In the year 1985, Firstrade Securities was established in the Flushing area of New York City’s Queens borough. It was designed to meet the requirements of the local population, particularly the demands of immigrants of Chinese ethnicity. Firstrade has maintained its position as a leader in terms of low fees while also staying loyal to its beginnings by offering trading tools and support in both traditional and simplified Chinese in addition to English.
Recently, Firstrade decided to offer stock and options trades with zero commissions; however, this decision comes with certain drawbacks, including restricted access to tools, research, and products. Firstrade is an adequate choice for active stock and options traders looking for streamlined order entry, featuring advanced option spread trading, and rock bottom costs; however, unlike many of the other brokers offering $0 commissions, it is important to note that Firstrade is not one of these brokers.
In addition to having minimal fees, one of the things that make Firstrade stand out is its innovative securities lending programme. This programme is designed for investors who are interested in making additional revenue by lending their stocks to other financial institutions. There are no limitations placed on account holders by the securities loan programme; therefore, they are free to sell their stock at any time. Independent investors who have substantial accounts may stand to benefit significantly from this development.
Pros
• Stock and options trades at no cost, as well as several exchange-traded funds and mutual funds that do not charge transaction fees
• A trading experience that is streamlined overall and is consistent across online and mobile platforms
• Assistance for both the traditional and simplified forms of the Chinese language along with the English language accounts
Cons
• Order input and basic graphing are the only functions offered on web and mobile platforms; capability is limited elsewhere.
• No trading in foreign currency, cryptocurrencies, futures, or futures options
• We are unable to provide service for customers around the clock
Exchanging One’s Knowledge
When compared to the platforms offered by other online brokers, those offered by Firstrade can be described as being simplistic but functional. Even for more complicated option spread orders, the order entry process is straightforward and easy to understand. Manual entry of spread legs is required for this process; however, an integrated chain sheet makes it very straightforward. However, streaming quotes are not always available in the order entry form, and margin is computed in real time as trades are being formed. To check the current price, you will need to reload the page. It’s possible that very active traders will find the manual order entry process to be boring and time-consuming.
Opening or closing trades using sophisticated order types like OCO or OCA is not possible on the mobile or web-based platform, but it is possible to use the “Navigator” programme, which is an enhanced version of the platform. Although it is easy to place an order using the majority of the screening tools for stocks, ETFs, or mutual funds, the interface for doing so varies widely depending on the type of product being traded. There is no functionality to trade directly from the charts, nor is there functionality to create staging or basket orders.
Technology Used in Trading
Firstrade has just lately developed its own own all-in-one trading platform for more active traders called Firstrade Navigator. The platform is based on a single-page structure with modules. Nevertheless, desktop users are the only ones who may access Navigator after “applying” for it through their email. The procedure for gaining access to the platform was complicated; however, users of an iPad can gain access to it directly through the App Store, bypassing the prerequisite steps. The web-based Navigator as well as the mobile platforms both make real-time data and streaming quotes available to users. If the primary objective is to maintain commission expenses at the lowest feasible level, then Firstrade is likely to be a smart alternative for traders with lesser trading volumes.
Before deciding to choose Firstrade as their broker, more experienced or larger traders might want to take into consideration a few more aspects. Spray routing is not an option with Firstrade, and the company does not disclose any information regarding pricing improvements for orders. Firstrade is largely responsible for routing orders to the clearing firms of Apex and Credit Suisse, and it receives compensation for the order flow that it facilitates. Although this is a typical practise among brokers that offer minimal or no fee, it is a controversial practise that places the broker in the uncomfortable position of attempting to secure the best price for their customers while also maximising their income from order flow.
Usability
The procedure of creating an account is quite quick and uncomplicated to complete. Despite the fact that a trader is required to read and comprehend each of the account forms, the majority of the form blanks have already been prefilled in advance. The approval process for trading accounts and margin is straightforward and uncomplicated for the typical trader. Account support is offered in both traditional and simplified Chinese for those traders who are located in the United States or other markets that have been approved.
It is quite easy to navigate the web-based trading and account management sections, and orders may be entered from practically anywhere on the website, mobile app, or Navigator platform. No matter where you are in the platform or on the site, the menus are easy to use and always remain the same. The Navigator platform offers a degree of customization, so you can include or exclude modules, as well as relocate them to different places on the screen by dragging and dropping. Since MultiCharts (TradingView) is responsible for the charts displayed in both the Navigator and the mobile platforms, the functionality is excellent. However, there is only a very limited amount of interaction between the charts and the account management and order entry systems.
Mobile Devices and New Technologies
The mobile app for Firstrade is user-friendly and straightforward, much like the web-based platform and the Navigator platform. Order input supports a comprehensive selection of stop, limit, and market orders; however, sophisticated order types such as OCO and OCA are only accessible through the Navigator app, which is optimised for use on the iPad. The mobile app included charts that were generated by MultiCharts (TradingView), which were quick and reliable, but the chart capability did not include the ability to make trades.
The web-based and Navigator platforms are integrated with the watchlist and order entry elements of the mobile application; as a result, the user experience is consistent throughout all three platforms. Within the mobile app, you will not have access to streaming news and analysis from Morningstar, Briefing.com, or Benzinga, and you will not have access to any additional research or screening features.
Variety of Services and Products
Access to trading in stocks, options, funds, and fixed income is provided by Firstrade. This is certainly what the majority of small retail traders are looking for. The range of no-transaction-fee mutual funds and exchange-traded funds (ETFs) is broad enough to encompass the majority of asset classes. In contrast to the majority of low-cost brokers, the web-based platform’s fixed income order pages and screening tools are intuitive and simple to use, and they can be accessible very fast.
