Back in 1985 in Queens, New York, a company known as Firstrade Securities was born. This company was trying to satisfy the needs of the community in the area, particularly Chinese immigrants, and it has been active ever since. Firstrade is one of the leaders in the industry, and nowadays it is known for allowing investors to trade without worrying about costs.
But as it applies to every trading platform, you want to make sure it’s safe and qualitative in order to start trading. That being said, before you jump on the Firstrade ride, you must discover what it has to offer, as well as its pros and cons. We will provide all the information in the following paragraphs.
Who Is Firstrade for?
Firstrade is a great alternative for people who are either new to trading and want something convenient and easy to start with, or international investors. It comes with $0 contract fees for options trades. Besides, there is no commission for mutual funds or stocks, options, or ETF trades. Firstrade is also great for native Chinese investors because the broker has Chinese language options.
These categories of people will most likely appreciate what Firstrade has to offer:
- Investors who want to invest in mutual funds
- Native Chinese speakers who want to trade
- International investors
- Investors who are just starting out
- People with lower income who cannot spend too much on commissions
- Options traders
So, if you are a beginner and want to know more about trading, then Firstrade might be a good platform to try. Besides, it’s also great for people looking for something to use in the long-term since it has trades free of commission for mutual funds. However, keep in mind that the number of tools may be a bit limited.
Things We Like
What we like so much about the platform is, of course, the fact that it’s free of commissions for trades and mutual funds. In fact, Firstrade was the first platform to offer options, stocks, and ETFs without commission before trades with no fees became normal at the end of 2019.
On top of that, we also love the fact that Firstrade offers retirement accounts, but also options trades with no fees per contract. The service has Chinese language options, and it also has a lot of educational resources. There are also three different platforms, as well as a mobile app.
Things We Don’t Like
One thing we do not like about Firstrade is the fact that there are very limited options in terms of offers. Forex or futures options trading are not available. So, anyone looking forward to something of the sort would have to pick another platform.
Pros / Cons
- Commission-free stock, ETF and options trades.
- $0 contract fee on options trades
- All mutual funds are commission-free
- No 24/7 customer support
- You can trade only on US markets
- No credit/debit cards and electronic wallets for money transfer
Safety and Regulation
Not only is Firstrade great for beginners in trading, but it is also amazing for anyone looking to diversify their portfolio. Still, before you sign up, it is crucial to get as many details about the platform as you can.
Who Is Firstrade?
Firstrade was founded back in 1985, and it was initially called First Flushing Securities. The company is a discount stock broker based in the U.S. Not only does it support English speakers, but it also has Chinese language options, making trading accessible for Chinese natives. The platform has commission-free stocks and options trades.
It is different from other platforms in many ways. For instance, this broker was the only one to offer retirement accounts, whereas Robinhood, the first free-trade brokerage, only offers brokerage accounts for a tax.
Firstrade also comes with a desktop platform, Firstrade Navigator and Options Wizard, as well as a mobile app. Besides, it features a referral program, so new and existing customers can get a free stock, while a friend they refer to the company can also get a free stock. Moreover, the company says that one in every 100 people can get a free Facebook, Microsoft, or Apple stock.
Is Firstrade Regulated?
Fortunately, Firstrade is a regulated platform. It is regulated by the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC).
Is Firstrade Safe?
Firstrade is a safe platform, not only due to being regulated by two top-tier financial authorities like FINRA and SEC but also because of the experience they have in the field. There is high investor protection in place, of respectively $500,000. This also has $250,000 for cash included.
There are a few things that should be mentioned though. To begin with, the company does not have a banking license, and there is no negative balance protection provided. Not to mention that it is not listed on the stock exchange.
Countries It Accepts Clients from?
The U.S. is on top of the list when it comes to countries Firstrade accepts clients from. But aside from that, the company also accepts clients from 60 other territories and nations. Some of them include China, Japan, Hong Kong, Taiwan, Singapore, South Korea, Macau, New Zealand, Mexico, and the United Arab Emirates. People do not need a tax ID or U.S. Social Security number to become members.
