August 26, 1999
BY THERESA W. CAREY
Firstrade shows up on many lists of low-cost online broker, thanks to its $9.95 commission on limit orders. Recently it dropped its market order commissions to $6.95 for up to 5,000 shares (add 1/2 cent per share for large orders). What you get here is a broker that's cheap and easy to get around, but has a few drawbacks.
The site is relatively basic, and thus easy to navigate, but Internet Explorer 5.0 users should be sure to follow the instructions to tune the browser to the site. Once you're into the customer area, labeled the Firstrade.Com Trading Center, the main functions are displayed on the left border (trading, quotes, reference) and across the top border (news, balances, holdings, order status and executions).
When placing a trade, you can access a preliminary quote before filling out the boxes for limit price, then you can get a current real-time quote on the confirmation screen. Placing the order requires entering a trading password, which is a good security feature. If you're willing to pay a little more, you can also place an order via touch-tone phone ($14.95 for a limit order) or a live broker (for $29.95).
Research functions are available from a drop-down list at the top of the screen, and include links to outside services for most of the offerings. The portfolio manager and charting are supplied by Reuters Moneynet, and there are also links to the usual suspects such as Zacks Investment Research1.
Firstrade (a subsidiary of Fleet Securities)
(http://www.firstrade.com/2)
| What can be traded online? | Stocks: Long, short |
| Mutual Funds: Yes | |
| Options: Yes (via e-mail) | |
| Bonds: No | |
| Other: No-fee IRAs, low margin rates, international customers OK | |
| Online Amenities: | Access to Reuters MoneyNet for portfolio management, Zack's investment research, free real-time quotes, Chinese language site. |
| Limit Order Commissions: | $9.95 |
| High Account Balance Benefits: | None |
This isn't a warm and fuzzy, "we do it all for you" site like DLJ Direct3, Barron's top-rated online broker this year (see "Growing Pains4," March 15, 1999); experienced traders with access to outside research are the best candidates for Firstrade, which is a subsidiary of Fleet Securities.
We got several comments about Firstrade in our Electronic Investor Online Trading mailbox (electronicinvestor@mailcity.com5): One correspondent wrote that Firstrade representatives were quick to answer the phone, but the customer service representative didn't seem to speak much English. (On the plus side, Firstrade is one of the few online brokers that accepts applications from non-U.S. residents.)
Two things may cause problems for some traders. First, you can't exercise an options contract online; you have to e-mail Firstrade's options department detailing which contracts to handle. They ask the user to include quite a bit of information in this e-mail, and there's no online form to help with the process.
Another drawback is that online orders are passed by live brokers for approval, and may take a minute or more to execute. This operational quirk may make Firstrade an unacceptable option for day traders or those who want to hit a specific market move.
All things considered, we rate Firstrade **.
Firstrade
| Trade Execution | 3 |
| Ease of Use | 4 |
| Reliability/Range of Offerings | 2.5 |
| Amenities | 2 |
| Commissions | 5 |
| Weighted Total Points | 15.4 |
| Rating | ** |
Theresa W. Carey is a contributing editor to Barron's who reviews online brokers for Website of the Week.
Printing, distribution, and use of this material is governed by your Subscription Agreement and copyright laws.
For information about subscribing, go to http://wsj.com