Today Firstrade (read our full review) has announced it is reducing equity, ETF, and option trade commissions for all clients, effective immediately. The move to reduce trade commissions comes less than two weeks after Charles Schwab lowered its own commission rates.

Equity trades, including stocks and ETFs, have been lowered to $4.95 per trade (previously $6.95) while options trades have been lowered to $4.95 + $.65 per contract (previously $6.95 + $.75 per contract). Here’s a breakdown against a variety of Firstrade’s competitors.

firstrade-commissions-comparison-chart

The new commission rates structure puts Firstrade in direct competition with TradeKing (acquired by Ally Financial in April, 2016) as well as OptionsHouse (acquired by ETRADE in July, 2016). While TradeKing’s rates will probably remain consistent under Ally, OptionsHouse’s future rates are uncertain.

John Liu, Firstrade’s founder and CEO commented,

Since Firstrade was established in 1985, consistently delivering value to our customers was a top priority. With these fee reductions, we are demonstrating our commitment to helping investors meet their financial objectives with some of the lowest trading costs in the industry. These latest reductions for investors represent the most recent, tangible evidence of our continued investment in technology. Thanks to these investments, we can offer our clients more or less, which means not just lowering costs but adding value, and a compelling reason to do business with Firstrade.

Firstrade does a good job providing a clean, easy to use, all-around value experience for investors, especially Chinese-American investors. Competing against the big full-service brokers is not easy, and with this new pricing structure in place, Firstrade has put itself in direct competition with discount online brokers instead.

Considering the Firstrade offering was already robust at a higher commission price, I look forward to assessing Firstrade against its new discount competitors in the future.

Source:
Firstrade lowers its Stocks, ETFs, and Options Fees
http://www.prnewswire.com/news-releases/firstrade-lowers-its-stocks-etfs-and-options-fees-300406421.html
February 15th, 2017