moomoo review 2023
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moomoo: Best for
- Low commissions
- Individual traders
- Chinese stocks
Moomoo is a newer entrant into the U.S. discount brokerage industry, and is owned by a Chinese parent company. That ownership structure shows through in some features of the brokerage’s services, such as access to the Hong Kong stock market and China A-shares, both unusual features for American brokers. Of course, you’ll be able to trade U.S. stocks and ETFs, and can do so with no commissions, and options trades are priced competitively, too. And moomoo is definitely angling for traders with its better-than-average rates for margin loans. However, long-term investors may find the lack of account types, no mutual funds and no fractional shares as significant drawbacks to opening an account at moomoo.
Those looking to be investors rather than traders have a number of brokerages that can remedy some of the omissions here, including Charles Schwab, E-Trade and Merrill Edge. Those looking for more of a trader’s experience should check out Interactive Brokers and TradeStation.
moomoo: In the details
Pros: Where moomoo stands out
The brokerage world was rocked a few years ago when the standard price for stock and ETF trades plummeted to zero. Now, that pricing structure is table stakes for American brokerages. But the newer entrant moomoo was not cowed by the stiff competition, and offers no-fee trading on stocks and exchange-traded funds. That puts the brokerage in good company, along with industry stalwarts such as Fidelity Investments and Charles Schwab.
The brokerage also provides a competitive fee structure for options trading, coming in right at the industry standard of $0.65 per options contract. That’s right in line with Fidelity and Schwab again, though just a bit above the hard-charging Ally Invest.
Quick screens and Level II data
Moomoo provides traders quick views of the most active stocks or the biggest movers, and allows you to quickly shift between winners and losers across several markets, including the U.S., China, Hong Kong, Singapore, Japan and Australia. If you want to break things down even further, you can quickly search for high-performing stocks by exchange, such as the New York Stock Exchange or Nasdaq in the U.S.
You can screen for stocks meeting certain financial or technical criteria, and then store them on a watchlist for later. You’ll be able to screen U.S., Hong Kong and Chinese stocks here.
When it’s time to trade, moomoo offers free real-time Level II data from Nasdaq, helping traders make smarter decisions about the depth of the markets for individual stocks. It’s a nice add-on feature for traders looking to trade actively, and it’s available to all moomoo clients with an approved account.
Access to China A-shares and Hong Kong markets
Besides access to U.S. markets, moomoo also lets you trade in the Hong Kong stock market as well as buy and sell China A-shares — one of the most unusual benefits of an account with moomoo. China A-shares are a share class of stocks of mainland Chinese companies that trade on either the Shanghai Stock Exchange or the Shenzhen Stock Exchange, and are quoted in renminbi. They’ve typically been difficult to access for non-Chinese investors.
For A-share commissions, moomoo charges 0.03 percent of the trade value, or three renminbi (about $0.50), whichever is higher. However, other regulatory fees may also be levied, as appropriate. Traders won’t be able to short-sell A-shares nor will they be able to participate in IPOs on A-shares, however.
Access to A-shares is an atypical feature at major U.S. online brokerage firms, though you’ll want to know what you’re doing before trading stock in foreign companies without the same disclosure requirements as American companies.
Better-than-average margin rates
Moomoo offers margin rates – the cost of borrowing the brokerage’s money against the equity in your account – that are on the more attractive side, at least relatively. As of January 2023, the broker charges 6.8 percent, a figure that’s much lower than all but the best brokers in this area, such as Interactive Brokers or M1 Finance. With higher interest rates, many brokerages have boosted their margin rates well above 10 percent, so moomoo is solidly below major rivals.
Its lowest margin rates apply to Hong Kong stocks and U.S. stocks, while China A-shares are margined at 8.8 percent, as of January 2023. Those rates will shift as interest rates rise and fall, however, so traders need to keep an eye on them if they’re using margin extensively.
Cons: Where moomoo could improve
Hold on to your wallet – moomoo charges what can only be described as a whopping transfer-out fee that has no equal among American online brokerages: a $75 per stock per transaction fee. That is, if you want to transfer two positions, it will cost $150, and the fees rise from there, with no maximum. This fee discourages anyone from ever transferring more than a few stocks, let alone a whole portfolio. And it could often be wiser to simply liquidate your positions and transfer the cash instead since ACH transfers are processed for free.
In contrast, the average brokerage charges $75 for transferring a whole portfolio, while the best brokerages actually will transfer your account for free.
Limited account types
If you’re hoping to open almost any account type here, you’re out of luck. Moomoo offers only an individual taxable account, so no joint accounts, no IRAs, no 529s or anything else. It’s all individual accounts all the time here. So if you need any other type, this lack is a deal-breaker.
Contrast this against top brokerages offering seven or more account types. Even Robinhood, which for years offered just individual taxable accounts, has recently upped its game to include IRAs.
Limited tradable securities
The selection of tradable securities is also limited at moomoo, though the brokerage does cover some of the most popular types, including stocks, ETFs and options. That will give most traders plenty of room to operate, though long-term buy-and-hold investors may regret the lack of mutual funds or even bonds in moomoo’s stable. Of course, without any mutual funds, moomoo doesn’t offer any no-transaction-fee mutual funds, a popular choice at many brokerages.
If mutual funds or other more exotic securities (futures or forex, for example) are a requirement, you’ll need to look elsewhere, such as Interactive Brokers, which can bring even more unusual securities to the table as well as extensive access to foreign markets.
That said, moomoo does offer access to China A-shares as noted above, a rare feature in the retail brokerage market.
