SIGN UP FOR $10 TO UNLOCK ALL ARTICLES! Since the implosion of the pandemic in 2020, the US stock market had witnessed a frenzy of trading activities among retail investors. The spike in retail trading was largely due to the volatility seen in the market. In addition, the pandemic had resulted in lockdowns in various global cities. This led to prevalent work-from-home trends among retail investors, who have more opportunities to trade from the comfort of their homes. The shift led to a proliferation of low-cost investment platforms like Robinhood. The latest one to arrive in Singapore is Moomoo Trading (Futu).
Recently, one of the long-time members of this blog requested for a review on Moomoo Trading (Futu) platform. I am more than happy to do a coverage on the platform as this is one of the privileges of being a member of this blog. If you are keen to ask for coverage on certain investment products or stocks, do sign up for SG Wealth Builder membership! I will try my best to do an objective and balanced review.
As this topic is requested by a blog member, I must put a disclaimer that this article is not sponsored nor reviewed by Moomoo Trading (Futu). In addition, I have not signed up for a Moomoo Trading (Futu) account. This is because I have signed up for a POEMS Cash Plus account in January 2021. So what this means is that this article is not written from the perspective of a user’s experience. Instead, I will attempt to offer an objective review of Moomoo Trading (Futu).
There are many reviews on Moomoo Trading (Futu) done by local financial bloggers. Nonetheless, it should be highlighted that most of them are either sponsored articles or referrer of Moomoo (the fintech player offers commission for people who refer investors to sign up Moomoo Trading (Futu)). In view of this, their articles could be biased because most of them only touch on the pros and benefits.
Lure of free stocks and near-instant account opening
Like many low-cost investment platforms, Moomoo Trading (Futu) offers free stocks for new sign ups. You can receive one Apple share if you opened a Moomoo Trading (Futu) account now. To qualify, you need to deposit $2,700 in your account and you will receive the following:
- a) 1 share of AAPL stock within 5 business days (limited to the first 10,000 redemptions. First come, first served basis)
- b) SGD 30 Cash Coupon within 5 business days
- c) Free OPRA Option Real-time Quotes for US market,
Based on the positive experiences of other financial bloggers, it seems that opening an account with Moomoo Trading (Futu) is also a breeze, with one user claiming that it takes only 2 minutes to sign up for the brokerage account (the process can be expedited if you choose to use Myinfo to sign up).
The idea behind the offering of free stocks, near-instant account and generous referral program is basically a strategy by Futu in an attempt to go all out to gain market share in Singapore. Frankly, there is nothing inherently wrong to launch an all-out war against the incumbent market players. This is business and it’s a competitive world out there. What this platform is promoting is basically a fun and easy-to-use investing mobile app. These are the appealing factors that would attract new age retail investors to sign up for an investing app.
However, retail investors, especially the younger folks, must be clear of what they are signing up for. My biggest concern is that inexperienced investors may not be aware of the risks of margin trading, much less the sophisticated investment products that can be accessed through the platform (e.g. options).
The lack of safeguards could potentially lead to retail investors taking on excessive risks. Take for example, there is limited information on the margin account offered by Moomoo Trading (Futu). Under the “Account Types”, there is only one line stating “If you prefer not to use margin, there will be a very clear indication about it”. Under such circumstances, retail investors can easily overlook the fact that they are actually signing for a margin trading account.
Indeed, POEMS Cash Plus account is also a margin trading account like Moomoo Trading (Futu). However, my broker has assessed that my risk tolerance level is low. Thus, he has discouraged me from doing margin trading through Cash Plus. Instead, he suggested that I take advantage of the low commission fees in Cash Plus to buy and sell stocks (using cash). For Moomoo Trading (Futu), as the platform is catered for “DIY” investors, there are no trading representatives to assist in your trades. Henceforth, you are pretty much on your own if you are using low-cost DIY investment app like Moomoo Trading (Futu).
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