Firstrade Review (2020): Zero Commissions for Traders of All Levels

Firstrade Review

As far as discount brokers go, Firstrade has always been one of the top selections. With free commissions on stocks and options trading, investors also never pay a commission on mutual funds. However, there is a catch when it comes to account minimums and account types.

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Firstrade - Reviews & Ratings

Firstrade is a top discount brokerage, offering $0 commissions on stocks and options trading, and robust tools, including a newly designed interface and mobile app.

FAST FACTS:
• Account Minimum: $500
• Fees: $0 on almost all stocks, ETFs, mutual funds and options
• Best For: Beginners and mutual fund investors
• Highlight: Low fees

Investor Warning: Online trading has inherent risk due to system response and access times that may vary due to market conditions, system performance, and other factors. An investor should understand these and additional risks before trading. Carefully consider the investment objectives, risks, charges and expenses before investing. All investments involve risk and losses may exceed the principal invested. Past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. Firstrade is a discount broker that provides self-directed investors with brokerage services, and does not make recommendations or offer investment, financial, legal or tax advice.

Firstrade has very humble beginnings dating back to 1985 in the neighborhood of Flushing, Queens, New York. The local community made up of largely Chinese immigrants was one of the first discount brokers and has remained true to these roots by cutting all of its fees and options contracts costs.

The discount broker now offers several virtual trading options, including a robust mobile app. It’s a great choice for active traders and options investors who want a simple order entry platform with more option spreads and nearly zero costs.

One of the main benefits of using Firstrade is its securities lending program. If you want to earn additional income, you can actually lend your stocks to other financial institutions, which could lead to higher profits if you have larger accounts. There are no restrictions on account holders, so you can sell your stocks at any point.

Overview and Summary

  • Firstrade offers zero commission fees on almost all trades, including stocks, ETFs, mutual funds, and options.
  • The web trading platform is easy-to-use with a quick interface that allows you to place buy and sell orders fast. In fact, Firstrade guarantees a 0.1 second trade execution time.
  • The Firstrade mobile app is quite new, but it allows you to make simple trades, view charts, and manage your accounts. It also syncs up with changes you make to your account through the website.
  • While there are a number of products available like stocks, ETFs, funds, bonds, and options, you cannot trade futures, futures options, cryptocurrency, or Forex.
  • While there are some research and education tools, you may get the most use from Navigator and Options Wizard. Navigator requires you to set up a Firstrade Premier account, which requires a $10,000 minimum account balance.

How Does Firstrade Work

Image of Firstrade Trading Platform

Firstrade has a pretty simple but functional trading platform. You can sign up online via their application. You can set up an individual, joint, or custodial account. However, you’ll have to use a different application set up a partnership, investment club, or trust.

You can set up the account as cash only or as a cash and margin account. Options trading can also be accessed. Live chat is available throughout the process if you need help.

Investors can take an active or passive approach to trading with Firstrade. However, it’s best for beginner investors and mutual fund investors. If you like free commissions and free options contracts, then it’s also superior to almost every other discount broker.

The platform is made for easy online trading for beginners, so you won’t find some of the more advanced features like automated bidding and trading, you can set up automated alerts with customizable options. For example, you can track stock positions and receive an alert to your email when a price drops or rises.

Investors will get the most use out of their browser-based platform called Firstrade Navigator. However, you’ll need an account balance of $10,000 to use it and set up a Firstrade Premier account. This a pretty big drawback if you were hoping to trade for the first time with much less. In that way, Firstrade is behind the latest apps from TD Ameritrade, E*Trade, and Fidelity.

The Firstrade Experience

In comparison to other virtual brokers, Firstrader has a pretty basic and functional platform. Still, placing orders is pretty intuitive, and there are complex settings for option spreads. However, you’ll have to manually enter spread legs, although there is a smart chain sheet to quickly enter the order.

Firstrade automatically calculates margin as the trade is constructed, but quotes do not always stream in real-time unless you refresh. If you are an active trader looking for automatic trading options, you won’t find them on Firstrade. Only manual ordering is available for products on Firstrade.

Basic Firstrade investors do not have access to the Navigator platform, which requires a Premier account and a $10,000 account minimum. In essence, you can’t access complex order types unless you have Navigator access.

Only the basic functions can be accessed through desktop and mobile apps. However, you can create orders based on information from screening tools, but you can only order trades for stocks, mutual funds, and ETFs.

Firstrade User Dashboard Showing Gains, Losses, Orders, etc

While you can view charts and streaming quotes, it’s difficult to make an order straight from these integrations. You will need to navigate back to the order screen to place most trades accurately.

