The world of online trading is filled with plenty of choices for the enterprising trader. Not all are good for you, though; finding the right platform means knowing what you want out of a platform and then finding the brokerage that matches up best.
To help sort through the myriad of options out there, we’ll take a look at one choice – Firstrade – and examine how this brokerage’s offerings match up with the competition. Firstrade was created in 1985, so it has been around for a while through the initial rush of trading (in the 1990’s) and through the Internet revolution to today’s digital age. It markets itself as a low-cost, high-value discount brokerage with a simple fee structure and straightforward trading method. In 2005, Smart Money magazine named Firstrade as the “Best Deal” in the online discount brokerage category; in 2006, Kiplinger’s named the platform the “Top Clean-Hands Firm”.
Pricing: Examining Costs and Fees
Stocks: For market and limit orders, Firstrade charges a $6.95 fee. This is not the cheapest, but it is cheaper than several big-name brands out there. Broker-assisted stock trades are a bit pricey, at $26.95, but most traders don’t use broker-assisted trading so for these traders, this won’t be a big factor.
Options: Options cost $6.95 per trade plus $0.75 per contract. This per-contract rate is pretty standard; there are cheaper options, but there are probably more prices that are more expensive.
Mutual Funds: Firstrade charges $9.95 for no-load funds; load funds and no transaction fee funds are free.
ETFS: ETFs cost the same as mutual funds, but they offer 10 free ETFs with expense ratios ranging from 0.09% to 0.80%.
A great thing about Firstrade is that there is no minimum account balance required for equities. For options, there are minimum amounts. For buying puts and calls, a $2,000 balance is required; for spreads and straddles, the amount is $10,000; for naked puts, the amount is $25,000.
Asset Classes for Trading
Firstrade offers your standard mix of asset classes and assets for trading. In addition to trading assets, you can also use Firstrade to open IRAs and education savings accounts (ESAs). The assets you can trade on Firstrade include stocks, options, ETFs, bonds, CDs, and mutual funds.
Firstrade allows trading on margin, but doesn’t have foreign currencies (forex) or commodities. Most brokerages don’t feature commodity trading, but most do offer forex. You also cannot trade futures with Firstrade.
Trader Education and Service
Those seeking good customer service will find a good home at Firstrade. Customer service reps there are accommodating and knowledgeable, and issues are usually resolved promptly. That’s the best you can ask for, really, and Firstrade does a great job.
When it comes to education and research, though, Firstrade falls a bit flat. Its research tools are average, and you won’t have access to anything you couldn’t find elsewhere. The education material they have on their website is a bit better than average, though, and any new investor will have a chance to get off to a good start.
Reviewing the Interface
The account interface for Firstrade is your typical interface that shows you your account information at a glance and has a convenient place for all the actions you want to take. The trading platform is more of the same. While Firstrade isn’t the worst platform out there, it isn’t going to win any awards for features, capabilities, or advanced trading tools. Traders looking for the best system, with all the bells and whistles, can look elsewhere.
With that being said, Firstrade’s platform is more than adequate for trading, and it has the features virtually every other platform out there has.
One shining point about Firstrade is how much it’ll cost you to trade there. The broker doesn’t have the greatest rates, but they are average at worst, and better than some big-name brands out there. Plus, the interface and website are both clean and simple to use, so traders who are looking for longer investments and a no-frills approach to trading will find Firstrade up to the challenge.
In short, investors who want simplicity and affordable trading – especially for long-term portfolios – and can do without high-tech, advanced tools and other asset categories like forex can find a serviceable option in Firstrade. Traders who want to actively trade on a regular basis need a provider who offers lower-cost trades and has a trading platform designed for high-frequency trading, complete with real-time data from a variety of sources.
For others, Firstrade is a solid possibility.