Who is the King of Zero Commission Stock Trades? Robinhood vs Firstrade – We Compare Trading Platform, News, Research & Customer Satisfaction and more.
A Quick History of Discount Online Brokerage Houses
The Stock Brokerage Industry had its first shake-up in the late 1990’s with the emergence of the first discount online stock brokerage houses. These new brokerages forced competition in commissions and services which reduced the commission costs dramatically.
Commissions went from $100 per phone call trade, to $9.99 for online trades. These commissions costs continued to reduce to 2018 with Interactive Brokers offering $1.- trades.
Now the brokerage industry is facing another massive disruptive change.
$0 Commission Free Stock Trading.
The first major Brokerage to make the move to Commission Free Trading is Firstrade. Robinhood which is a mobile-first brokerage with a very simple app allows you to trade for free also, but it is more a start-up than an established player.
The 4 Important Assessment Factors for Brokers are:
- Trades, Commissions & Account Minimum
- Trading Platform
- Customer Support & Education
- Account Minimum
Firstrade Review – Perfect for Traders & Investors Seeking FREE $0 Commissions Trading on Stocks & Options & an Industry Best 700+ Commission-Free ETF’s
Add to this full MorningStar access and 5-star customer satisfaction mean Firstrade is a great choice for brokerage services.
There is a lot to love about Firstrade.
Important Announcement: On August 23, 2018, Firstrade made the extremely bold move to Commission Free Trading. Firstrade was already our 2018 U.S. broker review winner and had amongst the lowest commissions in the industry, now they have officially the lowest in the industry with ZERO, yes ZERO commissions.
This move, of course, puts Firstrade in a completely new category of Stock Brokerage.
The commission-free trading also extends to over 700 Exchange Traded Funds (ETF’S) on offer. That is over twice as many as the next best competitor TD Ameritrade.
You also get completely cost-free access to the suite of Morning Star research, only 3 other brokers offer free research of this quality.
The Firstrade Trading Platforms Firstrade Navigator, Options Wizards, and Real-time Watchlists hold up well against the competition and is by far better than any other broker offering free trades.
And finally a 5-Star Customer Satisfaction Rating rounds of the package, for an excellent Brokerage for mid to long-term investors.
|★ ZERO Commissions|
★ 700+ Commission-Free ETF’s
★ Free MorningStar Research
★ Excellent Customer Satisfaction
★ International Broker
|✘ Slightly High Margin Rates|
Trades, Commissions & Account Minimum – Firstrade
Firstrade is the outright winner in the commissions’ round with a $0 flat fee per trade and $0 per options contract.
But what also adds to the appeal with Firstrade is the 700+ commission-free Exchange Traded Funds on offer. This is a huge selection, more than the total for all the other brokers reviewed in our Top 10 Brokers Review. You can purchase Mutual Funds for $0 and Bond purchases are on a Net Yield Basis.
Account minimum is $0, but of course, you will need money to trade.
Trading Platform – Highly Recommended
Firstrade has completely rebuilt their trading platform from scratch, and the improvement is dramatic. Gone are clunky java programs, replaced by a fast HTML 5.0 platform. This platform is future proofed and highly scalable. The user experience is clean, intuitive and easy to learn.
Also, what we like is its price – Free
The trading platform has a number of components. The web-based platform is available for all clients and if you have an account balance over $10,000 you will have complimentary access to Firstrade Navigator a downloadable more powerful trading experience.
Web Trading Platform – Heatmap & Sector & Industries Tool
To be able to find a potential opportunity to trade, you can start with the big picture view of the market and drill down from there. The heatmap is designed for short-term traders who need to see where the price action and volatility is on any given day.
Web Trading Platform – Advanced Screener, Fundamental Data & Event Calendar
No product set would be complete without the ability to scan and screen for stocks based on the fundamental data. Firstrade attempt at this is pretty good. It does not match the offerings from TradingView or TC2000, but it is adequate for most investors.
Web Trading – OptionsPlay
Firstrade put a lot of effort into the Options Trading Platform OptionsPlay. A first-class platform which focuses first on what kind of options strategy you want to implement. You can drill down through industries and sectors and you instantly get a technical analysis for the stock, the bullish or bearish score. You can even sort your watchlist based on the bullish or bearish score.
The image to the right shows the OptionsPlay Bullish and Bearish Ratings based on three scenarios based on if you are feeling bullish or bearish about the stock or index.
- Strategy 1 – Selling 100 Shares of the stock – A Bearish Strategy – Cost would be $6764 – with a mediocre score of 96 for the trade
- Strategy 2 – Buy the June 9th Put Options – Bearish – Cost $185 – Low probability Rating of 74
- Strategy 3 – Buy June 9th Put Vertical – Bearish – Cost $147 – High Probability Rating of 104
I really like the implementation here, simple and implementable.
Desktop Trading Platform – Firstrade Navigator
Firstrade Navigator is a very nicely designed and relatively powerful system.
It is very customizable and also has a selection of widgets that you can embed into the dashboard. Studies and indicators are included.
Customer Support, Research & Education – Firstrade
Firstrade does very well in this round. They provide a full email, chat and telephone coverage and are quick to answer. They have also had zero negative tweets or negative TrustPilot reviews in the last 12 months. Additionally, customers rave about the service which is unusual, this means a 5-star customer satisfaction rating.
