Firstrade Review (2024)

Firstrade Securities is considered a low-cost leader when it comes to stock brokers. Recently, the company has switched to $0 commissions for stock and options trades, but that comes with some sacrifices in limited tools, research, and product scope. However, unlike many of the other $0 commission brokers, our Firstrade review found that it is still an adequate choice for active stock and options traders looking for streamlined order entry, featuring advanced option spread trading and rock bottom costs.

Besides low costs, Firstrade also stands out with a unique securities lending program for investors interested in earning extra income by lending their stocks to other financial institutions. The securities lending program places no restrictions on the account holder who can sell their stock at any point. This could be a significant benefit for independent investors with large accounts.

Company Overview

Firstrade Securities was founded in 1985 as First Flushing Securities in the Flushing neighborhood of Queens, New York. It served the needs of the local community, especially ethnic Chinese immigrants. Over the years, Firstrade has remained true to its roots, providing trading tools and support in traditional and simplified Chinese as well as in English.

Pros & Cons

Trading Experience

When compared to other online brokers, Firstrade's platforms are basic but functional. Order entry is intuitive and familiar, even for complex option spread orders. Spread legs are manually entered, and an integrated chain sheet makes the process easy. Margin is calculated as trades are constructed. There is also streaming charts and data. Very active traders may find the manual order entry process tedious and repetitive.

The "Navigator" application allows you to view all orders and positions together, create technical charts, and created customized widgets. It also features real-time data. It is simple to create an order from most of the screening tools for stocks, ETFs, or mutual funds, however, the order entry interface is inconsistent from one product type to the next. There is no functionality to trade from the charts or create basket and staging orders.

Trading Technology

Firstrade recently built its own all-in-one trading platform, Firstrade Navigator, for more active traders based on a single-page layout with modules. There are both desktop and tablet apps of Navigator. Streaming quotes and real-time data are available in the web-based Navigator and mobile platforms. For smaller traders, Firstrade is likely to be a good choice if the primary concern is to keep commission costs as low as possible.

More advanced or larger traders may want to consider a few additional factors before choosing Firstrade as a broker. Firstrade does not offer spray-routing and provides no data on price improvement for orders. Firstrade routes orders primarily through Apex Clearing Corporation, and accepts payments for order flow. While this is a common practice among low/no commission brokers, it is a controversial practice that puts the broker in the awkward position of trying to get the best price for their clients while also optimizing income for order flow.

Usability

The account setup process is extremely easy and convenient. Although all the account forms should be read and understood by a trader, most of the form blanks were prefilled in advance. For the average trader, account and margin approval is quick and convenient. For traders in the U.S. or approved foreign markets, account support is available in traditional or simplified Chinese.

Navigating the web-based trading and account management pages is very simple and orders can be entered from virtually any location on the site, mobile app, or Navigator platform. Menus are intuitive and persistent regardless of where you are on the platform or site. The Navigator platform allows for some customizability, allowing you to add or remove modules or drag them to other locations on the screen. The charts in the Navigator and mobile platforms are from MultiCharts (TradingView) so the functionality is very good. However, there is very little integration in the charts with order entry and account management.

Mobile and Emerging Tech

Like the web-based and Navigator platforms, Firstrade's mobile app is intuitive and easy to use. Order entry includes a full range of stop, limit, and market orders. The mobile app includes charts from MultiCharts (TradingView) which were fast and robust but did not include trades from the chart functionality.

The mobile application's watchlist and order entry features are integrated with the web-based and Navigator platform; this creates a seamless experience. Streaming news and analysis from Morningstar, Briefing.com, OptionsPlay, and more are only available on the web version, and not available within the mobile app and there are no other research or screening tools.

Range of Offerings

Firstrade offers trading access to stocks, options, funds, and fixed income which is likely what most small retail traders need. Stocks, ETFs, and options are all commission-free. The spectrum of no-transaction-fee mutual funds is wide enough to cover most asset classes. Unlike most low-cost brokers, the fixed income order pages and screening tools are easy to use and could be accessed quickly through the web-based platform.

