirement age, and then shows a comparison of monthly retirement income between Roth and Traditional versions. Other calculators estimate future retirement income from an IRA, and how much you should be contributing to a retirement account.

We looked for a dedicated retirement phone line at Firstrade, but didn't find one. This probably means the brokerage firm doesn't have retirement specialists, which is a drawback. We also couldn't find any information about individual 401(k) plans.


Customer Support


Firstrade Customer Rating

Firstrade recently added an AI chatbot to its site. It's named Sammi. During our testing, it was able to answer simple questions, but for more detailed information we were directed to a web page. Strangely, Sammi wasn't available after we logged into the website.

While this new addition is exciting, the broker still doesn't offer 24/7 phone service. Firstrade representatives are available Monday through Friday, from 8 am till 6 pm, EST. There are no weekend hours. Firstrade does hold a Saturday session from 10 am till 2 pm at its headquarters in New York, which is the only physical location it has.

Although the weekday hours are rather limited, Firstrade does provide live chat on its website during these times. Whenever we have used the service, we have found the representative to be helpful and knowledgeable.

The self-help section on the Firstrade website is decent. There are account-related FAQ's, a very extensive forms section (all in pdf format), and an upload tool after you fill out the form. Other helpful info posted in this section includes one global phone number, a service e-mail, and a fax number.


Firstrade Commissions, Fees, and Account Requirements


Firstrade Fees Rating

During the 2017 broker price war, Firstrade didn't fall asleep. It responded by lowering its stock and ETF commission to $2.95, which is one of the lowest rates in the industry. (There aren't many ETF's at Firstrade where you'll actually have to pay this. More on that later.) Option contracts are just 50 cents extra.

If you place a trade with a live agent over the phone, Firstrade tacks on an extra $17. Penny stocks carry a surcharge of 0.5 cents per share. The brokerage firm defines a penny stock as anything less than $1.

Most fixed-income transactions are priced on a net yield basis, which means there's a markup or markdown in the price. Primary market CD's cost $30 per transaction.

As with IRA's, a regular brokerage account carries no on-going fees of any kind, and there is no minimum deposit requirement. Firstrade does charge a steep $75 to move an account to a rival firm, and partial transfers are $55, another steep charge. Firstrade's DRIP service is free.

Margin accounts are available at Firstrade, and the broker currently charges between 5.0% and 9.25%, depending on the amount borrowed.


Mutual Funds


Firstrade Mutual Funds Rating

Firstrade doesn't have a mutual fund section to speak of. There is no page with general information about them. The broker-dealer does offer a screener and profile pages for funds. Firstrade simply takes information from the best mutual funds rating agency - Morningstar - and places it on each fund's profile page. Fund profiles have the same look as you would find at Morningstar.


Firstrade Review - mutual funds


Using Firstrade's mutual fund screener, we found 8,340 products that were open to new investors. The broker's screener doesn't have the ability to search by NTF status. One has to think it wouldn't be that hard to add the function, but Firstrade still hasn't done so.

It is possible to look for no-transaction-fee funds by logging out of your Firstrade account and going to the mutual fund section that is advertised to new customers. You'll find this by clicking on 'Research & Tools' in the top menu and then selecting 'Mutual Funds.' Next, you can click on 'NTF Funds' and find 334 of them. Unfortunately, there's no information shown on Morningstar rating; so it's not possible to sort the list by this variable.

Using the screener, we found 3,213 no-load funds. This is a sizeable list, but most will come with a transaction fee. It is $9.95, and this is charged for every transaction. This is the lowest rate in the industry matched only by Ally Invest.


ETF's


Firstrade ETF Rating

While we weren't overly impressed with Firstrade's mutual fund offering, the broker-dealer hit a home run in the ETF section. It now offers more than 700 exchange-traded funds commission-free. This is currently the largest list in the industry. On Firstrade's list, we found over 500 ETF's rated 3 stars or above by Morningstar. More than 600 are followed by Morningstar analysts.


Firstrade Review - ETFs


In return for a free trade, Firstrade does require you to hang onto the ETF for at least 30 days. If you don't, you're only charged the broker's $2.95 commission, another great aspect of this plan. There is no enrollment required for Firstrade's ETF schedule.

Firstrade's ETF screener has the same layout as the mutual fund screener, and once again, it doesn't have the ability to search by NTF status. It seems awfully bizarre that Firstrade would roll out this fabulous program but not add the ability to search by NTF status.

As with mutual funds, if you log out of your account, and use the front website you'll find a list of the specific ETF's that are available with zero trading fees. Currently, there are 703 of them. Fund families include iShares, WisdomTree, and Invesco.


