Firstrade has its origins in Queens, New York and was originally set up back in 1985. At the time, it was mainly helping locals in the community with their finances, particularly immigrants from China. At its core, it was a low-cost offering and it has tried to stay true to its foundations in its current offering. You will clearly see on the Firstrade platform that it still has a Chinese language version of its website, as well as the low-cost structure it is known for.
This broker is under the regulation of both the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Firstrade has an offering that charges $0 commission for options and stock trades, which is attractive for many investors and traders. It also has a decent selection of different research and trading tools that help traders to make informed decisions. The platform, in particular, has been popular with active traders.
There is also an interesting securities lending aspect to the platform. This allows investors on the Firstrade platform being about to lend their stock positions to financial institutions in return for a side income.
This Firstrade broker review looks at all of the various aspects that make up this offering in its current form.
As a low-cost broker, naturally the Firstrade fees are going to be competitive. There is no commission charged on most of the popular types of trading products and the account fees are effectively not existent.
Firstrade is under the oversight of the SEC and FINRA, two of the most trusted bodies in the United States. Investors are also protected through the SIPC scheme, which gives assurance of up to $500,000 on user funds in the case of Firstrade going out of business.
Straightforward trading setup
The trading platforms on offer at Firstrade are simply designed, but they fulfill the role that is needed. A variety of different order types can be quickly deployed with minimal effort. You can set up alerts and use a variety of research and analysis tools that are part of the proprietary trading platforms at Firstrade.
Customer support is a bit lacking
There is no 24/7 customer support coverage at Firstrade, with not even 24/5 support that is common with a lot of competitors. There is also no live chat feature and the email response times are a bit slow.
Not much specialized trading functionality
The trading platforms on Firstrade, for the most part, are more basic than what may be preferred by more experienced traders. There is not quite the array of functions and customization options that would be desired by frequent or high spending traders.
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Commissions & Fees
For those trading ETFs, options, mutual funds and stocks on Firstrade, there is no commission charged. This is in line with a number of other leading discount brokers in the space today. For those looking to trade on margin or to short positions, the financing rate at Firstrade is 9.4%, which is lower than most of its competitors.
The fees for trading bonds are a bit high, with the commission on a $10,000 government bond being set at $40. A lot of competitors do not charge any commission on these types of bonds.
Aside from trading fees, there is no inactivity fee and no account fees for retail traders. There are account opening and annual account fees for legal entities using Firstrade. There are also no withdrawal fees charged by Firstrade. Overall, the Firstrade fee structure is decent across the board for the most part as a low-cost broker.
Platform & Tools
There is a proprietary trading platform in place is called Firstrade Navigator. This is aimed at more active traders and it is only available for those using a desktop computer. You need to apply via email in order to gain access to this platform.
For more basic Firstrade trading platform, it is available on both desktop and mobile devices. It is extremely easy to use and it has little frills or graces. The design is very basic and there are not many options to customize the offering. All of the basic tools for placing orders are on offer, as well as a variation of different order time limits.
For options traders, you can use the Options Wizard trading platform. This has been built specifically for options trading and has more than 65 technical indicators and a variety of other exciting features. There is the ability to enact alerts, varying depending on your preferred criteria. You can find other sorts of tools on the Firstrade website, such as a real-time streaming watch list.
The mobile app is available for the base Firstrade offering. This is similar to the desktop versions of the trading platform as it is very clear and concise, while being a little outdated. You can quickly navigate around the app with limited issues. You will only have access to the more basic types of analysis and charting through the mobile app and you won’t really have any customization options.
Most of the basic order tools are supported through the mobile app, allowing you to make your trades quickly on the go. You will have access to streaming real-time data and quotes from the likes of Morningstar through the mobile platform. Overall, this is a mobile app that gets the job done without too much fuss.
The main focus of the Firstrade platform is US users, but it also accepts international clients from selected non-US nations. For new accounts, there is a $0 minimum required deposits for the brokerage account option. If you open a margin account, then this will have a $2,000 minimum deposit. Finally, for a day trading account, you will need to deposit at least $25,000 starting off.
The different types of accounts on offer at Firstrade are tailored to specific types of clients. They are all pretty self-explanatory. You can choose from an individual account, joint account, a selection of retirement accounts, business accounts, education savings account or a custodial account.
Each of these options will have its own specific pros and cons that you will need to consider before opening up an account on Firstrade. It will take up to three business days before your new account is verified.
Deposits & Withdrawals
The options that are open to you to add funds and to withdraw funds from your Firstrade account are very limited. There are no deposit or withdrawal fees charged directly by Firstrade, but the third-party payment processors likely will have their own fees for conducting these transactions, so you need to be aware of this.
There is no support for conducting transactions using credit cards, debit cards or e-wallets at Firstrade. Instead, you will have to rely on wire transfers, ACH transfers or a physical check when adding and removing funds from your Firstrade account.
The quickest option will be the ACH transfer, taking a couple of working days for your funds to process both when depositing and making a withdrawal. Generally, a domestic wire transfer in the US will cost you $30 while the withdrawal cost for international clients will be around the $50 mark.
Naturally, this process of depositing and withdrawing at Firstrade is less than ideal for a lot of transfers who are used to instantly depositing funds using the likes of debit cards or e-wallets. However, the options on offer are safe and secure, with the transaction times being pretty good all things considered for these types of payment methods.
At Firstrade, there are a few different ways in which you can contact the customer support team. You can do so by sending the team an email, by giving the team a call over the phone or by asking questions to the chatbot which is effectively an intelligent and interactive FAQ database.
There is currently no live chat function and customer support is not monitored on a 24/7 basis. Currently, the hours on which you can get in touch with the support team is between 8:30 AM and 5:30 PM EST during the week, with no contact options being open at the weekend. The best option is usually ringing the team by phone. The chatbot is only suitable for the most basic questions and the email response time can be slow.
Security & Fairness
Firstrade is regulated by two of the most trusted regulatory authorities in the United States. This is the SEC and FINRA which will give Firstrade users a peace of mind that they are using a reputable platform.
All of the customers on Firstrade have coverage through the SIPC scheme. This means that accounts are protected in the case of securities or cash being lost through the broker being made insolvent or bankrupt. There is a max limit of this protection of $500,000, with a cash limit in place of $250,000 for cash.
This is one of the strong protection schemes that you will find across the globe. Firstrade also has an additional insurance policy protection that adds to the SIPC protection. Naturally, these types of protection do not protect users from loss of market value for investments.
However, not every single type of investment product will be under SIPC coverage. Some of the investment products that it will not cover include investment contracts that are not registered, fixed annuity contracts, precious metals, currency or other types of commodity options or futures and unregistered limited partnerships.
Find out how Firstrade stacks up against other brokers