Firstrade Review 2011 Update

Firstrade is one of the online discount brokers that provides investors a low cost platform to trade stocks, ETFs (exchange traded funds) and options. It is an established brand and has been in the brokerage business for a long time. In this review, you will find information about how to open an account with Firstrade, the costs of investing with the broker, whether you want to buy stocks, ETFs, or mutual funds, and tools that Firstrade provides to make your trading and research easier.

Open an Account

Open a brokerage account with Firstrade is rather straightforward. Like with many other brokers, the account opening process can be completed entirely online, taking about 15 minutes to finish. Information you need to provide are pretty standard, name, address, email, employment, investment knowledge, etc. During the account application process, you will also be given options for how you want to fund your account. Firstrade provides a few choices to add funds to the account, including ACH, check, and wire. Of course, ACH is probably the easiest way to transfer money between you bank account and brokerage account at Firstrade.

In addition to funding your brokerage account directly from your bank, you can also transfer brokerage accounts at other brokers to Firstrade. Firstrade will reimburse up to $100 account transfer fee charged by other brokers when transferring $25,000 or more to Firstrade;

Commission & Fees

Firstrade offers investors a wide range of investment products, from stock and options trading to mutual fund and fixed income investments. When I first opened my account with Firstrade, I was actually attracted to it by its free mutual fund trading. Unfortunately, that’s not the case any more.

The cost of trading with Firstrade is rather high compared with what other discount brokers charge. For example, the commission for stock trade is $6.95 at Firstrade, which is lower than Scottrade’s $7.00 per trade, but significantly higher than Zecco’s $4.50 commission and TradeKing’s $4.95. Options trading at Firstrade will add another $1.95 per contract, where at Zecco and TradKing, the extra cost is $0.50/contract. However, Firstrade does have an edge over these brokers when it comes mutual fund investment: Firstrade $9.95, Zecco $10.00, TradeKing $14.95, and Scottrade $17.95 for each no-transaction fee mutual fund order.

Firstrade is now offering 10 commission free ETFs.

Firstrade Trading Platform

Firtrade interface

Firstrade’s main website quite simple with some useful information. At the main account page, you can find basic information about your account, such as holdings and account value, as well as equities you are interested in (those in the wish list). In addition, you can also get a quick look of the markets. Since Firstrade is entirely web-based (they do have mobile trading platform which will be discussed later), you can place a trade, conduct research, and educate yourself from within your account.

Firstrade Mobile

Firstrade MobileFirstrade mobile is also quite new. The first difference from other brokers that you will notice when going to Firstrade mobile at m.firstrade.com is that you can see performance of all three major indices without even logging into my own account. Also, other information not directly related to personal data, such as market news, stock quotes and news, and movers on NYSE, Nasdaq, and Amex, are all available to everybody, even those don’t have an account with the broker.

Once logged in, since you have already got quite a few functions for free, there aren’t much left to use, except that you can check your positions (break down into stocks and options), account balance, order status, and of course, make a trade. To get the quote, you need to use the Quote function first, then trade the stock either from there or go back to the Trading screen. Other platforms, such as Scottrade, give the option to get the quote on the Trading screen.

Other Tools

If you want to make a trade, you will have to go to a different page to place your order by entering transaction type (buy or sell), symbol, shares, and order type (market or limit). This is the same as most other web-based trading platforms. Though there’s no streaming quotes on its homepage, Firstrade does have another tool, called X-Stream, that provides real-time streaming quotes, which can launched by clicking the Real-time Streaming on the top right corner of the main page.

Firtrade X-Stream Watchlist

Firstrade’s java-based X-Stream tool allows you to track up to 20 stocks simultaneously. Every field and color is fully customizable and all quotes are updated in real-time as the market moves. In addition to quotes, you also have access to streaming charts with real-time technical analytics, streaming time and sale information, quick order entry, company profiles, and many other features.

Firtrade X-Stream Portfolio

In addition, Firstrade also has another tool that allows you to track multiple portfolios in real-time and updates your profits or losses on each position and the entire portfolio in real-time without having to refresh. It’s called MarketAce Portfolio Manager. MarketAce shows you to track each stock’s performance for that day and from the purchase price. You can specify your portfolio name and customize all the positions for each portfolio. You may also enter the cash balance of your portfolio to get the total value of your account updated in real-time. This is a unique tool to Firstrade as far as I know.

Conclusions

So overall, Firstrade isn’t very competitive in terms of trading cost, unless you also want to buy mutual funds through the broker. However, it does have some features that you won’t find at other brokers. If you are interested in trading with Firstrade, the broker is running a triple-bonus promotion that will give you 100 free trades when opening a new account, plus $100 account transfer reimbursement (if you transfer from another broker to Firstrade) and $100 cash back, depending on your account value. Check it out to get more details on how you can earn the bonuses.