Promotion




Fixed Income


Firstrade Bonds Rating

Next in this 2018 review of Firstrade is fixed income investing. Bonds are available at Firstrade, and the brokerage house offers corporate, municipal, agency, and Treasury securities. STRIPS are also on the Firstrade site. We were disappointed not to find a bond page with detailed information about debt trading. The front page simply has a list of debt by maturity date. Clicking on one of the hyperlinks produces a list of bonds that can be sorted by rating, minimum quantity, coupon maturity, and price.


Firstrade Review - bonds


Clicking on a specific bond produces an order ticket with more detailed information, such as payment schedule, accrued interest, and CUSIP number. Here, you can enter a quantity and preview the order.

There's also a list of new issues and a bond calculator.


Trading Tools


Firstrade Trading Tools Rating

Firstrade doesn't have a desktop platform, and this lapse is going to subtract one star right off the bat. Also missing is a browser-based platform. Despite these failures and its low fees, the broker does provide some decent trading tools. At the bottom of the browsing window sits the trade bar, and it is expertly designed.


Firstrade Investing Review


The trade bar can be used to quickly buy and sell stocks, ETF's, and options. Its initial layout is in minimized form. Here, you'll find basic trade information, such as bid-ask spread, last trade price, and volume. There are three small icons on this minimized bar: news, research, and charting. Clicking on one of these icons takes you to the appropriate web page.


Firstrade Trading Review


The trade bar can be expanded by clicking on a double arrow on the right side. Once expanded, it's possible to place a trade. There is a stock tab for equities and an option tab. One feature we really liked was the ability to show option chains for the entered ticker symbol above the trade bar. When we clicked on a bid or ask price for a particular option, its data was automatically populated into the trade ticket. Moreover, a few multi-leg strategies can be displayed in the chains.

After the trade bar, the next place to submit orders is the website. Order pages are pretty basic, but they get the job done. For stocks and ETF's, duration choices include day, good-till-90, pre-market, post-market, and day+EXT. Besides stop, market, and limit orders, there are also trailing orders.

The order form for options offers all the fields needed to place a trade. A few multi-leg strategies are available, including condor, butterfly, and straddle. We were hoping for more. One feature we did like was Options Wizard, which we'll discuss in the research section.

After logging in, the home page provides a decent summary of the day's market activity. A chart window displays movements of indexes, while another window shows account balances. Also on tap are market movers, news articles, and an order status window.


Mobile App


Firstrade App Rating

If you're on-the-go quite a bit, Firstrade has a mobile app you can use to buy and sell securities. It has other important features, too. These include charting and live chat with a Firstrade associate. Options can be traded on the app, but not mutual funds.

The best way to get started on the app is to tap 'Trade' on the front menu. Here you can enter a ticker symbol, and the app will generate a summary of the stock's vital data. Volume and last trade price are shown with a small graph at the bottom of the display. Swiping the graph to the right replaces it with news articles, and swiping once again generates more detailed info, such as P/E ratio and market cap.


Firstrade Review - Mobile


Clicking on a graph symbol at the top of the small graph produces a full screen graph. It can be expanded out to five years, and the chart style can be set to candlestick, OHLC bars, hollow candles, line, area, or Heiken Ashi.

There are roughly 20 technical indicators, not a bad number for a mobile platform. If you add too many at one time, the small mobile screen quickly becomes cluttered. One charting feature we liked was the ability to change the colors of every part of a graph. We were able to change the background color, the color of the price action, and the color of the studies.

What we didn't like was Firstrade's failure to allow a graph to be rotated horizontally. This is an important function that makes charting so much more usable on a mobile device.

In addition to this lapse, Firstrade also failed to include mobile check deposit and bill pay. Moreover, there is no funds transfer; and the app still doesn't have streaming financial news.


Banking Features


Firstrade Banking Rating

If you need cash management tools at your brokerage firm, Firstrade's got you covered. The company provides a Visa debit card and checks at no cost. There are no on-going fees, such as annual or low-balance charges. However, the brokerage firm does require a minimum account balance of $25,000 to apply for banking features, and it doesn't reimburse ATM fees.

Once you attach checks and the debit card to your brokerage account, any free cash balances you have will be insured by SIPC and not the FDIC. This is because the account remains an investment account and not a bank account. Firstrade does not offer any traditional bank accounts, although free cash balances do earn an interest rate of 0.04%.


Investment Education and Research


Firstrade Customer Rating

If you need to brush up on investment strategies or general financial education, the Firstrade website has some short articles and videos that can help you make more informed trading decisions. There are materials on stocks, bonds, options, ETF's, and mutual funds. Some of these are rather short, which subtracts one star.


Firstrade Education


We were especially impressed with the information available on options. We were able to download a pdf book from The Options Industry Council that covered all the basics of derivative trading. There is also a very helpful search tool called Options Wizard on the Firstrade site. This provides bearish and bullish options trading ideas. It also suggests specific trades for an entered ticker symbol.


