moomoo review 2023

• 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.

Pros: Where moomoo stands out

Low commissions

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

Transfer-out fees

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.