If you’re interested in commission-free trading, there are many platforms to choose from. One of the first to adopt a free trading model was Robinhood, but how does it compare to newer platforms in the industry?
Here we’ll make a Moomoo vs. Robinhood comparison to help you decide which platform is best for you.
Moomoo vs. Robinhood Overview
The main difference between Moomoo and Robinhood involves the available tools. Robinhood takes a simplified approach. This makes the app easy to use but provides users with very little data for research and analysis.
Moomoo, on the other hand, provides users with a robust set of tools to analyze potential investments. High-volume and technical traders will appreciate everything Moomoo offers, but new traders may find it’s not as simple or straightforward as Robinhood.
The Moomoo Basics
Moomoo has only been around since 2019, but it’s a wholly-owned subsidiary of Futu Holdings Ltd (FUTU on Nasdaq). This platform offers commission-free trading on stocks, options, and exchange-traded funds (ETFs).
One unique aspect of Moomoo is the opportunity to trade ADRs (American Depository Receipts). This is a way to invest in foreign companies without going through a foreign stock exchange. Moomoo also allows users to trade stocks on the Hong Kong Stock Exchange, in addition to the U.S stock exchanges.
The Moomoo platform has several innovative trading tools to help you identify potential trades, including AI market monitors and advanced charting, with customized alerts so that you can monitor price changes. The platform also has profit and loss analysis tools, free Level 2 market data, extended trading hours, and an excellent education section with various trading and financial resources.
- Charting and Technical Data: Moomoo has capital flow trends and financial reports for companies, so you can obtain a more detailed view of specific companies you may be interested in. The charting options include a bar, line, mountain line, candlestick, and other technical indicators.
- Access to Asian Markets: The Moomoo platform allows you to also trade on the Hong Kong Stock Exchange and China A-Shares.
- Third-Party Ratings: Moomoo has an integrated rating feature with data from various professional third-party researchers. This may be helpful when you want to compare different stocks to verify your buying or selling decisions.
- Customized Smart Reminders: You can set the app to generate auto notifications or alerts if any movements or price changes affect the stocks you’re watching.
- Level 2 Market Data: Moomoo offers free Level 2 Market Data, usually a paid-for extra or part of a subscription model with most platforms. This allows you to access real-time quotes and short-selling data.
- The Community: This is becoming a more common feature on trading platforms, but the Moomoo community has abundant active users, sharing insights and providing opinions on trades and trade strategies. This is an excellent resource for newbies, but more experienced traders may also appreciate the community interaction.
- Margin Trading: Moomoo offers access to trading on margin.
- Paper Trading: Gain experience or test your trading strategies without financial risk by trading with pretend money.
The Robinhood Basics
Robinhood is considered a major disruptive force within the brokerage industry. It was the first platform to offer a commission-free trading structure, forcing established brokerages to reassess their fees and prices.
Since it was established in 2013, many platforms, apps, and brokerages have emulated this strategy and eliminated their trading commissions. While this had the potential to neutralize the brand’s competitive edge, Robinhood has garnered strong brand recognition and created a niche for investors who prefer an intuitive, clean platform with no frills.
With Robinhood, you can enjoy commission-free trading of stocks, options, and ETFs. The platform also facilitates fractional shares and offers limited exposure to crypto trading. Like Moomoo, Robinhood offers extended trading hours, but it is only until 6:00 pm (Moomoo offers extended hours until 8:00 pm).
- Cash Management Products: Unlike Moomoo, which is solely a trading platform, Robinhood has expanded into cash management products. With this platform, you can get a debit card and earn cash back on your everyday purchases. The uninvested cash in your account earns interest. Additionally, you’ll have a routing number to send money to your cash management account directly or receive direct deposits.
- Robinhood Gold: While the main Robinhood platform is free of charge, you can upgrade to a Robinhood Gold membership, which comes with some nice perks. This subscription costs $5 per month but provides access to trading on margin, higher instant deposit amounts, and more in-depth research resources.
- Fractional Shares: Whether you have a limited investment fund or simply want to ensure every dollar is put to work, fractional shares can help. It allows you to buy portions of full shares, so you can buy $100 of a particular share, rather than five shares at $19 and leaving $5 cash in your account. It’s also an excellent option for higher-priced shares, which can often run to thousands of dollars per share. So, even with a modest fund, you can still access higher-profile brands and companies.
Moomoo vs. Robinhood: Similarities and Differences
While it is easy to assume that all commission-free trading platforms are the same, you should be aware of some key similarities and differences between Moomoo and Robinhood.
- Registrations and Memberships: Both Moomoo and Robinhood are registered with FINRA (the Financial Industry Regulatory Authority) and carry SIPC (Securities Investor Protection Corp) insurance.
