Moomoo is a new online trading platform that offers commission-free trading on US stocks, ETFs, and options, along with robust analysis and trading tools.
Moomoo also offers clients access to China A-shares and Hong Kong-listed stocks.
In addition to commission-free trading on these US markets, moomoo offers competitive margin rates and pays some of the highest interest rates in the industry on uninvested cash balances, making it a viable choice for US stock, ETF, and options traders.
Is Moomoo Legit?
Moomoo is a legit company. Founded in 2018 in Palo Alto, California, Moomoo is regulated by the Securities and Exchange Commission (SEC) in the United States and is a full member of the Financial Industry Regulatory Authority (FINRA) and SIPC.
The company is also regulated by major securities regulators in other countries where it does business. The company has $8 billion in assets on its platform and over 21 million users.
Moomoo Advantages
The brokerage industry was rocked a few years ago when the standard price for stock and ETF trading plummeted to zero.
Now, that pricing structure is the norm for US brokers. However, new entrant moomoo has risen above the competition and is offering commission-free trading on US stocks and exchange-listed funds.
This puts the brokerage firm in good company alongside industry heavyweights like Fidelity Investments and Charles Schwab.
The brokerage also upped its game by lowering its per-contract fee for options from a competitive $0.65 to a market-leading $0 in 2023, putting it on par with SoFi Active Investing, Robinhood, and Firstrade.
This is a bold move for a new company, and options traders will love the price and the potential to save a significant amount of money.
Fast Screen and Level II Data
Moomoo gives traders the ability to quickly see the most active stocks or the biggest moves, and quickly switch between winners and losers across multiple markets, including the US, China, Hong Kong, Singapore, Japan, and Australia.
For more insight, you can quickly search for stocks that are performing well by exchange, such as the New York Stock Exchange or the US Nasdaq.
You can also filter for stocks that meet certain financial or technical criteria, then save them to your watchlist for later viewing. Here you can filter for US, Hong Kong, and China stocks.
When trading, moomoo provides free, real-time Level II data from the Nasdaq, helping traders make smarter decisions about the market depth of individual stocks.
This is a useful add-on for active traders and is available to all moomoo customers with an approved account.
Access to China A-shares and Hong Kong markets
In addition to access to the US markets, moomoo also allows you to trade in the Hong Kong stock market and buy and sell China A-shares.
This is one of the most unique benefits of a moomoo account. China A-shares are a class of shares of mainland Chinese companies traded on the Shanghai Stock Exchange or Shenzhen Stock Exchange and are traded in Renminbi.
They are generally difficult for non-Chinese investors to access.
For A-share fees, moomoo charges the higher of 0.03% of the trade value or 3 Renminbi (approximately $0.40) plus 15 Renminbi (approximately $2.10) per order as a platform fee.
However, other regulatory fees may also apply where appropriate. However, traders cannot short A-shares or participate in A-share IPOs.
The fee structure for Hong Kong stocks is similar. A fee of 0.03% of the trade value, a minimum of HK$3 (about $0.40) and a platform fee of HK$15 (about $1.90) per order.
Access to A-shares is an unusual feature for a major US online brokerage, but you’ll want to know what you’re getting into before trading shares of foreign companies that don’t have the same disclosure requirements as US companies.
Above-average margin rates
Moomoo offers at least relatively more attractive margin rates (the cost of borrowing the brokerage’s funds against the equity of your account).
As of December 2023, the brokerage charges 6.8%, which is competitive with industry leaders such as Interactive Brokers and M1 Finance.
Moomoo is definitely lower than its main competitors, as many brokerages have increased their margin rates to 10% or more due to higher interest rates.
The lowest margin rates apply to Hong Kong and US stocks, while China A-shares have a margin rate of 8.8% as of December 2023.
However, these rates are subject to change as interest rates fluctuate, so traders should keep an eye on them if they use margin extensively.
Competitive rates on cash
Moomoo has certainly been aggressive in attracting new customers, with a headline rate of 5.1% (as of December 2023) on cash held in accounts.
What’s more, customers only have to clear a minimal hurdle to get it. This high rate is available to all new users, while existing users must either deposit at least $500 or refer a friend who deposits at least $100 to qualify.
Otherwise, existing customers will receive a token rate of 0.03%. Cash can be used for trading at any time.
Cash in your account is also covered by the FDIC, with this broker offering up to $1 million in coverage. So you’ll get a lot of protection for your money here.
As interest rates fall, your cash balance percentage is likely to decline, so if this cash sweep is your primary feature, you’ll want to keep an eye on what’s offered here.
Moomoo Disadvantages
Limited Account Types
If you’re looking to open just about any account type here, you’re out of luck.
Moomoo only offers individual taxable accounts, so there are no joint accounts, IRAs, 529s, or anything else. They always offer individual accounts, so if you need something else, this lack is a deal-breaker.
Compare this to the best brokerages that offer 7 or more account types. Even Robinhood, which has offered only individual taxable accounts for years, has recently stepped up its game to include IRAs.
Limited Securities Available
The selection of securities available to trade at moomoo is limited, but the brokerage covers some of the most popular types, including stocks, ETFs, and options.
This gives most traders plenty of room to maneuver, but long-term buy-and-hold investors may regret the lack of mutual funds or bonds in Moomoo’s stable of funds.
Of course, since there are no mutual funds, Moomoo does not offer commission-free mutual funds, a popular choice among many brokerages.
If you need mutual funds or other more exotic securities (such as futures or forex), you should look elsewhere, such as Interactive Brokers, which offers much more exotic securities and extensive access to foreign markets.
That said, Moomoo does offer access to China A-shares, as mentioned above, which is a rare feature in the retail brokerage market.
Transfer Fees
Moomoo charges a transfer fee that is somewhat standard in the industry.
It costs $75 to transfer a stock position. While this is a standard price, it is not that difficult to avoid this fee if you work with other providers, as some of the best brokers will actually transfer your account without a transfer fee.
Conclusion
Traders looking for a low-cost platform for trading stocks, ETFs and options should look into moomoo. This brokerage platform offers commission-free trading in all of these markets.
The platform is intuitive and easy to use, and customer preferences are consistently reflected across the platform.
While you cannot route your own orders, the actual execution is done by Futu Clearing Inc., an indirect wholly owned subsidiary of Futu Holdings Ltd.
With accounts that have automatic sweeps that pay 8.1% interest on excess cash and below-average margin rates, moomoo is a strong new entrant for online brokers looking to attract active traders having a 3.6 rating on Trustpilot.
FAQ
What is moomoo?
Moomoo is an online trading and investment platform that offers commission-free trading in the US stock, ETF and options markets.
Moomoo has over 21 million users in the US, Canada, Japan, Australia, Singapore, Hong Kong and Malaysia.
Who owns Moomoo?
Moomoo is owned by Futu Holdings Ltd, a U.S.-based company, and is publicly traded on the NASDAQ exchange under the stock symbol FUTU. The company is headquartered in Palo Alto, California, and also has an office in Jersey City, New Jersey.
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