In the past, investing in stocks and options was strictly for those who had a decent amount of money and who could afford to invest after factoring in all the fees and commissions. With the advent of low cost online brokerages, however, just about anyone can start investing.
Firstrade was one of the first online trading platforms offering low-cost trading services for stocks, bonds, and mutual funds. In this review we’ll delve into this platform in more detail to help you decide if this low cost brokerage is the right choice for you.
- Commission-free stock, ETF, options trades.
- No account minimums.
- Great research and educational tools.
- Easy to use mobile app.
The Firstrade Basics
Firstrade has been around since 1985 but under the names First Flushing Securities and Firstrade Securities. It became one of the first online trading platforms as Firstrade.com, offering a relatively easy-to-use platform with research tools to help beginners to intermediate traders.
It also has some interesting features, which may appeal to advanced traders, particularly those who want to access crypto and foreign exchange trading.
There is no minimum initial account deposit and there are a number of tools, calculators, and resources to assist investors of all experience levels.
One of the drawbacks of low-budget online trading platforms is usually a limited number of services, but this is where Firstrade separates itself from the pack. This platform is available for traders in a variety of countries, with numerous language options to access an impressive range of assets.
Although Firstrade is not a full-service brokerage, it does have a well-rounded selection of choices compared to many of its competitors. You can access options, stocks, ETFs, cryptocurrencies, mutual funds, bonds.
These last two are particularly significant, as they play an important role in a successful investor's portfolio. If you’re a retail investor, these products are likely to represent a significant part of your long-term holdings. This provides Firstrade with an important edge over many other online platforms, as you can use Firstrade for your whole portfolio, rather than having to use different tools for short and long-term investments.
Although Firstrade is built around a website interface primarily, there is also an app that seamlessly syncs with its web-based trading. You can open a variety of types of accounts including educational, IRA, ESAs, business portfolios, and more.
The Firstrade platform has a number of interesting features that make it an interesting option. These include:
- Access to International Accounts: In addition to the typical offerings from stockbrokers, Firstrade provides access to international accounts. This means that if you are a citizen of certain countries, you can invest in the U.S financial markets via Firstrade.
- DRIPs: Firstrade allows you to sign up for the DRIP (Dividend Reinvestment plan) program. When you do, you will automatically be enrolled in the DRIP for any stock offering the plan. The eligible stocks must be at a minimum price of $4 per share. You can sign up for the program or cancel your participation at any time.
- Upcoming IPOs List: This service provides you with a list of upcoming IPOs each month. This includes the company and its symbol, the price and the market it trades in, the offer amount, the number of shares, and the expected IPO date.
- Advanced Screener: This tool allows you to narrow down your investment possibilities using predefined screening criteria. This allows you to screen for value-priced, small-cap stocks, high-yield stocks, and dozens of other criteria.
- Educational Resources: This platform has a number of educational resources including articles, instructional videos, e-books, and podcasts. This can be a valuable resource for new investors to develop their skills while other investors can expand their knowledge base. There is also access to Benzinga, Zacks, Briefing.com, and Morningstar research.
- Cash Management Account: You’ll need $25,000 or more in equity to open a cash management account, but it does allow you to trade, access funds, and spend money in one location. There is no annual fee and you’ll get travel and accident insurance if you purchase your fares with your account’s Visa debit card.
- Tax Center: Firstrade has a dedicated tax page and it provides crucial data for investment purposes. You can access and print tax forms including your 1099, 1040, 8949, and other related forms. There are also tax topic discussions such as short sales, wash sales, capital gains, and other subjects.
- Account Protections: All accounts have SIPC (Securities Investors Protection Corporation) coverage for up to $500,000. There is also Firstrades’ Online Protection Guarantee, which will cover 100% of any losses caused by unauthorized activity on your online account.
The Firstrade Platform and Tech
Firstrade has two portals for its online trading platform. The primary brand is Firstrade, but there is also a secondary brand, Firstrade Navigator. Both offer different types of securities, are competitively priced, and offer the ability to engage in trading with high-caliber research tools.
The standard Firstrade platform operates on desktops and mobile devices. There are two information columns as a default. The first provides a snapshot of your order status, value charts, and listing balances, which allows you to see immediately your performance over time. The second has market information, so you’ll see leading stock market index statuses, the latest news headlines, and the biggest winners and losers of the day.
You can customize these columns, so the information you want to see is at the top. There is also a quick order entry panel where you can find quotes, make trades and compare options in one location. It is also possible to set up more advanced trade orders such as conditional orders to auto-execute, trailing stops, and more.
The mobile app provides a simplified version of the standard Firstrade platform. It features a consolidated portfolio view, options trading, watch trades, and smart menus.
If you’re looking for a platform with more power, the Firstrade Navigator may appeal. This interface offers more advanced market data, technical charting, and customizable widgets for graphs and research.
Firstrade Fees and Charges
Firstrade is a low-cost trading platform with minimal fees and charges. This was one of the first internet brokers to offer completely free trading in ETFs, stocks, options, and mutual funds. There are also no annual fees, inactivity fees, or account maintenance fees.
The fees you should be aware of include:
- Mutual fund short term redemption fees: $19.95
- Transfer fees: $55 partial, $75 full
- Bond trading fees: Net yield based.
- Broker assisted trades $20
- Margin trading: Starting interest rates of 8.75%
Financial Calculator Tools
Whether you’re a newbie or an experienced investor, financial calculators can help you to determine if you’re on track with your investment goals. The Firstrade financial calculators can help you to determine:
- How much you need to save for college
- Your optimum IRA contributions
- Your current net worth
- The retirement income your IRA will provide
- What your qualified plans would be worth in retirement
- Whether your current retirement savings will be sufficient
- How you should allocate assets
- The value of a put or call option
- The returns on real estate investments
Firstrade Research Tools
One of the impressive things about the Firstrade platform is that it offers a variety of research tools. These include:
Streaming Watch Lists
You can create as many as 10 watch lists featuring up to 50 ticker symbols. This will allow you to see real-time streaming quotes. This can be invaluable if you’re looking to see an idea of when you should make your move. Each of your watch lists will have one-click access to the live trading charts page on Firstrade.