No fractional shares
Since moomoo is geared much more toward trading than investing, it may not be so surprising that it doesn’t offer the ability to invest in fractional shares, either via purchases or dividend reinvestment. Fractional shares allow you to get all your money invested in your stocks or ETFs, while fractional reinvestment lets you put your whole dividend in shares of the company. It’s a popular choice for newer investors who want to get their money compounding even faster.
The best brokers for fractional shares offer both types of fractional shares, but surprisingly few brokers actually offer fractional shares on both kinds of transactions.
Firstrade4.0 Bankrate Score
Firstrade is a solid brokerage offering that may particularly appeal to options traders because of its commission-free options trades. You’ll also get access to quality research and its mobile app, but mutual fund investors may be disappointed by the small number of no-transaction fee funds available.
TD Ameritrade4.5 Bankrate Score
TD Ameritrade still offers strong platforms and a range of research for its clients, making it a very solid pick for more advanced traders, even as it is about to merge with Charles Schwab. A wide range of tradable securities and plenty of commission-free mutual funds make this broker interesting for both new and advanced traders, as do the competitive commissions.
WellsTrade2.5 Bankrate Score
WellsTrade handles most of the basics well and could be a good fit for existing Wells Fargo customers looking to consolidate accounts in one place. However, active traders should likely look elsewhere for their brokerage needs due to high options costs and a barebones trading platform.
J.P. Morgan Self-Directed Investing3.0 Bankrate Score
J.P Morgan’s Self-Directed Investing platform is a good fit for existing Chase customers who are looking for a low-cost way to trade stocks, ETFs and mutual funds while getting access to the bank’s easy-to-use mobile app. However, only a few account types are offered and If you’re looking to trade forex, futures or crypto, you’ll need to look elsewhere.
Interactive Brokers5.0 Bankrate Score
Interactive Brokers keeps adding new features and improving its offerings year after year, and now has new mobile apps to pair with long-time strengths such as its wide number of tradable securities and access to global markets. Low margin rates, high interest rates on cash balances, and a leading number of no-transaction-fee mutual funds serve to make this broker a top pick.
E*Trade4.5 Bankrate Score
E-Trade is likely to be a suitable broker choice for many investors who will appreciate its low trading costs, high-quality research and education, and 24/7 access to customer service. However, if you’re starting small and looking to trade fractional shares, you’ll need to find a different option.
Merrill Edge4.5 Bankrate Score
Merrill Edge brings strong research and education to the investing space, offering a solid trading platform for stocks, bonds, options and funds. You’ll likely find some extra things to love here if you’re already a customer of parent Bank of America, with 24/7 phone support and in-branch service potentially making that relationship even more meaningful to clients.
Fidelity5.0 Bankrate Score
Fidelity Investments is back again with another blowout performance in Bankrate’s reviews. This broker seems to do it all right, from low costs to plenty of research to mutual funds to prompt and courteous customer service. And with so much under the Fidelity roof – banking, credit cards and more – you could capably run your financial life here.
Charles Schwab5.0 Bankrate Score
Charles Schwab is a great all-around broker, whether you’re just getting started investing or are more advanced, and it can bring the heat on almost anything you’re likely to need. Add on strong customer support, a wide investment selection, no-commission mutual funds, and tons of research, and you have the makings of a five-star broker.
Webull4.0 Bankrate Score
Webull offers a lot that investors will like such as commission-free trading, fractional shares and a slick mobile app that allows you to trade on the go or keep tabs on your favorite stocks. But only a few account types are offered and you won’t find the level of research that is available through other brokers.
Robinhood3.5 Bankrate Score
Robinhood has taken its game up a notch or two, pairing its traditional no-cost trading with new IRA accounts (and a special bonus match for clients) as well as improvements in customer service, including 24/7 chat. The mobile app remains an attractive place for options traders but is a no-go for those looking for mutual funds or a wide range of account types.
Vanguard3.0 Bankrate Score
Vanguard’s brokerage offering can handle the basics well and may be a good fit for long-term fund investors. But more active traders will be disappointed by the basic trading platform and high commissions for options trading.
TradeStation3.5 Bankrate Score
TradeStation’s brokerage offering is likely to suit active traders better than it does new investors or those just looking to save for retirement. Customers will get an advanced trading platform with low commissions, but you won’t find fractional shares and the mutual fund offering is limited.
SoFi Active Investing3.0 Bankrate Score
SoFi Active Investing is a low-cost broker that should meet the needs of new investors looking to only trade stocks and ETFs. More experienced investors may be disappointed by the lack of options or mutual fund trading and a limited research offering.
moomoo3.0 Bankrate Score
Moomoo joins a crowded field of discount brokerages with an appeal to individual traders, offering some atypical features, including access to U.S., Hong Kong and Chinese markets. Competitive pricing on stocks, ETFs and options will prove welcome with traders, though others may find the lack of account types, limited available securities and high transfer fees off-putting.
Zacks Trade3.5 Bankrate Score
Zacks Trade is a broker that should appeal to active traders with its advanced trading platform and ample research offering. New investors may be turned off by the high account minimum and fees for mutual fund trades.
Lightspeed3.0 Bankrate Score
Lightspeed is all about active traders who can deliver volume to the broker, and so everything is optimized around making the experience the best for them. That means discounted prices for high-volume trades and multiple high-power trading platforms, but it also means no concern for eliminating the nickel-and-dime costs that other brokers routinely slash.
tastytrade3.5 Bankrate Score
Tastytrade offers some of the lowest commissions around, whether you’re trading stocks, options or even cryptocurrency – and it actually caps your commissions on the latter two. Traders should find a lot to like here, among the commissions, trading platform and the variety of trading securities on offer, though long-term investors may bemoan the lack of mutual funds.