What types of securities can I purchase through Firstrade?

You can purchase stocks, options, bonds, and mutual funds via Firstrade. We currently handle securities listed on the U.S. Markets/U.S. Exchanges.

  What types of orders does Firstrade accept?

Firstrade accepts most common types of orders including market, limit, stop and stop-limit, along with qualifiers such as good for 90 days, all or none, and many more.

  What should I do if I can't get online to place an order?

You can place orders through our registered brokers. Orders placed through a broker will be charged $19.95.

  Can I place an order via e-mail or fax?

No, not under any circumstances.

  Why wasn't my limit order executed when it traded at my limit?

In most cases this is a function of the bid and ask. The bid is the highest price a market maker (who is buying your stock) is prepared to pay at a particular time for security; the ask is the lowest price acceptable to the market maker (who is selling you the stock) of the same security. The difference between the bid and ask is called the spread which is the market makers profit. While you may see your stock trade at your limit price, it may be at the ask if you are trying to sell or at the bid if you are trying to buy, therefore your order may not be executed. Even if the stock is trading within the spread, you are not guaranteed an execution.

  Is there a fee to edit or cancel my order?

No, there is no fee associated with editing or canceling an order.

  Is there a fee to edit the remaining portion of a partially executed order?

Any order-editing will generate a new order, of which if executed, a separate commission charge will incur.

  What are your rules on IPO's?

Market orders to buy shares of an Initial Public Offering (IPO) during the first day of trading are generally not accepted by Firstrade. One of our securities trading rules is that only limit orders to buy IPO stock will generally be accepted on the day the IPO goes public. This restriction is put in place to protect our clients from receiving a price that is significantly higher than the price they expected to pay. When you consider buying a stock in the secondary market, which is going public that same day, placing a limit order will establish a buy price at the maximum you're willing to pay. Limit orders on a "hot" IPO stock reduce your risk of receiving an unexpected execution price and allow you to place an order at the price level you're most comfortable with when buying that stock. Although a limit order does not guarantee your order will be executed, placing a limit order does guarantee you will not pay a higher price than you expected. In addition to the policy referenced above, Firstrade requires that all orders to buy IPO shares during the first day of trading be accompanied by sufficient cash or cash equivalents in the brokerage account prior to placing that order. In other words, if you wish to buy a stock in the after-market, which is going public today, you must either have enough cash in your cash account or enough Available SMA (Available Funds) in your margin account to cover that particular purchase.

  Why is my account restricted?

Whenever a security is purchased, the appropriate funds must be received by Firstrade prior to the sale of the respective security. If the security is sold prior to receiving the appropriate funds (the credit from the sale does not apply), the account in which the purchase and sale of the security was executed will be restricted for 90 days under Regulation T of the Federal Reserve Board. A restricted account will not be allowed to initiate a debit balance for any reason. Buy orders will only be accepted if there are cleared funds within the account. The restriction will expire 90 calendar days after the date of the sell transaction. Clients who wish to place orders in a restricted account will have to speak to a broker to place an order; the online trading system will reject all orders placed in a restricted account. These orders will not be entitled to the online pricing schedule.

  My buy order was rejected for "insufficient funds." Why is that?

If you recently deposited a check or initiated an ACH transfer, please be advised that it takes additional business days to clear. The first $5,000.00 will be available after two business days for check deposits, or three business days for ACH transfers (Electronic Funds Transfer). If your deposit was greater than $5,000.00, the remainder of the funds will be available after an additional two business days. Very large deposits may require additional time to clear.

  My sell order was rejected for "insufficient holdings." The position is in my account, why did I get this error message?

The order was rejected because you were trying to sell the security out of your cash account when it resides in your margin account or vice versa. To sell the security, please be sure to check the Positions page to see which security resides in which account and make sure that you select the appropriate account type on the Trade screen when selling.

  My Positions screen says "Other" for security type, or my stock changed its name/symbol. How do I sell this position?

Typically with stocks that undergo a name change, a reverse split or stocks that get delisted, we have to exchange the old shares for the new shares with the transfer agent for that security. Sometimes this exchange with the transfer agent may take a couple of weeks. Unfortunately, there is nothing we can do to expedite this process.

  What happens if I sell a position with fractional shares?

Fractional share cannot be acquired or liquidated from the market. When liquidating an entire equity position, any remaining fractional share positions will be automatically sold at the same price as the full share order on the business day after the execution.

  What are Hard-to-Borrow Stocks and Fees and when are those fees charged?

When any stock is sold short, the shares must be located and borrowed by a clearing firm. When there is a large demand to short a stock relative to the number of shares outstanding, stocks can be classified as hard-to-borrow. The market forces that drive increased demand for a stock vary daily depending on the particular situation.

For this reason, the fees associated with hard-to-borrow stock can vary greatly as they are based on the amount of demand in the market each day. We suggest that if you wish to sell short hard-to-borrow stocks, please contact our Customer Service Group at 800-869-8800. We can help you locate the stock in question and notify you of the availability and current fees. Firstrade generally does not allow online short sales of stocks that are classified as hard-to-borrow.

Please Note: Some stocks will not appear as hard-to-borrow and are able to be sold through the platform, but still may incur hard-to-borrow fees. This occurs when a particular stock is able to be located and borrowed, however the limited availability of shares mandates a borrow fee. In these cases, the investor will incur fees each day that the stock requires a fee to be borrowed. The fees could also be levied long after the original short sale and could appear and disappear daily, depending upon the changing availability of the shares.

  Does Firstrade pass regulatory transaction fees to its customers?