Pros

  • $0 commissions on stock and options trades
  • $0 commissions on ETFs and mutual funds
  • Streamlined trading experience on desktop and mobile, but includes just the basics
  • Automated alerts and streaming real-time quotes available
  • Support for English and Chinese accounts

Cons

  • Limited functionality for active trading on web and mobile
  • Simple charting and order entry tools
  • Accessing more tools requires Firstrade Premier accounts, which need $10,000 account minimum
  • Customer support is lacking and may not be accessible via phone or live chat outside of normal business hours

What Can You Trade with Firstrade

Even though Firstrade only recently added Navigator for more active traders, it still uses single-page layouts with modular interfaces that can be difficult to understand if you are a beginner. You also have to apply for Navigator via email after setting up a Premier account. However, you can instantly gain access to it through the Apple Store or Play store for Android.

Firstrade has the following offerings for trades:

  • Stocks
  • Options
  • Mutual funds
  • Fixed income
  • ETFs

You will not be able to access forex, futures, futures options, or cryptocurrencies on Firstrade. There are also advanced features for options trading allowing for up to four legs per spread.

Unlike many other discount brokers, Firstrade does not currently offer any robo-advisors, but the platform announced that it would be adding this technology soon as of 2019.

Opening an Account

New investors to Firstrade can open a brokerage account online, but it takes awhile to get setup. In fact, it took 3 days to open an account due to the slow verification process.

There are some restrictions on who can join the brokerage, but all US customers are welcome. You will have to provide verification documents for your residency and citizenship.

Analysis, Charting, and Research Tools

Firstrade has several tools for research, screening, and testing. The best one is probably the stock and mutual fund screening tool, but you can only use it on the web browser edition. If your requirements are not too complex, then entering trades is easy through the screening tool.

Morningstar and Briefing.com offer news and trends from very reliable sources, and you can also check news from trader favorite Benzinga.com. Through OptionPlay on Firstrade, you can look at different ideas for options and analyze trades or spreads in comparison with real-time data. You can find this tool under options chain sheets, which makes it somewhat hidden.

Charting is available on the browser and mobile app edition. The browser screens have basic charting capabilities that you can’t customize. If you sign up for Navigator through Firstrade Premiere, then you can access customizable charting tools using MultiCharts under TradingView.

While there are a few portfolio analysis tools and accounting features included with Firstrade, it’s not as robust as with TD Ameritrade or other leading online brokers. Investors can monitor their positions and watchlists, and you can download account history and statements in real-time.

However, you’ll need external tools to analyze the reports more precisely. Quicken, custom Excel sheets, and Microsoft Money can provide more functionality, but it’s not included.

This means that beginner investors need to know more about trading analysis to use these reports and access different tools.

Investor Education

A number of links and videos can be found within Firstrade’s knowledgebase. These provide trading strategies and a better understanding of available markets.

If you’re new to investing, some of the information will be helpful, but it’s hit or miss. Much of the articles were produced for studying options and pertain to more advanced strategies.

Truthfully, the education section of Firstrade is a bit outdated and includes several dead links. Most of the tutorials and tips do not pertain to the current trends and conditions. You will also not find any new webinars or learning events through social media or the main website.

Most of the content is provided externally through partners, but you will have to look for other sources to get more current tips and information.

Account and Investment Costs

One of the things that Firstrade does best is commission-free trading. For traders who want the lowest cost and do not mind the lack of tools or education resources, that’s exactly what Firstrader can help with.

All stock, option, and ETF trades have $0 commission fees. You can also lower the cost of securities trade by lending your shares for daily income through Firstrader’s program.

There is a trade-off for lower cost trades. To use some of the advanced features and take advantage of lower costs, you’ll need a Firstrade Premiere account, which requires that you have $10,000 account minimum. Firstrade also charges higher margin rates than other brokers. There are also fees for different account transactions, such as higher fees for ACAT out transfers and wire transfers.

Mobile Trading Features

Firstrade Mobile PlatformFirstrade offers a mobile app that is simple to use for trading and offers Face ID recognization and login. Stock watch lists sync with any changes you make on the website, and you can check real-time streaming quotes on the app as well.

You can view charts and options chains inside of the app, along with 19 other studies for stock charts. There are not too many alerts you can set up, and stock charts are sometimes hard to read because Firstrade does not support horizontal views on the app.

Advanced order types such as complex options are not supported on the mobile app. In this area, Firstrade falls short compared to Fidelity, TradeStation, E*Trade, and TD Ameritrade.

Account Minimums

To sign up and use the basic Firstrade account, you don’t need an account minimum. To use Firstrade Premier and the Navigator platform, customers will need to have an account balance of $10,000. You can view your positions and balances in your account through an all-in-one dashboard, which includes customization of news, charts, and tracking.

Advanced Screening Tools

The advanced screener also helps you look for new high-quality stocks, such as large growth stocks or bargain small-cap funds. You can download your investment choices to get more strategies.

The Options Wizard also gives you analysis of your gains and losses for options trading with more than 40 different options strategies.

International Features

Many brokerage firms cater to US clients only, but Firstrade accepts new customers from South Korea, China, Hong Kong, Macau, Taiwan, Singapore, New Zealand, Mexico, and Japan.

It’s also one of the only platforms that support native Chinese speakers. You can see the platform in traditional or simplified Chinese language.

