Firstrade Review

Firstrade Review

Firstrade may not be a broker many investors have heard of. It does not have any fancy commercials like its competitors Etrade, Scottrade or TD Ameritrade, yet it manages to compete with all of them. 

With its $6.95 trades and a website that provides a little bit of everything for everyone, Firstrade puts up a respectable fight with the leaders in the industry. The question is, however, does that make them a legitimate consideration to park an investment portfolio? Or is Firstrade a broker not worth the trouble?

This review will break down the facts and reveal the answer. 

Commissions & Fees

When it comes to trades, Firstrade keeps things simple, offering investors flat-fee stock trades for $6.95 each. Options trades run $6.95 + $.75 per contract.

On the equities side, Firstrade competes most closely with Scottrade, whose trades run $7 per trade or $.05 more per. And for options trading, it is no coincidence that TD Ameritrade, ETRADE, Charles Schwab and Fidelity all charge $.75 per contract, plus their normal base fee. 

Firstrade has the advantage with mutual funds, charging less than its big brother competitors. However, matched up against discount brokers such as TradeKing and OptionsHouse, Firstrade is right in line.

Lastly, Firstrade does offer 10 commission-free ETFs, which is a plus. Unfortunately though, this is not many when compared to Fidelity, ETRADE or TD Ameritrade, which all offer more than 100.

	Firstrade	Scottrade	TradeKing	tradeMONSTER	TD Ameritrade
Stock Trades	$6.95	$7.00	$4.95	$7.50	$9.99
Options Base	$6.95	$7.00	$4.95	$0.00	$9.99
Per Contract	$0.75	$1.25	$0.65	$0.50	$0.75
Mutual Funds ($)	$9.95	$17.00	$9.95	$15.00	$49.99
Broker Trades	$26.95	$32.00	$20.00	$15.00	$44.99
Commissions, Fees

Research

As far as research goes, Firstrade's offering is strongest with stocks, while ETFs and mutual funds research lags. The depth of coverage overall is below average, however, when compared to other brokers that charge similar commissions.

Firstrade offers one third-party research report for stocks, and none for ETFs or mutual funds. Scottrade, which charges just $.05 more per trade, provides its clients with three third-party research reports for stocks, one for ETFs and one for mutual funds. Lastly, pay just $1 more per trade and investors can have access to the 13 third-party research reports offered by Fidelity for equities alone.

Even discount broker competitor TradeKing Group, which charges only $4.95 per trade, has a deeper research offering. Compare the two head-to-head, and the thoroughness of TradeKing's ETFs and mutual funds research is superior, while the equities research is arguably much closer. 

All in all, no matter how the comparisons are drawn up, Firstrade fails to provide a quality research offering for the price it charges per trade.

Ease of Use

If there is one area where Firstrade shines, however, with its research, tools and website in general, it is in the category of ease-of-use. 

Firstrade's website is not only well designed, but also easy to navigate. It just works. The primary navigation menu is well labeled and takes advantage of primary links with sub-navigation below, a proven format that yields happy clients. The broker also boasts a site-wide quote bar with real-time streaming quotes. Top that off with a well laid out research area, and it is a recipe for success.

Even the client dashboard is well constructed, clean and customizable. Customizable dashboards are becoming increasingly popular with clients, offering them a clear view of everything important to them upon login. While Firstrade's client dashboard is no ETRADE 360 (our personal favorite on the web), the broker made an effort.

Other Notes

Firstrade does not offer a desktop-based platform. Instead, its website and Java-based X-Stream Watchlist tool make up its platform. This leaves Firstrade at a disadvantage when trying to attract even remotely active traders, as there is a distinct lack of depth on the whole.

Charting, for example, is okay for a website, but without a platform, the lack of customizations becomes very noticeable. Less than 20 technical indicators are available, and even basic customizations cannot be made to any of them. Also not available: virtual trading, chart notes, trading off the chart or advanced drawing tools such as Fibonacci retracements. 

For clients who can't live without Level II quotes or more advanced charting, Firstrade does offer an X-Stream Level II service for $19.95 per month. However, we advise saving the money.

On the mobile trading front, Firstrade offers a basic iPhone app but not an iPad or Android app as of yet. 

Closing Thoughts

While Firstrade offers a well-organized and easy-to-use website, the broker lacks the depth to compete with not only the big full-service brokers, but also those that are nearly identical in price.

Until Firstrade can improve its research and develop an active trader platform, investors will have a hard time making the broker their official home for investments.