We’ve touched on this earlier, but it is such a valuable research resource that it is worth discussing again. Access to daily Morningstar reports will help you review some of the best stocks and get in-depth analysis from a well-regarded data source.
You can set customized alerts according to the criteria you specify. This will allow you to receive information instantly when certain requirements are met. This reduces the need to always have one eye on your computer screen.
The Firstrade Options Wizard
Options Trading is one investment area where Firstrade stands out from many other online brokerage platforms. However, Firstrade not only provides access to options but offers a number of tools to help you to improve your options trading game. The most useful is the Options Wizard.
This is a tool that provides instant feedback on the value of the option and the likelihood of success with any trades you may want to make. The wizard uses innovative and pro-grade analytics to transform market data into information you can use. This actionable information includes trend indicators (one month and six months), trading strategy checklists, support and resistance levels, technical and fundamental rankings, over 65 technical indicators, profit and loss stimulators, and over 40 complex options strategies.
Firstrade Premier Account
Firstrade also offers premier services in the form of its Gold Account. This is available for those with an account balance of $50,000 plus. It offers all the features available with a basic account, but it also provides a dedicated representative and a reduced fee structure. This includes reduced fees for account verification letters, stop payment orders, internal asset transfers, and copies of personal checks.
There is also a Platinum service level for those with account balances of $100,000 plus. This also offers a dedicated representative, but fees are waived for account verification letters, stop payment orders, internal asset transfers, and copies of personal checks.
However, what either premier account does not add is any type of account management including a robo advisor, which is offered by some of the competing platforms at this investment level.
Online trading can be remarkably complicated, so it is no surprise that many new investors find trading platforms a little daunting. New investors tend to prefer a layout that will help them to learn while still managing their funds competently, while sophisticated investors need a platform that will navigate a vast selection of investment choices and possibilities with ease. Firstrade does an adequate job of managing the expectations of both.
The layout does take a little getting used to, as there is a learning curve to find the information you need and how to create custom data sets. However, each individual asset has a well-laid-out screen that allows you to immediately view critical technical data, news, and analysis.
The overall layout of Firstrade does highlight that this is a budget brand trading platform, but this is the compromise that you will find that you have to make with most platforms if you opt for the low fee alternative.
So, if you’re looking for an all singing, all dancing trading platform, you may be disappointed with this and most other low-cost trading platforms.
Pros And Cons Of Firstrade
As with all financial products and services, there are both positives and potential negatives associated with Firstrade. It is important to be aware of these before you make a decision about which platform is best for you.
- No Commission Fees: Commission-free trades on stocks, options, cryptos.
- No Inactivity Fees: Unlike many low-cost trading platforms, Firstrade does not have any inactivity fees. This makes it ideal for casual or newbie investors who are simply dipping their toes into investing waters.
- No Account Minimums: While there are account balance tiers for the premier levels, the basic Firstrade platform has no account minimums. This is great for those who don’t have a large investment fund but want to get into trading.
- Great Research and Educational Resources: Despite being a low-cost trading platform, Firstrade offers a great selection of research and educational resources. This is particularly true for options, which can be a great way to ensure your portfolio is balanced.
- Customizable Dashboard: Although there is a learning curve, the customizable dashboard makes it easy to see and track the information you need most in a prominent screen location.
- Multiple Languages: Not only does the platform open up US markets to foreign traders, but Firstrade is available in multiple languages including Cantonese and Mandarin.
- Advanced Trading Orders: While the platform is quite straightforward for newbies, you can also access advanced trading orders such as trailing stops or conditional orders, which can be useful for more experienced traders.
- Extended Trading Hours: React to market news during pre-market and after-market hours sessions with extended hours trading from 8am – 8pm ET.
- Uncompetitive Margin Rates: Although you can access trading on margin, the rates are relatively expensive and there are more competitive options elsewhere.
- Only US Markets: There is no international trading with this platform.
- Basic Research Tools. The research tools are quite limited, so you may need to do serious research for potential investments elsewhere.
- Limited Support Options (although good support): There's no live chat available, although phone and email support have decent reviews. Firstrade received Kiplinger's award pick for best online broker 2021 for customer service.
- PFOF: This is a controversial topic, as Firstrade relies on PFOF (Payment for Order Flow) as an income stream. This does create a potential conflict of interest, as Firstrade may prioritize exchanges that pay more rather than offer the best services.
Firstrade is a decent platform for investors who want to focus on trading conventional assets, such as ETFs, bonds, and stocks. It is ideal for casual investors as it is one of the least expensive available trading platforms. You can access support via email, or phone, and it even offers broker facilitated trades, if you’re a complete newbie and struggling.
Firstrade is also a good possibility for options traders, as it does not charge a per-contract fee. While there are many brokers that don’t charge commissions, many charge a fee for every options contract.
It is also a good choice if English is not your primary language, as the website and tools are translated into multiple languages and live support is also available in different languages including Cantonese and Mandarin.
Where the platform is a little lacking is the limited variety of product offerings, as there are no forex, futures, or international investments. Additionally, Firstrade does not offer fractional shares.
Advanced traders looking for a sophisticated platform with alternative asset classes and extensive tools may find Firstrade lacking, but the straightforward platform is beginner-friendly and definitely worth a look for most investors.
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