Certain regulators impose transaction fees to cover their costs of regulating the brokerage industry. The fees are passed through to customers as part of normal transaction processing. These fees will appear as a line item on your trade confirmation as “FEES” or “TRANS FEE” or “OPTION FEE” depending on your transaction. Please click on the individual links for more details about each fee.

Under Section 31 of the Securities Exchange Act of 1934, U.S. national securities exchanges are obligated to pay transaction fees to the SEC based on the volume of securities that are sold on their markets. Exchange rules require their broker-dealer members to pay a share of these fees who, in turn, pass the responsibility of paying the fees to their customers. Only applies to sell transactions and appears on the trade confirmation as: “FEES”. More Information>>

As of February 25, 2021, the SEC Fee rate is $5.10 for every $1,000,000 in sale proceeds.

For example: if the SEC fee rate is $5.10 for every $1,000,000 in sale proceeds,
Sale Proceeds = $20,000, SEC fee rate = $0.0000051 ($5.10 per $1 million in sale proceeds)
Total SEC fee = $0.102 ($20,000 x $0.0000051 = $0.102)

Options Regulatory Fee (ORF)
This fee is a customer pass-through exchange fee for all options trades, both buys and sells. It is collected by The Options Clearing Corp on behalf of the U.S. options exchanges regardless of the exchange on which the transaction takes place. Applies to both buys and sells and appears on the trade confirmation as “OPTION FEE”.

As of September 1, 2021, the aggregate rate is $0.03215 per contract.

The ORF fee is composed of the following individual exchange's rates:
ExchangeRate Per Contract
NYSE AMEX$0.0055
NYSE ARCA$0.0055
NSDQ (NOM)$0.0020
MIAMI (MIAX)$0.0029
MIAX (EMLD)$0.0006
Combined Rate$0.0357

French Financial Transaction Tax (FTT)
This tax is charged on the purchase of certain French equities, including certain ADRs. More Information>>

  What is Wash Trading?

Wash trading is a process whereby a trader buys and sells a security for the express purpose of feeding misleading information to the market. In some situations, wash trades are executed by a trader and a broker who are colluding with each other, and other times wash trades are executed by investors acting as both the buyer and the seller of the security. Wash trading is illegal under U.S. law, and the IRS bars taxpayers from deducting losses that result from wash trades from their taxable income.

  What is Trade Concentration?

Trade concentration is when a single trader generates a significant portion of all overall prints from one side of the market in an attempt to push prices higher or lower.

  What is illiquid stocks?

A stock is considered illiquid when the investor cannot easily liquidate the investments held. In other words, with illiquid stocks, buyers or sellers are not readily available. It is important to know about illiquid stocks because they are traded on an exchange. Owning a position in an illiquid stock means that shedding your exposure will come at a price far less favorable.

There is also a greater risk involved due to lack of transparency and regulatory oversight. While some illiquid stocks can be traded on an exchange such as NASDAQ, you can also find such stocks trading over the counter.

Factors common to illiquid stocks

The common underlying factors with illiquid stocks (including penny stocks) are:

  • low trading volumes
  • Price tends to move drastically
  • Wide bid and ask spreads

High risk factors

  • In case of penny stocks, company disclosures are limited
  • Illiquid stocks and penny stocks also tend to often fall under the regulator scrutiny. Sudden delisting is another scenario common to illiquid stocks. They are also susceptible to Price Manipulation, including Pump and Dump practice; these are all unlawful fraudulent market practices. Apply caution.
  What Is Market Manipulation?

Market manipulation is intentional deception by stock brokers, traders, analyst or bankers in an attempt to misrepresent or alter market prices. Market manipulation is illegal in most countries; in the United States, it's outlawed under the Securities Exchange Act of 1934.

Types of Market Manipulation
Market manipulation comes in many shapes and sizes. The following are a few examples.

  • Wash trading – Buying and selling the same security, at the same time and at the exact same price
  • Cornering – Excessive purchase of a certain stock, commodity, or other asset in order to gain control and impact the market price
  • Insider trading – Buying or selling on non-public information
  • Churning - An attempt by a stock broker to increase activity in a client's account to boost commissions by buying and selling orders at the same price. This activity is intended to drive up the price and attract other investors.
  • Ramping - Creating trading activities or rumors intended to drive the price up or down

  Trading Alerts & Trading Due Diligence Questionnaire

When a possible market manipulation activity is detected by Firstrade’s Trading Surveillance System, we will send the trading alert email to customers. Some trading activities may require customers to fill out a Trading Due Diligence Questionnaire. Multiple trading alerts detected or failed to complete the questionnaire may result in account trading restriction.

  What is Free Riding?

Also known as freeriding or free-riding is a term used in stock-trading to describe the practice of buying and selling shares or other securities without actually having the capital to cover the trade. In a cash account, a free riding violation occurs when the investor sells a stock before fully paying for the purchase of the stock.

The Federal Reserve Board's Regulation T requires brokers/broker dealers to "freeze" accounts that commit freeriding violations for 90 days. Accounts with this restriction can still trade but cannot purchase stocks with unsettled sale proceeds (stocks take two business days to settle). Freeriding can be avoided by using a margin account.

When an account conducted free riding violation, any gains from the trading activities should not be realized due to purchase of securities is not fully paid for. Therefore, the trades may be cancelled and no withdrawal is allowed.

  Can I trade warrants or rights?

Firstrade no longer accept buy orders in listed warrants and rights; liquidation of current holdings in these securities can still be done online or via phone.

  Why is the OPG order execution price different from the opening price?

OPG orders are executed based on the official opening price at the primary listing exchange. Any unfilled orders after the opening will be cancelled.

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