Firstrade Review : Stands Out With a Unique Securities Lending Program

Firstrade, one of the first online brokerages, offers a competent, easy-to-use trading interface with low fees, especially for options. The platform lacks some of the top online brokerages’ features, but it’s still a good alternative for options traders and moderately skilled investors interested in trading equities and bonds.

Firstrade is a good broker for new and expert investors. Broker leads the industry in low commissions by eliminating trading costs for stocks, ETFs, mutual funds, and options. Morningstar’s independent research reports and other research tools can be accessed via a sleek mobile app. The broker’s educational materials can help new investors, and you can open almost any form of account.

Firstrade Broker : Website

Country of regulation: USA

Trading fees class: Low

Inactivity fee charged: No

Withdrawal fee amount: $0

Minimum deposit: $0

Time to open an account: 1-3 days

Demo account provided: No

Products offered: Stock, ETF, Fund, Bond, Options

Firstrade Securities was founded in 1985 in the Queens area of Flushing. It catered to the requirements of the local people, particularly Chinese immigrants. Firstrade, a low-cost leader, has stayed loyal to its beginnings by offering trading tools and support in traditional and simplified Chinese in addition to English.

Firstrade has recently eliminated commissions on stock and options trading, however, this comes at the expense of restricted tools, research, and product offerings. However, unlike many other $0 commission brokers, Firstrade is a suitable option for active stock and options traders seeking fast order entry, advanced option spread trading, and rock-bottom prices.

Firstrade stands out for its low costs and a program that enables investors to make extra money by lending their assets to other financial institutions. The securities loan scheme imposes no limits on account holders, who are free to sell their shares at any time. This might be a substantial gain for independent investors with substantial accounts.

Customer Service

Firstrade differs from the majority of brokers in their category in two ways, even though they do not provide 24/7 live help. First, they provide comprehensive assistance in both traditional and simplified Chinese. Second, Firstrade’s customer service is helpful and prompt over the phone during market hours. Accounts have the option to request a callback during peak call periods, which in our tests, was handled quickly. The chat responses fell short since many of them were generated automatically and included links to frequently asked questions that frequently had nothing to do with the question being asked.

In addition to offering affordable prices and excellent phone support, Firstrade offers a stock lending program that enables account customers to make money from their stock holdings. Through Firstrade, traders can lend their shares to other institutional investors for daily income. Shares that have been lent remain unrestricted, allowing investors to purchase or sell them without participating in the stock loan scheme.

Products

The majority of small retail traders probably require trading access to stocks, options, funds, and fixed income, which is what Firstrade offers. The variety of mutual funds and ETFs that are accessible with no transaction fees span the majority of asset classes. In contrast to most low-cost brokers, the fixed-income order pages and screening tools are easy to use and accessible quickly via the web-based platform.

Some essential Firstrade offerings may not be available to more experienced traders. Trading in cryptocurrency or foreign exchange is not offered. Currently, Firstrade does not provide a robo-advisory service. Spread order entry is simple to use and supports up to four legs per spread for experienced and active options traders.

Pricing

In our opinion, traders researching Firstrade are likely searching for the least expensive broker with the bare minimum of trading features. The vast majority of stock, option, and fund transactions incur no commissions. Even more, the security lending program can lower trading costs by giving account holders daily income for lending out their shares.

Most low-cost brokers will charge greater fees in areas other than functionality and services to compensate for the lack of commissions. Firstrade charges investors with margin account margin rates that are above average. Some account transactions, like wire transfers and ACAT transfers out, have higher fees than usual, but this is not an unusual situation. 

Usability

The account-creation procedure is incredibly simple and convenient. Although all account forms must be read and comprehended by a trader, the majority of form fields have been prefilled. Account and margin approval is quick and convenient for the common trader. Account support is accessible in traditional and simplified Chinese for traders in the U.S. and recognized overseas markets.

The web-based trading and account management pages are relatively easy to navigate, and orders may be placed from nearly anywhere on the website, mobile app, or Navigator platform. The menus are consistent and intuitive, no matter where you are on the platform or website. The Navigator platform is rather customizable, allowing you to add or delete modules and reposition them on display. The Navigator and mobile platforms use MultiCharts (TradingView) charts, so the functionality is excellent. However, the interaction between the charts, order entry and account administration is limited.

