Review
Updated
Firstrade is a strong first choice for traders interested in more than basic trading. Like many brokers, Firstrade offers no-commission trades, but it stands out in terms of educational resources and a suite of services for options-minded investors. Read our full review to learn if Firstrade is the best online broker for you.
Ratings Methodology
Firstrade
Rating image, 3.5 out of 5 stars.
3.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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= Best
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= Excellent
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= Good
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= Fair
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= Poor
= Best
= Excellent
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= Fair = PoorBottom Line
A great fit for investors seeking to trade a wide variety of derivatives, benefit from professional-grade analytics, and avoid high contract fees.
Fees:
$0 for stock, ETF, options, and mutual funds trades
Account Minimum:
$0
Alternatives to Consider
We recommend comparing brokerage options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of our best trading platforms of 2024.
| Account | Fees | Account Minimum | |
|---|---|---|---|
|
Featured Offer
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
$0 for stocks, ETFs, and options; $5 monthly for Robinhood Gold | $0 | |
|
$0 for stocks, $0 for options contracts | $0 | |
Rating image, 5.0 out of 5 stars.
5.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
$0 commission for online U.S. stock and ETF trades; trade fractional shares for as little as $1 | $0 |
Full Firstrade review
Pros
- OptionsPlay's Options Wizard
- Securities Lending Income Program
- Education center
- Refer-a-friend bonus
Cons
- High margin rates for low balances
- Subpar customer service
- No fractional shares
Top perks
No commissions for online trades
Firstrade offers $0 commissions for online trades. Note: Most major brokers now offer commission-free trading.
No deposit minimums
With no minimum deposit or account balance requirements, it's easy to open and fund an account.
Options contract fees
Firstrade's contract fees are significantly lower than those charged by many other brokers. Firstrade charges $0. The difference adds up, especially for investors who trade high volumes of derivative contracts.
OptionsPlay suite
The Firstrade OptionsPlay platform offers perks for options traders from novices to experts. For beginners, OptionsPlay's Options Wizard offers nearly 30 instructional videos covering the what, why, and how of options trading. More experienced users will find resources ranging from technical indicators to credit spread reports.
Securities Lending Income Program
Through Firstrade's Securities Lending Income Program, investors can earn extra income while investing in their favorite companies. It works like this: Investors who own shares outright can lend those shares to a clearinghouse, Apex Clearing. The clearinghouse uses those shares to meet collateral requirements and pays interest to the owner of the shares. Any lent shares are backed by 102% cash collateral, and investors may sell their shares at any time.
It is important to note that investors enroll accounts, not shares, in the lending program. This means that investors cannot select or exclude certain stocks in a given account from being lent out, and there is no guarantee that eligible shares will be lent. Additionally, investors lose voting rights on lent shares. Also, dividends and interest are taxed at ordinary income rates, rather than capital gains tax rates.
Educational resources
Firstrade's education center offers a wealth of knowledge for novice and experienced investors. Including articles, videos, webinars, podcasts, and e-books, the education center covers a wide range of topics, from fixed-income securities to options contracts. Written in plain English, Firstrade's educational content is accessible to everyone; you don't even have to own an account.
Mobile app
The Firstrade mobile app is sleek and easy to use on the go. Rating it 4.6 out of 5 stars on both iOS and Google Play stores, nearly 8,000 reviewers agree that the Firstrade mobile app is a powerful tool for account holders.
Free stocks
When a new Firstrade user opens an account with an existing user's referral link, both users receive a free stock valued up to $200. An algorithm picks the stock from the most popular companies traded on the platform in the last quarter, as measured by trade volume. Users can collect up to $500 worth of free stock by referring friends.
What could be improved
Customer service
Firstrade’s customer support team has received a lot of poor reviews. Reasons include slow response times to customer emails, difficulty getting approval for trading strategies and withdrawals, and inexperienced or poorly trained customer service representatives.
High margin rates
Firstrade's margin rates are similar to (and in some cases a bit higher than) those of many brokerages we've reviewed. If you're looking for lower numbers, you can check out Interactive Brokers, which often has super-low rates.
No fractional shares
Although many other discount brokers now help traders buy and sell fractional shares, Firstrade does not offer fractional share trading on stocks or ETFs. Investors with low balances may find it prohibitively expensive to invest in high-value stocks.