Referral Program

Firstrade offers customers a free stock for themselves and a friend when they refer them to the brokerage. There is a 1 out of 100 chance that it could be a Facebook, Apple, or Microsoft stock, according to Firstrade.

Trading Tools

While Firstrade does not have a downloadable platform, you can use its browser-based platform to make trades. You can use the trading tab to quickly buy and sell most stocks, ETFs, and options. There are some basic functions like bid-ask spread, volume, and last trade price.

Options have more fields to fill out to place a trade. There are a few multi-leg strategies, including straddle, butterfly, and condor. You can use the Options Wizard to search bull and bear options ideas.

Security

Firstrade protects investors for $500,000, and it’s also regulated by the SEC and FINRA. However, you will not receive alerts for negative balances, and Firstrade is not listed on the stock exchange. During testing, Firstrade only had one-step login authentication, which means there is a cybersecurity issue since most modern-day platforms use two-step authentication factors.

Funding, Payments, and Withdrawals

You can deposit with an ACD funds transfer, check deposit, or wire transfer. There is no withdrawal fee for ACH transfers, but if you use a wire transfer to withdrawal, you will be charged $30 for domestic and $50 for international.

Customer Support

Firstrade Customer Service Webpage

Sammi is the new AI chatbot available to Firstrade clients. It can answer some basic questions, but you’ll be linked to different areas of the website for more complicated answers.

There isn’t a 24/7 phone support option either. Customers can access Firstrade customer service Monday through Friday from 8 AM to 6 PM, EST. Their support is not available on the weekend.

You can use live chat for other issues, which is available through the website. The representatives are helpful and provide any knowledge you need.

For everything else, you will have to rely on the FAQ section of the website or you can send an email to Firstrade’s support team.

Mutual Funds

There is a screener and profile page for mutual funds on Firstrade’s website. Most of the fund’s information comes from Morningstar and places it on the profile page, so they are the same as everything you would find on Morningstar’s website.

You can use the mutual fund screening tool to show you all products available. You can buy and sell mutual funds for free. There is a short-term redemption fee of $19.95 that applies to any mutual fund shares held less than 90 days.

Tricks to Using Firstrade Like a Pro

  • Sign up for a basic account through a referral to get one free stock with Firstrade’s promotional offer.
  • Use Options Wizard to get more trading ideas and test up to 40 different ideas.
  • Get trading ideas for stocks, ETFs, and mutual funds through Firstrade’s partner Morningstar.
  • You can use up to 50 technical indicators to customize and edit charts on the website.

Latest News About Firstrade

The recent news about Firstrade includes high ratings from Kiplinger’s Personal Finance, which named Firstrade as the best online broker for 2019 for active traders due to their low commission fees.

In addition, Firstrade added NICE Actimize SaaS to secure their platform and protect against money laundering.

What Rocks About Trading with Firstrade

Firstrade is considered the cheapest online brokerage. You can trade stocks, ETFs, options, and most mutual funds for a $0 commission. Their options contracts are also the lowest in the entire industry.

The trade bar on the Firstrade website is easy-to-use and has more functionality than most browser-based platforms.

Traders will love the 0.1 second execution guarantee by Firstrade, but this is only for S&P 500 equity market orders. If an order takes longer, the commission fee is removed.

The mobile app is pretty robust and free for iPhone and Android users. You can sign up and access charting tools, basic trade analysis, and all of your accounts, as well as simple ordering functionality.

What Firstrade Could Do Better

One thing that Firstrade does not make clear is that more advanced options and tools are only available in the Navigator platform, which requires a Firstrade Premier account. This requires a $10,000 account minimum. While there are basic tools available for the free account, you won’t be able to customize or view more complex charting tools with a basic account.

In addition, Firstrade does not have the best customer service options. You can access their customer phone support during business hours only. Other brokerage firms offer 24/7 customer service. There aren’t any physical locations to get help either, except for headquarters in New York.

You won’t have the largest mutual fund selection at Firstrade either. There are far more funds accessible on TD Ameritrade and even WellsTrade.

There are no robo-advisory options either, so if you need help, you’ll have to seek out a third-party advisory tool or take a chance. This doesn’t help much with risk management.

In addition, you cannot trade futures, forex, or futures options with Firstrade either, but there are a ton of retirement investment options like IRAs.

Conclusion: Should You Invest with Firstrade?

Firstrade is the most innovative and cheapest when it comes to zero-commission trading. It’s considered the best discount broker of all because it does not even charge for options contracts or mutual funds. If you are an international investor, then you also can find support with Firstrade. However, it’s not as robust as other platforms for trading products like forex or futures.

Overall, investors will like Firstrade if they want zero commissions and have some trading experience. Beginner traders may also find it useful, but they should rely on customer service help and live chat features during business hours to learn more about the platform before digging in.

About Author

Tim Fries Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim is also the co-founder of Protective Technologies Capital (protechcap.com).