Review of: Firstrade
Reviewed by: Kevin Mercadante
Last modified: October 1, 2018
Firstrade was one of the first online stock brokers around, but the company recently kicked things up a notch by offering free trades — even for options. The platform also offers plenty of tools and resources to help you get started if you're a new stock investor. However, unlike other stock broker options, Firstrade doesn't offer a robo advisor.
- Free trades
- Low minimums
- Options traders
- New investors
- Penny stock investors
- Local branches
Firstrade was one of the first online investment brokerage services. The platform offers a full range of investment and trading services. And while it has always been a low-cost brokerage, Firstrade recently made the decision to slash fees on most trades — including options trades — to $0.
What Is Firstrade?
The company began as First Flushing Securities back in 1985. It continued to grow, largely by integrating operations on the internet. By 1997, the company was renamed Firstrade Securities, Inc. It launched Firstrade.com as one of the first online trading platforms.
Along with investment products, Firstrade offers calculators, tools and educational resources. It also includes proprietary trading technology as well as an intuitive user interface. Also, Firstrade requires no minimum initial account deposit. It is one of the better platforms for self-directed investors and for new and small investors.
In August 2018, Firstrade had its own “Stop the Presses!” moment by announcing that it would make all trades — excluding broker-assisted trades — free. Likely, this is to stay competitive with new players such as Robinhood that offer free trades.
Firstrade Fees & Features
|Investment Types||Stocks, Penny Stocks, Options, ETFs, Mutual Funds, Bonds|
|Access||Website, iOS App, Android App|
|Broker Assisted Trade|
|No Fee ETFs|
|Customer Service||Phone: M-F 8A-6P ET; Live Chat: M-F 8A-6P ET; Email; Branch Offices|
|Promotions||Get a $200 Transfer Rebate From Firstrade|
- International Accounts — In addition to the accounts you’d expect from a stock broker, Firstrade also offers international accounts. This enables citizens of about 20 foreign countries to invest in U.S. financial markets.
- Clearing Agency — Firstrade uses the Apex Clearing Corporation.
- Account Protection — All accounts are protected by the Securities Investors Protection Corporation (SIPC) for up to $500,000 in cash and/or securities. Firstrade goes a step further and offers its Firstrade Online Protection Guarantee, The company will cover 100% of any losses you experience due to unauthorized activity in your online account.
- Available Investments — You can trade stocks, bonds (including corporate bonds, U.S. Treasuries and agencies, and certificates of deposit), options, exchange-traded funds and more than 11,000 mutual funds.
- Upcoming IPOs — This service provides you with a monthly list of upcoming IPOs. The list includes the company and symbol, the market it trades in and the price, number of shares, offer amount and the expected IPO date.
- Dividend Reinvestment Plans (DRIPs) — Firstrade lets you sign up for the DRIP program. Once you do you are automatically enrolled in the DRIP of any stock that offers the plan. Eligible stocks must be priced at a minimum of $4 per share and include primarily domestic securities. You can sign up for the Firstrade DRIP program at any time. You can also cancel your participation at any time.
- Advanced Screener — This a tool that allows you to narrow your investment choices through the use of predefined screening criteria. You can screen for high-yield stocks, value-priced small-cap stocks and any of dozens of other criteria.
- Educational Resources — Firstrade has instructional videos, instruction through articles, podcasts and even e-books. These can provide ongoing instruction for investors at all levels.
- Commission-Free ETFs (New) — You can now use Firstrade to invest in more than 700 exchange-traded funds commission-free. These include funds in eight classes, three exchanges, 82 categories and 40 fund families.
Firstrade Tax Center — The platform offers a dedicated tax page. It provides important data and dates for investment purposes. The page lets you print tax forms, such as your 1099. And it gives access to common tax forms, such as 1040, 8949 (for investment trades), 8606 (nondeductible IRAs) and related forms. It also provides tax topic discussions, including capital gains, wash sales, short sales and many other related topics.