Firstrade won a few awards throughout its operations. Not only was it rated as one of the best brokers on the Internet by publications like Forbes, Barron’s, and Smart Money, but it also got 4.5 stars out of five for the 5th consecutive year. On top of that, it received the “Best in Class” award by StockBrokers.com 2019 Online Broker Review.
Range of Offerings and Products
While it has its limitations such as Forex or futures options trading not being offered, Firstrade offers multiple products, especially in terms of tradable securities. That being said, people have a lot of chances to diversify their portfolios. Firstrade offers:
- Mutual funds
Over 3,400 mutual funds are free of commission, and all ETFs come with no commission.
Firstrade comes with a web and a mobile trading platform. The web trading platform is very easy to navigate, and all beginners will have a great time browsing it. The user-friendly experience is also boosted by the good search functions added to the platform. It is possible to set up alerts, while fee reports and a clear portfolio are also offered.
Unfortunately, there are some shortcomings too, such as the fact that there is only a one-step login authentication option available. Also, there is not a lot of customizability.
The mobile platform is available for both iOS and Android devices. It also has a good search function, and it is user-friendly. However, it has no price alerts and, just like the web version, it has no two-step login. Bonds and mutual funds are not covered by it.
Firstrade offers multiple account types, such as business accounts, custodial accounts, retirement accounts, regular investing accounts, education savings accounts, international accounts, and Firstrade Cash Management accounts.
Depositing money on Firstrade requires no fee. But there are some drawbacks regarding money deposits. There is only one base currency available, and the outgoing wire transfer fee is very high. Besides, you cannot deposit with credit or debit cards. Electronic wallets are not accepted either. You can only deposit money with bank transfers.
Both U.S. and international clients will be able to deposit as much as they want because the minimum deposit is $0 for them. But this applies to brokerage accounts. Margin accounts have a $2,000 minimum deposit, and day trading accounts have a $25,000 one.
Also, withdrawals cannot be done with electronic wallets and credit/debit cards. They are only available through bank transfer.
Currently, Firstrade offers no demo account option.
Firstrade comes with various promotions from time to time. For instance, they currently have a promotion that grants two free stocks to people who join.
Client Support and Education
In terms of education, the platform has quite a few things to offer. If you are a beginner, then you will get a lot of resources. You have access to webinars, general educational videos, educational articles, and platform tutorial videos. All of them are packed with useful information that will be useful in your trades on the platform and not only.
Still, the site lacks more educational resources for more advanced users, and it has some work to do in this area. There is no demo account, for instance, and it is a missed opportunity.
Verdict – Overall Rating
Firstrade makes a wonderful platform for people looking for portfolio diversification and no commissions, but it is also great for beginners. It has a lot of educational resources, as well as user-friendly platforms that will be a piece of cake to navigate.
At the same time, despite all of its benefits, Firstrade still has some work to do. It needs more tools, as well as more diversification and more deposit and withdrawal options. These downsides are limiting the site’s ability to bring in new clients while making the life of new investors harder. But if improvements are made, the platform can get even better with time.
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There is a very high degree of risk involved in trading securities.
With respect to margin-based foreign exchange trading, off-exchange derivatives, and cryptocurrencies, there is considerable exposure to risk, including but not limited to, leverage, creditworthiness, limited regulatory protection, and market volatility that may substantially affect the price or liquidity of a currency or related instrument. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable, or that they will not result in losses. Learn more at Wikipedia.
All investments involve risks and are not suitable for every investor. The value of securities may fluctuate and as a result, clients may lose more than their original investment. The past performance of a security or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk it does not assure a profit, or protect against the loss, in a down market.
There is always the potential of losing money when you invest in securities or other financial products. Investors should consider their investment objectives and risks carefully before investing. More details here.
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