Firstrade Options Trading


If you need to learn more about trading on margin, there's an extensive section that discusses several important aspects of using loans. A detailed glossary has many definitions of investment terms.


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Comparison


Now it's time for the ultimate test, which is the comparison to alternatives. In the retirement category, Firstrade does better than Merrill Edge and Fidelity by not having an IRA closeout fee. However, Firstrade's lack of a solo 401(k) plan underperforms TD Ameritrade, who offers one with zero fees.

One glaring disappointment at Firstrade is the lack of a desktop or browser-based platform. Ally Invest has a browser-based platform, while Interactive Brokers has a desktop system. It would be nice to see Firstrade add at least something basic.

On the positive side, Firstrade is one of the few brokers to have a trade bar on its website. WellsTrade and Vanguard don't have one.

Firstrade's commission schedule beats most discount brokers, including low-cost firms like Fidelity, Ally Invest, and Schwab.

The mutual fund selection at Firstrade is smaller than TD Ameritrade's and WellsTrade's, but larger than Merrill Edge's. Firstrade is the only broker we know of who doesn't have a screener with the ability to search for NTF funds.


Firstrade Pros


Firstrade’s new commission schedule places it as one of the cheapest online brokers today. At $2.95, its trading fee is lower than WellsTrade ($5.95), Fidelity ($4.95), and TD Ameritrade ($6.95). Its option commission is also one of the lowest in the industry.

The 700 ETFs that could be traded for free is way more than what is offered at any other brokerage house. The nearest competitor, TD Ameritrade, offers 296.

The trade bar on the Firstrade website is very user-friendly and provides many more usable functions than the trade bars of other brokers. Vanguard doesn’t even have one.

Firstrade has a 0.1 second execution guarantee for S&P 500 equity market orders. If an order takes longer than a tenth of a second to fill, the commission is waived.

The brokerage house has several on-going promotions. These offer free trades and cash bonuses (Up to $300 Cash Rewards + 500 Free Trades.) that start with just a $2,000 deposit. Other specials include rebates on wire transfer and account transfer fees. There are also bonuses for referring new customers to Firstrade.

Firstrade’s online chat service is consistent and helpful. Other brokers, including Vanguard, TIAA, and Robinhood, don’t offer the service at all.


Firstrade Cons


Firstrade has no weekend customer service hours. Combined with no weeknight hours, this broker doesn’t do a sufficient job of taking care of the customer. Other brokers provide 24/7 phone service. These companies include Merrill Edge, Schwab, and WellsTrade. Firstrade also has no branch locations, whereas E*Trade has thirty.

The mutual fund selection at Firstrade is smaller than at some competitors. WellsTrade and TD Ameritrade, for instance, offer more funds.

The lack of a desktop trading platform is a big disadvantage when other brokers do have one at some price. TradeStation, for example, offers both a browser-based environment and a desktop program.

Firstrade does not offer any investment advice or managed accounts, which means there is also no robo-advisory option here, either. Many brokers today do offer these financial services, including Fidelity and E*Trade.

The broker’s option chain software does not have many pre-defined strategies, like butterflies, collars, and strangles. TradeStation’s software has all of these and more.


Recommendation


For obvious reasons, Firstrade would be a great broker for ETF traders. Although the fund screener still isn't able to search for NTF funds, there is a workaround this, as we pointed out. The broker's 30-day minimum hold period should work for the vast majority of traders.

For equally obvious reasons, Firstrade would not be a good broker for investors who need assistance with portfolio management. Although the broker has a great commission schedule, we also can't recommend Firstrade for active traders because it doesn't have a desktop platform.

Firstrade would be a good brokerage firm for retirement savers who don't need a lot of guidance. Beginning investors will also benefit from Firstrade's educational resources, although other brokers do have more extensive collections. Investors with a small amount to deposit will like Firstrade's no-fee policy with zero balance requirements.


Firstrade Review Summary


In 2018 review Firstrade Securities earned 5 stars in two categories: pricing and ETFs. If cost or value is a major concern to you, the broker is hard to beat.


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Firstrade Margin Rates


Debit Balance Margin Interest Rates
above $1,000,000 5.00%
$500,000 - $999,999 5.75%
$250,000 - $499,999 7.50%
$100,000 - $249,999 7.75%
$50,000 - $99,999 8.25%
$25,000 - $49,999 8.75%
$10,000 - $24,999 9.00%
$0 - $9,999 9.25%



Firstrade IRA Fees


Fee Amount
Firstrade IRA setup fee $0
Firstrade annual IRA fee $0
Firstrade IRA termination fee $0
Firstrade account maintenance fee $0
Firstrade account inactivity fee $0
Firstrade outbound full account transfer (ACAT) fee $75
Firstrade outbound partial account transfer fee $55


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Firstrade reviewed by Brokerage-Review.com on . Rating: 4