Searching for a new broker can be a real nightmare; there’s more to think about than just price. It’s very unlikely for instance that you’re looking to change brokers because you’re current broker is too expensive. If expensive fees are causing you to lose money I’d say you need to change your strategy before blaming your broker.
So what do you need to look for? Well there are hidden fees, platform limitations, different types of training and education and that’s before you look at products traded and hours of trading.
What’s right for one trader may not be right for you, so to help you out we’ve compared two of the best known brokers Firstrade and E*TRADE, we’ve tested their platforms, checked out their service and compared their fees.
Products & Services
|website||Visit the Firstrade Website||Visit the E*TRADE Website|
|Our Review||Read Our Full Firstrade Review||Read Our Full E*TRADE Review|
|Bank Deposits||Bank Deposits|
|Certificates of Deposits||Certificates of Deposits|
|Day Trading||Day Trading|
|Services||Extended Hours Trading||Extended Hours Trading|
|Mutual Funds||Mutual Funds|
|Trading Community||Trading Community|
Considering the size difference between these two brokers, it’s a little surprising that they offer a comparable number of services. Sure Firstrade can’t match E*TRADE’s local branch network and they don’t offer bank accounts either, but for basic trading products they’re exactly the same.
I’m not sure I’ve ever felt the need to visit my broker anyway, so I’m not sure having a local branch near me is an advantage but maybe there are people who like the satisfaction of knowing if there’s a problem they’re just down the road.
One point about day traders, Firstrade don’t offer a level 2 direct access platform so they’re not suitable for all you day traders and scalpers out there. You’ll have to sign-up with E*TRADE and deposit $50,000 to get access to their level 2 platform.
|Automated Trading||Automated Trading|
|Investor Resource Center||Investor Resource Center|
|Mobile Trading||Mobile Trading|
|Online Advisor||Online Advisor|
||Profit & Loss Calculator||Profit & Loss Calculator|
|Streaming Charts||Streaming Charts|
|Stock & Fund Screeners||Stock & Fund Screeners|
|Tables & Graphs||Tables & Graphs|
|Training & Education||Training & Education|
|Virtual Trading||Virtual Trading|
Trading Tools Overview
Firstrade have come in for some stick regarding their platform in recent years, in October 2010 they attempted to address those concerns by releasing X-Stream.
X-Stream is a web based platform developed by Firstrade, it has a nice clean user interface but the tools are still a little on the basic side, its leagues ahead of where it used to be, but still not up to the class leading platforms of other brokers.
E*TRADE on the other hand have more than one platform to choose from depending on your account size. Their standard account has more tools to offer than the Firstrade platform and is suitable for beginners and intermediate traders.
If you’re an advanced trader with a requirement for level 2 data then you’ll need the E*TRADE Pro account. This is available free to traders with an account balance in excess of $50,000.
Fees & Commissions
|Margin Account Minimum||$2000||$2000|
|Stocks & ETFs||$6.95||$9.99 (0-149 Trades)|
|Options Base||$6.95||$9.99 (0-149 Contracts)|
|Options Per Contract||$0.75||$0.75 per contract|
|Account Management Fee||$0.00||$0.00|
|Broker Assisted Trades||$27.00||$45.00|
|Bonds||Net Yield (Included in Price)||$1.00/bond ($10.00 minimum)|
|IRA Annual Fee||$0.00||$0.00|
Both these brokers are good in their own right, but they appeal to different ends of the market. E*TRADE are suitable for more advanced traders with sizeable account balances who trade several times a day. Firstrade on the other hand are really only suitable for smaller traders who trade once or twice a month.
One disappointing aspect of both brokers is the lack of a virtual trading platform. Virtual trading is vital tool for any trader experienced or not. You can’t develop new trading strategies without one. Sure you can use a third party program but really this functionality should be built in.
If you’re a beginner neither of these brokers is really suitable, firstly because of the lack of virtual trading and secondly because in the case of Firstrade their training materials aren’t really good enough and E*TRADE’s training is set at a more advanced level. Beginners would be better served by either TradeKing or Zecco.