Traders with more experience may discover that Firstrade does not provide certain essential products. There is no trading accessible for foreign exchange (Forex) or cryptocurrencies, and neither futures nor futures options are provided as investment choices. At this time, Firstrade does not provide its customers with a robo-advisory service. Spread order entry is straightforward for advanced and active options traders, and it supports up to four legs per spread. Traders can also enter multiple spreads at once.
Research and Current Events
The screening and research capabilities that are offered by Firstrade are dispersed over its several trading platforms in a surprising amount. The stock and fund screener is simple to use, but its usefulness is extremely limited, and it is not particularly easy to understand. However, assuming that a trader does not have particularly complicated screening criteria, entering transactions from the screeners is a simple and rapid process. Both Morningstar and Briefing.com, which are regarded as valuable sources, make their news and analytical content available to traders. Additionally, streaming news of a lower quality was accessible through the website Benzinga.com.
Traders are able to develop ideas and conduct real-time analysis of option trades and spreads by using the tool known as OptionPlay. This function, despite its utility, is difficult to find and can only be accessible through the options chain sheets. The Firstrade charts can be of varying quality depending on the platform that you use. The web-based platform had basic graphing that was difficult to use and could not be personalised in any way. The Navigator and mobile trading platforms make use of charts that are provided by MultiCharts (TradingView), and these charts are of a very high quality.
Evaluation of the Portfolio and Reports
The vast majority of functions relating to portfolio analysis and accounting are not available on Firstrade’s platforms. However, investors are able to view margin requirements on a per-trade basis and can keep an eye on open positions or watchlists in real time. Real-time access may also be gained to account balances and account histories, and downloading transactions for use in conjunction with third-party applications is made exceptionally simple.
In spite of the fact that transferring account activity data into third-party applications such as Quicken, Microsoft Money, or Excel is a simple operation, the Firstrade platforms offer almost no capability for tax planning or account management. There are several straightforward calculators available for asset allocation, option pricing, and contributions to IRAs; but, their utility is limited and they are not integrated with your account so they cannot give you with suggestions or analysis.
Assistance and Attendance to Customers
Even though Firstrade does not provide live support around the clock, there are two aspects of their service that distinguish them from the majority of brokers in their category. To begin, they provide complete support in both simplified and traditional forms of the Chinese language. Second, Firstrade’s customer service representatives are available, competent, and responsive to phone calls during market hours. Accounts are able to request a call back, which in our tests was completed in a fairly timely manner, even during periods of high call volume. The responses provided through chat were less than excellent, with many of the responses being automatically generated and included links to frequently asked questions (FAQs) that frequently did not relate to the subject that was being asked.
A stock loan programme is one of the ways that Firstrade helps account members create revenue from their stock holdings. These account customers already benefit from Firstrade’s cheap fees and excellent telephone service. Traders can generate daily money from their shares by lending them out to other institutional investors through Firstrade. Shares that have been borrowed remain unconstrained, meaning that investors can continue to purchase and sell them as they normally would even if they do not take part in the stock loan programme.
Education
There is a wide variety of markets and trading tactics covered in the articles and videos that can be found on Firstrade’s website. The information will serve as an introduction to most themes for new investors, but it won’t go into much more depth than that. As a result of the fact that many of the articles and videos were generated by companies or organisations from the outside, such as the Options Industry Council, they do not contain any education that is particularly timely or that is related to Firstrade’s platforms and capabilities.
During the course of our review, we discovered that a significant portion of the instructional information was out of date and contained a number of broken links. Although introductory education can be beneficial for new investors, it does not relate particularly well to the present state of the market or to recent developments in trading innovation. Unfortunately, there are no live webinars or live events available, both of which could have helped fill in a significant number of the holes in the education category. Despite the fact that podcasts are available, the vast majority of them come from the same external providers and are not pertinent to the real market situation.
Costs
According to our point of view, investors who are investigating Firstrade are presumably interested in locating the broker offering the fewest trading features at the lowest possible cost. Trading stocks, options, and funds may typically be done with no commissions required. Account holders are compensated for lending their shares for daily revenue as part of the security lending programme, which means that the initiative has the potential to significantly reduce the costs associated with trading.
The majority of low-cost brokers, in addition to providing fewer features and services, will charge greater prices in other areas in order to compensate for the absence of commissions. Investors who have a margin account with Firstrade are subject to margin rates that are higher than the industry standard.1 Fees for some account transactions, such as wire transfers and ACAT transfers out, are likewise higher than the industry standard but are not exceptional.
What You Absolutely Must Be Aware Of
If an investor is intent on finding the most cost-effective opportunities to trade, we believe there is a case to be made for using Firstrade as their brokerage of choice. Investors who are looking for stocks, options, funds, and ETFs shouldn’t be disappointed, despite the fact that trading in forex, futures, and cryptocurrencies is not possible. Firstrade differentiates out from many other brokers in the category of little to no commission because its trading interfaces are superior to average, it provides streaming quotations, and it has extensive options trading features.
The service is satisfactory, but it is only available during market hours. This might be problematic for traders who are located outside the United States or for novice investors who are unable to get in touch with their broker during work hours. There is a great deal of introductory content that has been compiled from internal and other sources, but there is very little advanced education or guidance that is tied to the present state of the market. New investors who are looking for education will discover this.