Trade Experience

Firstrade’s platforms are simple but functional compared to those of other online brokers. Even for sophisticated option spread orders, order entry is familiar and intuitive. Spread legs are manually inserted, and the procedure is facilitated by an integrated chain sheet. The margin is computed as trades are built. However, streaming quotes are not always accessible through the order entry form. This requires a refresh in order to verify the price. The manual order entry method may be onerous and repetitious for really busy traders.

Complex order types, such as OCO and OCA, cannot be used to open or close trades on mobile and web-based platforms but are supported by the specialized “Navigator” program. The majority of screening tools for stocks, ETFs, and mutual funds make it straightforward to place an order; nevertheless, the order entry interface varies by product type. It is not possible to trade from the charts or to make baskets and staging

Trading Technology

Firstrade developed its own all-in-one trading platform, Firstrade Navigator, for more active traders, based on a module-based single-page interface. However, desktop users may only obtain Navigator by “applying” for it via email. Accessing the platform was complicated, but iPad users can bypass the application process by downloading it from the App Store. On the web-based Navigator and mobile platforms, streaming quotes and real-time data are accessible. Small investors may want to use Firstrade if they want to keep their commission fees as low as possible.

Before selecting Firstrade as a broker, more experienced or larger traders may wish to consider a few extra aspects. Firstrade does not offer spray routing and offers no information on order price increases. Firstrade routes order largely to Apex and Credit Suisse and receive payment for this order flow. Although this is a typical practice among low or no-commission brokers, it is a controversial practice that places the broker in the awkward position of trying to obtain the greatest price for the client while simultaneously optimizing income for order flow.

Education

Finxpd has found that IG’s teaching resources are superior to those of any other online broker it has investigated. A vast trader’s library, spearheaded by the remarkable “IG Academy,” will swiftly bring beginners up to speed, while advanced trading strategy articles will be of great assistance to seasoned practitioners. A robust roster of online seminars addresses “issues ranging from platform walkthroughs to impending business possibilities.”

The IG Academy course is designed to cover material for individuals at various phases of the trading spectrum, and it achieves this point. Additionally, clients can access courses and articles via the IG Academy mobile app. It is odd that DailyFX.com, which IG acquired in 2016, is poorly linked with the broker’s website, with the exception of the live seminar part. Prospective clients may not be aware of this fantastic resource. The instructional portfolio that IG offers its clients is increased with a powerful search engine and a thorough lexicon.

News

Firstrade’s trading platforms have a remarkable number of screening and research instruments. Although the stock and mutual fund screener is simple to use, its functionality is extremely limited and not particularly intuitive. Assuming a trader’s screening criteria are not particularly complex, however, entering transactions via the screeners is simple and rapid. Traders get access to Morningstar and Briefing.com, both of which are high-quality news and analysis sources. Additionally, Benzinga.com offered streaming news of inferior quality.

OptionPlay allows traders to develop trading ideas and analyze option transactions and spreads in real time. This function is difficult to locate and is accessible through the options chain sheets. Firstrade’s charts vary in the quality of the program. The web-based application provided crude, uncustomizable graphing that was difficult to use. The Navigator and mobile trading interfaces use MultiCharts (TradingView) charts, which are excellent.

Pros and Cons

Is Firstrade A Worth Broker to Get?

If an investor is looking for the lowest trading expenses possible, there is an argument to be made in favor of Firstrade. Despite the absence of Forex, futures, and crypto trading, investors seeking stocks, options, funds, and ETFs will not be disappointed. Firstrade distinguishes itself from many other brokers in the low-to-no commission category by offering superior platforms, live quotations, and comprehensive options trading capabilities.

This broker is well-suited for traders interested in conventional assets such as equities, exchange-traded funds (ETFs), and bonds. Firstrade is one of the few brokers that does not impose a per-contract cost for options trading, making it an attractive platform for option traders. Even if they do not charge commissions, the majority of brokers levy a fee for each option deal.

Advanced traders who require a complex trading program with numerous features and alternative asset classes may wish to look elsewhere. However, beginners may like Firstrade’s user-friendly platform.

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Source: Investopedia