LEARN MORE: Best brokers for fractional shares
Commissions
Like many discount brokers, Firstrade offers zero-dollar commissions on online trades. What's more, Firstrade is one of the few stock brokers that offers $0 commissions and no per-contract fee for options trades.
| Trade type | Commission |
| Online stocks, ETFs, and mutual funds | $0 |
| Options | $0 (no per-contract fee) |
Buying mutual funds and ETFs
Firstrade offers a wide variety of mutual funds and ETFs. A $0 commission on each trade takes the hassle out of investing in these securities.
| Total mutual funds | over 11,000 |
| No-load, no-commission-fee mutual funds | over 3,400 |
| No-commission ETFs | over 2,200 |
Trading platform
Firstrade offers a relatively simple trading platform which beginners may find easy to navigate, but which experienced investors may find lacking. Users may prefer Firstrade's mobile app for iOS and Android devices, which is rated 4.6 stars on both platforms.
Margin rates
Experienced margin traders may recognize that Firstrade's margin rates are slightly higher than those of some other brokers. Margin rates start at 10.25% for balances under $10,000.
| Margin Balance | Effective Rate |
|---|---|
| $1 million or more | 6.00% |
| $500,000-$999,999 | 6.60% |
| $250,000-$499,999 | 8.50% |
| $100,000-$249,999 | 8.75% |
| $50,000-$99,999 | 9.25% |
| $25,000-$49,999 | 9.75% |
| $10,000-$24,999 | 10.00% |
| $0-$9,999 | 10.25% |
Source: Firstrade
Research offerings
Firstrade offers a variety of resources to its customers, including research and news from Morningstar, Briefing.com, Zacks, and Bazinga. Additionally, Firstrade's partnership with OptionsPlay provides customers with access to covered call, short put, and credit spread reports.
This brokerage is right for you if:
- You want to keep expenses low. With $0 commissions and $0 options contract fees, stock, ETF, and options trades won't break the bank.
- You want derivative information at your fingertips. Firstrade's partnership with OptionsPlay provides traders with a wide variety of information and research. The Options Wizard allows traders to view trends and make trades easily, while reports on calls, puts, and spreads are provided to traders multiple times per day.
- You seek alternative investment options. For derivatives traders, Firstrade provides traders with OptionsPlay tools and reports, and $0 contract fees.
Compare Firstrade to other brokerages
Wondering how Firstrade stacks up to the competition? Check out our reviews:
Our brokerage rating methodology
At The Motley Fool Ascent, brokerages are rated on a scale of one to five stars. We primarily focus on fees, available assets, and account types; however, we also take into account features like research, education, tax-loss harvesting, and highly rated mobile apps. Our highest-rated brokerages generally include low fees, a diverse range of assets and account types, and useful platform features.
See our full methodology here: Ratings Methodology
Our Brokerages Expert
Charlie Pastor, CFP® is a full-time financial planner dedicated to overserving the underserved. He has a degree in Finance, Accounting, and Personal Financial Planning from the University of Colorado Boulder. His professional experience includes founding a Registered Investment Advisor firm dedicated to serving young professionals. Outside of writing for The Ascent, Charlie enjoys serving as political advocacy chair for the Financial Planning Association of Colorado.
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Robinhood disclosure
All investments involve risk and loss of principal is possible.
Securities are offered through Robinhood Financial LLC, member FINRA/SIPC. Cryptocurrency services are offered through an account with Robinhood Crypto, LLC (NMLS ID 1702840). Robinhood Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Cryptocurrency held through Robinhood Crypto is not FDIC insured or SIPC protected. For more information see the Robinhood Crypto Risk Disclosure.
Trades of stocks, ETFs and options are commission-free at Robinhood Financial LLC. Other fees may apply. Please see Robinhood Financial’s Fee Schedule to learn more.
Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement.
Robinhood Gold is an account offering premium services available for a $5 monthly fee. Not all investors will be eligible to trade on Margin. Margin investing involves the risk of greater investment losses. Additional interest charges may apply depending on the amount of margin used. Bigger Instant Deposits are only available if your Instant Deposits status is in good standing.
Fidelity disclosure
Fractional share quantities can be entered out to 3 decimal places (.001) as long as the value of the order is at least $1.00. Dollar-based trades can be entered out to 2 decimal places (e.g. $250.00)