Firstrade Review 2024: Pros, Cons and How It Compares
Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
Our Take
4.5
The bottom line:
Pros & Cons
Pros
Commission-free stock, options and ETF trades.
$0 contract fee on options trades.
All mutual funds are commission-free.
Chinese language options.
Cons
No forex, futures or crypto trading.
Low interest rate on uninvested cash.
Compare to Similar Brokers
NerdWallet rating 4.8 /5 | NerdWallet rating 5.0 /5 | NerdWallet rating 4.6 /5 |
Fees $0 per online equity trade | Fees $0.005 per share; as low as $0.0005 with volume discounts | Fees $0 |
Account minimum $0 | Account minimum $0 | Account minimum $0 |
Promotion None no promotion available at this time | Promotion Exclusive! U.S. residents who open a new IBKR Pro account will receive a 0.25% rate reduction on margin loans. Terms apply. | Promotion Earn up to $10,000 when you transfer your investment portfolio to Public. |
Learn more on Charles Schwab's website | Learn more on Interactive Brokers' website | Learn more on Public's website |
Get more smart money moves — straight to your inbox
Become a NerdWallet member, and we’ll send you tailored articles we think you’ll love.
Full Review
In this review of Firstrade
Where Firstrade shines
Trading platform: Firstrade has two trading platforms, including the Options Wizard platform and a highly rated mobile app for iOS and Android.
Options trading: Firstrade is among the few brokers we review that doesn’t charge a per-contract fee for options trades.
Where Firstrade falls short
Advanced investment choice: Professional investors may be disappointed that Firstrade offers no forex, futures, crypto or futures options trading to complement its rock-bottom pricing on option trades. But retirement investors have more than enough options to build and manage their portfolio with Firstrade.
Low interest rate on uninvested cash: Uninvested cash earns a measly 0.45%. There are brokers that offer rates around 4%.
Alternatives to consider:
For more investment choice: Interactive Brokers
For a better interest rate: Vanguard
What type of investor should choose Firstrade?
Beginner and intermediate traders: If you don't need access to advanced securities, Firstrade has low costs, lots of low-cost funds, a solid trading platform and decent educational offerings.
Options traders: With no per-contract fee, if you want to trade options, Firstrade may be one of the cheapest places to do it. Firstrade also has an options-focused platform with webinars to help you learn how to trade.
International investors and native Chinese speakers: Not many platforms are open to international investors, but Firstrade is. They accept investors from a long list of pre-approved countries. Also, Firstrade’s platforms are available in traditional and simplified Chinese.
What the Nerds think 🤓
Chris Davis , investing editor and reviews lead
"The signup experience at Firstrade is pretty cumbersome. It took me several days to actually set the account up and get it funded, and a decent amount of back and forth with the company via the in-app messaging. But once you're in and you've got cash to invest, it's what I would describe as purely functional for advanced traders.
"That means there's no slick swiping or color schemes or even any kind of branding, really. If Robinhood is the Mac, Firstrade is the PC; it gets down to business. It's easy to find yourself near some pretty advanced trades. With a single tap, you'll choose stock or options trades. Another tap, and you could start the process of shorting or covering a position. It's all very matter of fact — and frankly, boring — but I suspect that's exactly what Firstrade users love about the platform."
Firstrade at a glance
Account minimum | $0 |
Stock trading costs | $0 |
Options trades | $0 |
Account fees (annual, transfer, closing, inactivity) | Annual fee: $0 Inactivity fee: $0 Outgoing full transfer fee: $75 Outgoing partial transfer fee: $55 |
Interest rate on uninvested cash | 0.45% |
Number of no-transaction-fee mutual funds | Over 6,400 |
Tradable securities | Stocks, mutual funds, ETFs, options, bonds |
Trading platform | Two: Web and mobile |
Mobile app | Available for iOS and Android |
Research and data | Four: MorningStar, Trading Central, OptionsPlay, TradingView |
Customer support options (includes how easy it is to find key details on the website). | Monday to Friday 24 hours by phone and email |
How to sign up for a Firstrade account
Unlike with other brokers, when you sign up for a Firstrade account, you have to send them a handful of online forms "via email or fax," though we did it through the app. Either way, it's definitely more challenging than signing up with other brokers.
It also might take you a little longer to transfer money into your investment account if you use a small bank that does not easily connect to Firstrade, though several brokers have this issue. You'll need your Social Security number and current address to sign up.
What to know about Firstrade's fees
Firstrade has a $0 account minimum and no stock, bond, fund or options trading costs. Somewhat rare among brokers, Firstrade doesn’t charge any per-contract fees for options trades.
Firstrade has a $75 full outgoing transfer fee to move assets out of your account, which is fairly standard. However, it also charges a $55 partial transfer fee, a fee that isn’t as common among the other brokers we review. Still, the brokerage has no annual account fees.
Firstrade does have a $100 fee if your account is unused for long enough that it is considered abandoned, but the company says it makes an effort to reach out to customers before that point.
Firstrade trading platforms and apps
Firstrade has two trading platforms, including the Options Wizard platform and a mobile app.
Options Wizard allows sophisticated analysis of potential losses and gains from options trading.
