Moo Moo Trading – Is it worth trying for the low commission fees?

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If you have been an active trader in the US market, I’m pretty sure you have been targeted by moomoo’s ad – offering a very attractive ‘Welcome Bundle’ of 1 free Apple Share and 180-days commission-free trade* (Note: It is not 100% free, platform fee still applies but I’ll elaborate more below).

*Promotion is valid from 1 May – 30 June 2021, 1500hr SGT. More details below!

If I didn’t recall wrongly, their aggressive marketing campaign started back in January where you had to signup for their waitlist to be ‘entitled’ for that free apple share. I didn’t make it to the list back then, which was why I didn’t bother signing up after that. However, it seems that their campaign was so successful that they continued their promotion. It is now May 2021 and they are still giving out the free apple shares. Not sure when the promotion will end but this ‘gift’ worth USD $128 (Price of apple as of 6 May 21) is definitely the best welcome promotion I’ve seen from an online trading platform so far.

If you’re feeling skeptical about using a trading platform named after a cow, you’re not alone. I had my reservations about Tiger Brokers (possibly their closest competitor in Singapore right now) when I started, so I did my full research before I started. If you’re reading this, you’ll probably curious as well so let me share my findings with you.

What is moomoo trading?

Moomoo is the trading app owned by Futu Holdings Limited (FUTU). In Singapore, investment products and services on moomoo are offered by Futu Singapore Pte. Ltd. regulated by the Monetary Authority of Singapore (MAS). If ‘FUTU’ rings a bell, it is probably because you saw news/buzz about their crazy stock prices. FUTU is a legit company listed on NASDAQ (Since Mar 2019) and its stock price had been at US$43 on 31 Dec 2020, reached an all-time high of 500% at $204 in Feb 2021. In case you’re curious. the price is now US$136 and it seems like a good stock for some swing trading. In addition to FUTU being a listed company in US, FUTU SG is licensed and regulated by MAS which makes it somewhat more ‘trustworthy’ than many other crypto platforms I’ve heard of. To add on, one of their largest strategic investors is TENCENT and FUTU’s founder, Leaf Li, is the 18th founding member at TENCENT.

What is your risk?

If you trade via moomoo, you need to know that this is a custodian account which means that the stock you purchase will not be in your name. This is similar to other online brokerage companies too. If you need more info, you can read this article by Seedly: Difference between CDP and Custodian accounts

How cheap are the fees on moomoo?

[Note: Information below is accurate as of Apr 2021]

[For SGX – Prices below are in SGD]

Fees = Commission [(0.03% or min. $0.99 *Promotion: Waived for 90 days*) + Platform Fees (0.03% or min. $1.50) + Regulatory Fees (0.04%) ] * 1.07 (7% GST)

If you’re making a $1,000 trade on SGX, your fees would be [$1.5+$0.4]*1.07 = $2.03 effective 0.203% (promo price) or [$2.49 + $0.40]*1.07 = $3.09 effective 0.309% (non-promo price)

If you’re making a $10,000 trade on SGX, your fees would be [$10,000*(0.03+0.03+0.04)%]*1.07 = $10.70 effective 0.107% (non-promo price)

Tip: To fully maximise the % vs min. fees ratio, the ‘sweet spot’ is to do trades at a minimum of SGD $5,000 per order.

The closest competitor Tiger Brokers charge 0.04% for commission, 0.04% for platform fee (no min. fees *Promotion till 31 Dec 21*); and 0.04% for regulatory fees.
A $1,000 trade would cost $1.28 effective 0.128% (promo price) or $3.28 effective 3.28% (non-promo price) while a $10,000 trade would cost $12.80 effective 0.128% (non-promo price)

Just for comparison sake, min. fees for FSM is $10.70 per trade and $25 per trade for the traditional platforms (like iOCBC).

Findings: Long-term wise (without promotions), moomoo is cheaper in the long run with an effective 0.107% fees vs Tiger’s 0.128% fees. Short-term wise with Tiger’s no minimum fee promotion, it is relatively cheaper for trades less than $5,000.

[For US Market – Prices below are in USD]

Fees = Commission [($0.0049/share or min. $0.99 *Promotion: Waived for 180 days*) + Platform Fees ($0.005 or min. $1)] * 1.07 (7% GST)

For the first 180 days, moomoo trading fees would be cheaper as the $0.99 commission fee is waived. However, when the promotion ends, the comparison with Tiger Brokers is negligible as it is almost the same at min. $1.99 per trade. Would not do the detailed calculation for this.

How competitive are the exchange rates on moomoo?

Did a comparison table below for reference

How much USD do you get for 1,331 SGD?  SGD/USD
Xe.com 1,003.67
Tiger Brokers 1,000.31
Moomoo Trading 1,000.29

*Rates as at 10:31-34 PM, 26 Apr 2021

Findings: Tiger Brokers seem to have a slightly better exchange rate but the difference is rather minimal.

Moomoo has slightly more advanced functions are available

One thing I noticed about moomoo was that there were more trade options compared to Tiger. Apart from having the usual Limit / Market / Stop Loss / Stop-Loss Limit Order, moomoo has additional options which includes Limit if Touched, Market if Touched, Trailing Stop Limit and Trailing Stop. The additional options would definitely come in handy if you want to execute some complicated orders. The only downside is that it does not offer the buy/sell execution within the same order. Hopefully that would come some day.

How easy is it to use the App?

  1. The signup process is rather easy, you can sign up via my link here and use Singpass MyInfo to fill up the information seamlessly and my account got approved within 10 mins even though it was a Saturday. (Note: clients can sign up anytime, including weekends.)
    Alternatively, you can look for the moomoo trading app in Apple App / Google Play Store but I would be extra grateful if you use my signup link above.
  2. The fastest way to fund your account is to do an ‘Instant Deposit via DDA (Direct Debit Account)’ and it works for DBS/POSB bank.
    (Access from bottom menu > ‘Me’ > Brokerage Account > Deposit)
  3. There are no Withdrawal Fees as long as you are making a transfer via FAST. Please note that evidence of ownership of the bank account would be required for verification prior to the transfer. Would be good to do that verification early to ensure that you receive your cash earlier.
    (Access from bottom menu > ‘Me’ > Brokerage Account > Withdraw)
  4. The app seems relatively straightforward to me and most buttons are pretty intuitive. If you are afraid of pressing the wrong buttons, a tip is to try out paper trading (Access from the bottom menu ‘Me’ > ‘Paper Trading’)

How attractive are the signup benefits?

From 1 to 30 June 2021, 1500hr SGT, they are giving the following benefits once you deposit SGD 2,700 (USD 2,000 / HKD 16,000) within 30 days of sign-up.

  1. 1 Free Apple Share (worth about US$128)
    I got the share credited into my account within 2 working days. I didn’t have to perform any trades to enjoy this benefit.

  2. Unlimited Commission-free trading for 180 days in US/SG/HK Market
    You can save about 1 USD per trade (compared to Tiger) and I think it is very attractive when you make small trades.
    It helps to keep my commission percentage low.
  3. Level 2 Market Data for US Stocks
  4. SGX Securities Level 1 Real-Time Market Data

Please note that promotions are subjected to changes thus it would be good to scrutinise the T&C before you click on the ‘Claim Now’ button when you sign up.
Link to their Welcome benefit T&C for reference.

If you have finished the article and you’re convinced to signup, click on the button below:

Sign up Now

Disclaimer: Please note that this is a collaboration article with moomoo Singapore.

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