My Firstrade Online Stock Brokerage Investing Account Review
Firstrade is an online brokerage that offers flat fee commissions for both stocks and options. Investors and traders can trade stocks and options for only $6.95 per trade with unlimited shares, though there is an exception cases. It also has a wide selection of mutual funds for investment. For retirement account, Firstrade offer a no fee IRAs and there are no hidden fees. For dividend investor, Firstrade also offer a free DRIP (Dividend Reinvestment Plan) service. Firstrade also offers a mobile app for trading using blackberry, iphone and other smartphones.
History & SIPC Protection
Firstrade was founded in 1985. The current headquarter is located at Flushing, NY. Firstrade is a leading online investment firm providing a full line of investment tools and products designed to help investors and traders take control of their financial investment. Firstrade has been committed in providing high value and quality services to its customers for the past 25 years of service. Firstrade is part of FINRA and SIPC.
Firstrade currently uses Penson Financial Services Inc as its clearing firm to hold the client asset. For protection, Penson Financial Services Inc is also a member of SIPC & FINRA.SIPC protects against the insolvency of a brokerage firm, but does not protect against any market loss. SIPC provides up to $500,000 of coverage, with a limit of $100,000 for cash balances. Additional supplemental coverage is provided by Penson Financial Services insurance using London Underwriter up to $150 million ($2 million for cash balances) per Firstrade account.
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Products & Fees
The commission fee structure of Firstrade Brokerage is as follow:
- Products: Stocks, options, mutual funds, bonds, CDs, ETFs
- Market Orders: $6.95 / trade
- Limit Orders: $6.95 / trade
- ETF: $6.95 / trade
- Broker Assisted: $26.95 / trade
- Mutual Funds: $9.95 for no-load funds. Free for NTF funds & Load funds
- Options: $6.95/trade+$0.75/contract
- Treasury Bills, Notes & Bonds: Net Yield Basis
- Muni Bonds: Net Yield Basis
- Primary Market CDs: $30 / trade
- Minimum to Open: $0; $2,000 for Margin
- Inactivity Fee: $0.00
- E-statement: Free
- Mailed Statements: $2 / statement
- Dividend Reinvestment Plan (DRIP): Free
- Some Other Fees: Tender Fee: $25.00. DTC Out: $10.00/security. ACAT Out: $50.00.
- Maximum Margin Rate: Based on proprietary base rate
Account ImagesClick thumbnail to view full-size
Opening account is straight forward and quick; customer just can apply either by mailing the application from or fill the online application through Firstrade website. You can open individual, joint, corporate, custodial, and Individual Retirement accounts (IRA). If needed, they may require you to submit some identification such as Driver license.
You can open the following account:
A. Firstrade Smart Accounts
- Joint (WROS & Tenants in Common)
- Custodian - for a Minor
- Education Savings (Coverdell ESA)
- Investment Club
- Corporate & LLC
- Partnership & LLP
- Sole Proprietorship
- Trust, Estate, Conservatorship
B. Retirement account
- IRA (Traditional & Roth)
- Rollover IRA
- SEP IRA
- SIMPLE IRA
- Profit Sharing Plan
- Money Purchase Plan
The application only takes about less than 15 minute. Once you are done, you’ll need to wait for their approval. If you apply through mail or fax, you will need to wait for Firstrade customer service confirmation. Then, you can setup how you want to fund your account. You will need to fund your account with $2,500 for initial funding. To maintain a margin account, you will need $2,000 account balance at any time.
There are 4 different ways to fund your IB account:
- Wire Transfer – usually can be done same business day
- Transfer an account from other brokers .This will take more than 10 business days
- Mailing a check will take up to 5 business days
- Electronic Transfer (ACH transfer) will take up to 2-3 business days.
For International or Foreign investor or non US resident, you can apply Firstrade account by printing the new application form. Typically, you will need to submit your account by mail or fax, please check with customer service. You will need to submit W-8Ben and copied ID or Passport along with your application. The minimum balance to open an account is $0 for cash account and $2,000 for margin account. Firstrade also offers Chinese language website for Hong Kong, China, and Taiwan citizen.