More advanced traders may find some key offerings unavailable at Firstrade. Forex, futures, and futures options are not offered. Firstrade does not currently offer a robo-advisory service. Spread order entry for advanced and active options traders is easy to use and allows for multiple legs per spread.

News and Research

Firstrade has a surprising number of screening and research tools scattered throughout its trading platforms. While the stock and fund screener is easy to use, its functionality is very limited and not very intuitive. However, assuming a trader's screening requirements aren't very advanced, entering trades from the screeners is quick and easy. Traders can access news and analysis from Morningstar, Zacks, and Briefing.com, which are high-value sources.

Traders can use the OptionPlay tool to generate ideas and analyze option trades and spreads in real-time. The quality of Firstrade's charts varies depending on the platform. The web-based platform included rudimentary charting that is difficult to use and can not be customized. The Navigator and mobile trading platforms use charts provided by MultiCharts (TradingView) and are very good.

Portfolio Analysis and Reports

Most portfolio analysis and accounting functions are unavailable on Firstrade's platforms. However, investors can see margin requirements on a per-trade basis and monitor open positions or watchlists in real-time. Account balances and account history are also available in real-time and transactions can be easily downloaded for analysis with external tools.

Although the process for downloading account activity data into external programs like Quicken, Microsoft Money, or Excel is easy, there is virtually no functionality for tax planning or account management within the Firstrade platforms. However, there is a resource center of tax tools, educational documents, and more. There are some simple calculators for asset allocation, option pricing, and IRA contributions, but they have limited usefulness and aren't integrated with your account to provide guidance and analysis.

Customer Service and Help

Although Firstrade does not offer 24/7 live support, there are two qualities that set them apart from most brokers in their category. First, they offer full support in simplified and traditional Chinese. Second, during market hours, Firstrade's customer service is responsive and knowledgeable on the phone. During heavy call times, accounts can request a call back which was very quick in our tests. The chat responses were less satisfactory, with many responses generated automatically with links to FAQs that often didn't relate to the question being asked.

Besides low costs and good telephone service, Firstrade can also help account holders to generate income from their stock holdings through a stock loan program. Firstrade users can loan their shares through Firstrade to other traders and investors for daily income. Shares that have been loaned are still unrestricted, and you can sell them at anytime.

Education

Articles and videos covering a broad spectrum of markets and trading strategies are available at Firstrade. For new investors, the material will provide an introduction to most topics but not much more. Many of the articles and videos were produced by outside firms or organizations like the Options Industry Council so they do not include education that is very timely or related to Firstrade's platforms and tools.

Although the introductory education can be helpful for new investors, it does not relate well to current market conditions and new trading innovations. There are a limited amount of live webinars that must be relied on for that type of information.

Costs

In our view, traders evaluating Firstrade are probably focused on finding the lowest-cost broker with a minimal level of trading functionality. Most stock, option, and fund trading can be done for $0 commissions. The security lending program even has the ability to lower the cost of trading further by compensating account holders for lending their shares for daily income.

Besides payment for order flow, most low-cost brokers will earn money through margin interest and fees for some services. Firstrade charges typical margin rates for the industry. Fees for some account transactions, such as wire transfers and ACAT transfers are typical as well.

Final Verdict

In our opinion, there is a case to be made in favor of Firstrade if an investor is focused on the lowest trading costs available. Although forex and futures are unavailable, investors looking for stocks, options, mutual funds, crypto, and ETFs shouldn't be disappointed. Unlike many other brokers in the low-to-no-commission category, Firstrade stands out with above-average trading platforms, streaming quotes, and advanced options trading functionality.

Service is good but limited to market hours, which may be challenging for traders outside the U.S. or new investors who cannot contact their broker during work hours. New investors looking for education will find a lot of introductory material aggregated from internal and external sources but limited advanced education or guidance connected to the current market environment.