Firstrade Financial Calculators — The platform has a large number of calculators that will help you in your investing activities. Those calculators can help you to determine:
- Your current net worth
- How much you should be saving for college
- How much you can contribute to an IRA
- How much retirement income an IRA will provide
- Whether you should do a Roth IRA conversion
- What your qualified plans will be worth at retirement
- How much you will need to save for retirement
- Whether or not your current retirement savings are sufficient
- Becoming a millionaire
- How you should allocate your assets
- The return on your real estate investments
- The value of a call or put option
Firstrade Options Wizard
One of the investment areas where Firstrade stands out is options trading. The site offers a number of tools and information resources to help options traders improve their game. One of the primary offerings on the platform is the Options Wizard. This tool gives you instant feedback on both the value and the likelihood of success of any options trades you want to make. It uses sophisticated analytics that transforms market data into actionable information.
The Options Wizard provides professional grade options and analytics. This includes trading strategy checklists, one-month and six-month trend indicators, support and resistance levels, more than 65 technical indicators, technical and fundamental rankings, profit-and-loss simulations and more than 40 complex options strategies.
|Stock Trades||Free||$6.95/trade ($4.95/trade for 30+ trades/quarter)||$6.95/trade|
|Promotions||Get a $200 Transfer Rebate From Firstrade||None||Trade Free for 60 Days + Get Up to $600 Cash|
|Review||—||Read the Review||Read the Review|
Firstrade Premier Services
The Firstrade Gold Account is a service level for accounts with balances of $50,000 or more. Of course, it has all of the features of the basic service. It also offers a dedicated representative, as well as reduced fees for internal asset transfers, account verification letters, copies of personal checks and stop payment orders.
The Platinum Account service level is for account balances of $100,000 or more. It provides a dedicated representative and waives the fees for internal asset transfers, account verification letters, copies of personal checks and stop payment orders.
What these services do not provide is any form of account management, such as a robo advisor or traditional full-service broker.
Pros and Cons
- Free Trades — Unless you want broker assistance, your trades with Firstrade — including options and mutual funds — will be free.
- No Minimum Deposit — This makes Firstrade a new-investor-friendly platform. It has a wealth of educational resources to help new investors learn the ropes and become advanced investors.
- Wide Range of Trading Tools — The combination of educational resources, tools, and other trading resources are equal to the best available in the investment industry. Firstrade is especially strong in the area of options resources. This should make it a natural choice for options traders.
- International Accounts Permitted — Many investment platforms restrict their client base to US-based customers. Firstrade lets investors in 20 countries invest in U.S. financial markets through one of their accounts.
- More than 700 Commission-Free ETFs — Firstrade offers the largest amount of commission-free ETFs of any online broker.
- Clunky Interface — Firstrade's trading platform looks dated compared to the other brokerage firms.
- Customer Support Issues — Customers reporting slow to answer even the basic of questions.
Firstrade stacks up as one of the better discount broker platforms. They offer the full range of investments, a very user-friendly interface, and a complete suite of investor tools and resources. And the fee structure is equal to the lowest available among major discount brokers. They’re also one of the top platforms for mutual fund investments – offering more than 11,000 funds – and for options trading.
Despite the level of sophistication the platform provides, it rates as one of the better platforms for new and small investors.The zero minimum initial deposit requirement and the wide assortment of educational resources are perfect for the new or small investor who wants a comprehensive suite of investment tools and investment selections to grow into but who needs a lot of training along the way. Plus, you just can’t beat free.
Firstrade is also well-suited for international investors. The fact it offers the ability for investors in 20 countries to invest in the U.S. market is a feature most other investment platforms don’t provide.
The one negative with Firstrade is it doesn’t offer a managed portfolio option for investors who prefer professional investment management or a completely hands-off approach. However, it is clear Firstrade is not designed for that type of investor. But for virtually every other investor type, Firstrade should prove to be a winning choice as a platform to invest your money.