What I also like is they throw into the mix free access to Zacks Research, Morningstar Research & Ratings, Breifing.com & Benzinga (although not the real-time Benzinga PRO version). These third-party services are quite valuable and considering Firstrade offer very low commissions they also add value through these services.
|Open an Account with Firstrade||Read The Full Firstrade Broker Review|
Robinhood Free Stock Trading Broker Review
Recommended for those wanting free stock trades who want to keep it super simple, who do not need strong technical and fundamental analysis of stocks and are uncomfortable with using a PC.
Robinhood was really the first Brokerage to offer free trades, started in 2013 it has now raised through private venture capital over $500 million to fund the business.
With over one million registered accounts it is quickly becoming a force to be reckoned with.
|★ $0 Commissions|
★ Simple Trading App
★ Simple to understand Margin Fees
★ Happy Customer Base
|✘ No Technical Analysis Possible|
✘ No Fundamentals or Screening
✘ Web Application is Basic
✘ U.S. Only
Trades, Commissions & Account Minimum – Robinhood
Free trading refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities via mobile devices. As Robinhood is a mobile-first company, this means if you trade from your smartphone on the Major U.S. listed stocks available through Robinhood then the trade has no cost.
Account minimum is $0, but of course, you will need money to trade.
Mobile first refers to the fact that Robinhood started only as an app on a phone and not a fully fledge trading platform. This means you have to do everything via the phone including opening, funding, and trading.
The Robinhood blog also suggests they are moving more and more functionality form the app to the web.
The Robinhood App.
Clean simple and intuitive, the app design and interface would make Steve Jobs happy, so simple in fact the company claim that no user manual is required to use it.
So, all good so far. But if you are a serious trader or investor, Robinhood will be good for executing the trades, but any serious amount of technical analysis or even analysis of the fundamentals of a stock is impossible and would require other stand-alone applications, such as:
- Tradingview for a great online analysis experience
- TC2000 for impressive fundamental scanning and technical analysis
- Metastock for real-time news, backtesting and technical analysis.
Of course, stock screening is also impossible on a phone, so you would want to select a great stock screener to use in conjunction with Robinhood.
Options Trading & Crypto Trading on Robinhood
If you thought stock technical and fundamental analysis is tough on a smartphone, then get ready for Options Trading.
With the huge selection of options trading strategies and the real requirement to be able to map each play out in term of risk and reward, you really need to have a strong graphical interface on a well-built application.
The power of Firstrade’s OptionsPlay web application as mentioned above cannot be easily replicated by current big screen competitors, nevermind on the small form factor screen of Robinhood.
Again for execution it probably works, but again you will need a third party software provider to fill in the gap.
However, as a relatively new contender to the brokerage business, Robinhood does still have issues with the availability of the service. I am sure they are working to iron these issues out, but you cannot expect an always available solution right now.
We’re currently experiencing degraded performance. We’re all focused on getting everything back to normal for you as soon as possible. Check here for updates: https://t.co/ZS733G6N1J
— Robinhood Support (@AskRobinhood) July 27, 2018
Customer Support, Research & Education – Robinhood
Robinhood has a host of raving fans and we must give credit where it is due, Robinhood are the first broker to start the free stock trading revolution. The fans love it because they buy into the idea that stock trading is now possible for everyone not just the rich. Take a look at this no doubt sponsored tweet.
— ashton kutcher (@aplusk) September 29, 2016
The problem is that, while this “stock trading is only for the rich” message plays on the emotions, the fact is for the past 20 years you never had to be rich to invest in stocks. As we know 52% of Americans already have money in the stock market, one cannot claim they are all rich. In fact, with the major stock brokerage houses hovering at $5 per trade this is hardly going to break the bank even for a low-income earner.
In terms of investor education, there is not really much of note available. As we know as serious investors, good research costs money and because Robinhood only makes money from people who want to use the gold service for margin trading, it cannot afford to offer any of the services offered by Firstrade, namely free access to Zacks Research, Morningstar Research & Ratings + Breifing.com.
Commission Free Stock Trading Review Closing Thoughts
While Robinhood was the pioneer of free stock trades and has a loyal following of supporters and customers, the impetus of the value offering has now dissolved with the move of Firstrade into this market.
In terms of free stock trades, both Firstrade and Robinhood are more or less equal. But it is not just about free trades.
When it comes to a powerful stock and options trading platform Firstrade is leagues ahead. When we think about research and customer support, Firstrade wins hands down.
Firstrade’s move is an industry disruptor and game changer.
Notes on the Review
Customer Satisfaction Score (Star Ratings)
The customer satisfaction score was compiled using the following methodology.
The Twitter Accounts of the Brokers was scanned back for the 1 year for any negative feedback from customers. Also, TrustPilot UK and USA were reviewed and any negative comments counted against the broker. These two sources of information were combined to provide the star rating you see below.
Partnerships & Special Bonus
Liberated Stock Trader has partnerships with most of the service providers in this review. This means if you find the review useful and purchase any of the services mentioned we will receive a small payment which goes towards funding the research and work we do.As a thank you for using our reviews and purchasing any of the services mentioned we would like to offer you a special bonus of the highly rated Liberated Stock Trader "How to Avoid the Next Stock Market Crash" eBook and Video Course worth $29.-. Simply contact us specifying which service you signed up for and we will send you your gift.
Hundreds of data points were collected during this review. Brokers change services, terms, and commissions on a regular basis. If you represent a Brokerage House or are a client and you spot an inaccuracy, please leave a comment or contact us here and we will endeavor to correct it.