Firstrade doesn’t accept the application from Balkans, Burma, Canada, Cuba, Iran, Iraq, Liberia, Libya, Nigeria, North Korea, Sierra Leone, Sudan, Syria and Zimbabwe.
International investors need to prepare the following:
- Official name
- Date of Birth
- Permanent address of residence
- Employer's name and address (if applicable)
- Valid passport or government-issued photo identification
Other services such as checking writing, option agreement and ACH transfer features can be applied by submitting corresponding forms from Firstrade Website.
Cash Management & Checking
Firstrade also offers cash management services known as Firstrade Smart Account. Firstrade Smart Account offers A Visa Debit Card, check-writing privileges, and a competitive yield money market fund. These privileges are offered at a reasonable annual fee of $75.00.
Commission & Trading Fees
is an online discount brokerage with a very straightforward flat rate
commission fee schedule. The details are as follow.
For stock trades, All stock trades are a flat $6.95 per trade. If you need broker assistance, you will be charge $26.95 per trade. There is no limit of order type and size. For stocks under $1.00 and trades over 5,000 shares, the broker charges an extra $0.005 per share
For instance, if you buy 100 shares of $5.00 stock, it will cost you $6.95 commission ($506.95 total trade cost) and if you buy 100 shares of $0.95 stock, it will cost you $7.45 commission ($102.45 total trade cost)
For active traders, the broker also offers Nasdaq Level II streaming quotes and charts for $19.95 per month.
Investors can place the following order types:
- Stop Loss
- Stop Limit
Firstrade also offers several kinds of Standard and Poor's research.
For Options Trades, Options trades are $6.95 per trade + $0.75 per contract. For example, 1 contract option will cost $7.70 commission and 10 contracts will cost $14.45 commission.Option assignment and exercise fee is $16.95. Two-legged complex option orders are charged a single commission but contract fees are charged on each leg.
For Mutual Funds trades, Mutual funds cost $9.95 for no load funds. Load Mutual Funds cost $0 per trade. Note: There are other charges apply for loaded funds charged by the mutual fund itself.
For Future Trades, There is no support currently.
For Forex Tradings, there is no support currently.
Pros & Cons of Firstrade
Advantages of Firstrade
- New website and platform were updated in 2010
- Website and client side navigation are very straightforward.
- Over 11,000 mutual funds to choose from.
- Fund your new account with $2,000 or more and trade free for 30 days or up to 100 trades
- Offer Dividend Reinvestment Plan (DRIP) for free
- Website also provides Chinese Language support
- Provide various free research news such as Standard & Poor’s, Comtex News, MidnightTrader and FinancialWire
- Also offer $50 bonus for friend referral
Disadvantages of Firstrade
- X-Stream real-time watchlist software only allows 20 stocks max;
- platform lacks quality research tools;
- extra fees for penny stocks and positions over 5,000 shares.
- No Future & Forex Trading
- Excessive fees of option trading & option exercise fee
Customer’s complaints from research:
- There is some delay and issue with new international applicant application process.
- Lack of communication issue with some option of swapping preferred shares to common shares for one customer.
I would recommend
Firstrade for basic trading and long term investing or IRA account. The website
layout is clean and it provides rich web based trading platform. Firstrade
account is beginner friendly for new investor or trader. Although the commission rate is not one of the
lowest among online discount brokerage, Firstrade does offer no fee IRA account
which includes no maintenance fee and no hidden fee. In addition, Firstrade
offers a standard web trading platform as well as a mobile application, named
Firstrade mobile, which is generic in nature and supports iPhone, BlackBerry
and other smart phones. It also provide a java based x-stream platform for
quotes, watchlist and portfolio analysis.
With the latest changes on its website, trading experience has been improving. There is still need additional improvement in the options trading platform. The technical analysis charts is still very basic and need additional improvements. The commissions and fees are decent except that the options exercise and assignment fee is rather excessive.