The Firstrade mobile app is highly rated by users and includes intuitive swipe actions, a consolidated portfolio dashboard and upgraded research with advanced charting capabilities. The app instantly syncs with desktop platforms, and users can trade, transfer funds among accounts, view order history and create a watchlist to follow trading opportunities. The app is available on both Android and iOS.
How we nerd out testing trading platforms
Our reviewers — who are writers and editors on NerdWallet’s content team — hands-on test every online broker platform in our analysis. That way, we’re able to report on every aspect of the user experience, from funding a new account to actually placing trades.
We score each broker against a set of criteria that factors in both the capabilities offered and the actual user experience of trading with those capabilities. This includes how easy it was to sign up for and fund a new account. Note that a broker may score very highly for the platforms it offers, but low for the experience of actually using that platform. These are scored separately in our analysis, and they are weighted evenly when factored into the broker’s overall score. This means a broker can offer an advanced trading platform, but if it is clunky to use or the process of opening an account is unnecessarily arduous, that will be reflected in their score.
Firstrade's investment selection
Firstrade customers have access to stocks, mutual funds, ETFs and options. It also offers a handful of choices when it comes to bonds, including corporate bonds, Treasurys, municipal bonds, agency bonds and bond ETFs. Firstrade also offers trading in fractional shares. This lets investors purchase stock by the dollar amount, rather than by the share, lowering the barrier to entry for high-priced stocks.
Most brokers have a selection of no-transaction-fee mutual funds, but then charge from $5 to $49.99 for buying or selling funds not on that list. Not Firstrade. Rare among brokers we review, Firstrade doesn't charge a trading fee on any of the thousands of mutual funds it has on offer.
If you're looking for forex, futures or crypto, unfortunately you won't find those assets here, and unlike some competitors, Firstrade doesn't offer clients access to IPOs or the over-the-counter market.
Other key Firstrade features
Research and data
Clients have access to free research from Morningstar, Trading Central and TradingView, daily newsletters and AI research with FirstradeGPT. Firstrade’s Market Heatmap gives a broad overview of the market trends, with bullish- and bearish-performing sectors visible at a glance. For options investors, Firstrade offers OptionsPlay, a free analytics tool, as well as educational seminars to help newbies learn the ropes.
Execution quality
Firstrade says its execution quality is 97.60%. When you're considering the costs of Firstrade, keep in mind that the company does accept payment for order flow. That means that market makers may reward Firstrade for routing your trades to them. Payment for order flow can incentivize brokers to seek those rebates rather than focusing on the absolute best price for the customer. That said, there are many discount brokers that use this business model, so Firstrade is far from alone.
The average execution quality of all brokers we review was 96.95% as of Oct. 16, 2024. That means 96.95% of orders sold for at a price that was at or better than the National Best Bid and Offer. Executing at or above the NBBO means you may receive a price improvement or a better share price than you were originally quoted.
IRA account
Firstrade offers traditional, Roth, SEP, SIMPLE and rollover IRAs. Not all brokerages give you access to small-business retirement plans like SEP and SIMPLE IRAs.
Open to international investors
Beyond the U.S., Firstrade also accepts clients from nearly 30 countries, including Austria, Belgium, China, Czech Republic, Denmark, Finland, France, Germany, Hong Kong, India, Ireland, Israel, Italy, Japan, Macau, Malaysia, Mexico, New Zealand, Norway, Poland, Portugal, Singapore, Spain, South Korea, Sweden, Taiwan, Thailand and the United Kingdom.
Chinese-language options
Native Chinese speakers will appreciate that Firstrade’s platforms are available in traditional and simplified Chinese.
Good to know about Firstrade
Low interest rate on uninvested cash
If you leave uninvested cash in your Firstrade account or don't reinvest dividends, you'll get an interest rate of 0.45%. That's not the worst rate, but it's far lower than several Firstrade competitors.
Is Firstrade safe?
All investing comes with the risk of loss. Firstrade does offer FDIC insurance through a sweep program to protect cash deposits and is covered by SIPC insurance, which protects brokerage accounts. These types of insurance don't apply to investment losses or price fluctuations. The company is also regulated by the Securities and Exchange Commission to ensure compliance with securities regulations, and by FINRA, which regulates broker-dealers.
Is an investment at Firstrade FDIC insured?
Yes, accounts with Firstrade are covered by FDIC insurance, but through a sweep program. That means uninvested cash is moved into an an interest-bearing deposit program offered through Firstrade's clearing partner Apex Clearing Corporation.
The Securities Investor Protection Corporation, or SIPC, insurance covers brokerage accounts. Brokerage accounts with Firstrade receive up to $500,000 in SIPC insurance for cash and assets in the account. For Cash Accounts, SIPC insurance covers up to $250,000.
Is Firstrade right for you?
Firstrade is an innovator in commission-free investing. Beyond $0 commissions on trading stocks, ETFs and options, Firstrade also doesn’t charge trading commissions on any mutual fund, nor does it charge a per-contract fee on options trades. Native Chinese speakers will be drawn to Firstrade’s platform, which is available in both traditional and simplified Chinese.