- Commission Free Trading: Both platforms offer commission-free trading on ETFs, stocks, and options, making trading more accessible. Although Robinhood is quite basic and more suited to beginners, advanced traders can easily use the platform. With its research and charting features, Moomoo may be better suited to intermediate or experienced traders.
- Extended Hours Trading: Both Moomoo and Robinhood offer extended hours trading, but Moomoo’s hours are more extensive. This could be an essential feature if you want to make trades based on information you’ve found before the market opens or after it closes.
- Fully Functioning Apps with Research Tools: Both platforms have apps available for Android and Apple devices that allow quick and relatively easy trading and access to research tools.
- Crypto: Robinhood offers access to cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and Dogecoin. If you want to trade crypto or diversify your portfolio, this is an essential difference between the platforms.
- Options Contract Fees: Although neither platform charges a commission for trading options, there is a per-contract fee with Moomoo. This is not the case with Robinhood and is another crucial difference if options are an integral part of your investment strategies.
- Analysis and Trading Tools: Robinhood has some decent analysis and trading tools, but they are very basic compared to Moomoo’s more advanced offerings. These tools can be beneficial if you’re trying to determine an effective strategy. Additionally, Moomoo compares asset prices across exchanges so that you can find the best prices. Also, there’s an advanced stock screener to help identify ideas for potential investments. You will also gain access to Level 2 data free of charge.
- Pre IPO Company Access: If you’re interested in pre-IPO’s, Robinhood does offer this as a trading choice. Purchasing shares before an initial public offering may have additional risks, but there are some significant potential advantages. However, there are no guarantees that your order will be filled; these are only limit orders, so you may not get an execution.
- Cash Management: Moomoo focuses solely on trading and investments, so there are no cash management options. However, Robinhood offers additional services and products. As we touched on above, the Cash Management account has an associated debit card offering cash back, and the account is interest-bearing. You’ll also have FDIC insurance for uninvested funds up to a $500,000 cap.
- Paper Trading: Moomoo offers paper trading (simulated trading) while Robinhood does not.
Pricing and Fees
Both platforms offer commission-free trading, so there’s no additional charge when you trade stocks, ETFs, and ADRs. Options trading is also commission free, but with Moomoo, there’s a per-contract fee.
The key difference in the pricing and fees in the Moomoo vs. Robinhood comparison is for margin trading. Moomoo has a flat commission rate on all margin accounts. On the other hand, if you want to trade on margin with Robinhood, you’ll need to upgrade to Gold membership. This is a subscription that costs $5 per month. However, it does include a $1,000 margin. If you go above this level, the margin is nominal.
Moomoo offers multiple customer support options. Support reps are available by phone and online chat 24 hours on trading days and from 8:30 am to 4:30 pm ET on non-trading days. You can also email customer support at any time. Response time for email support varies, but generally, you’ll receive a response within one business day.
Robinhood offers phone support 24 hours a day, seven days a week. To get help by phone, you can request a call from inside the Robinhood app. You’ll get a notification when you’re next in line, and then you’ll get a call from a Robinhood support team member. Support is also available 24/7 via online chat.
Both platforms have Help Centers with answers to frequently asked questions, which may provide a solution without submitting an inquiry.
The application process to open a Moomoo account is simple and easy. You can complete the form in a matter of minutes. After you provide your personal and required financial information, you’ll need to confirm your agreement to the Moomoo risk statement and submit your application. The Moomoo team will review your application, and you can expect an approval decision within three business days.
It’s important to note that once you have your account, you may find the Moomoo platform a little intimidating, particularly if you’re a newbie trader. Moomoo has a wide variety of charting tools and resources. This is an excellent feature if you want to perform in-depth market research, but casual investors may need to spend some time familiarizing themselves with the functions and features.
Robinhood has been founded on making investing as easy as possible, so it has taken measures to streamline its desktop and mobile platforms. Opening an account is simple and intuitive, and once you’re logged in, you should be able to easily find account documents that are clearly labeled.
Robinhood also has some unique features that will be helpful to new investors placing their first orders. For example, you’ll see short explanations of how each type of order works and how choosing one type of order may influence what you pay. This will help newbies to learn how each order type can vary.
If you’re a more experienced trader or are tech-savvy, you should find the Moomoo-enhanced catalog of tools exciting and valuable. On the other hand, if you want a straightforward, no-frills platform, Robinhood is likely to be the better option. It has a simple interface with which anyone can get to grips in only an hour or two.
There’s no clear-cut winner to the Moomoo vs. Robinhood comparison. It’s impossible to say whether one is better than the other, as both platforms will likely appeal to different investors.
If you’re a newbie or casual investor or just want an easy way to buy and sell stocks, the easy-to-understand and straightforward Robinhood platform should be a good fit.
However, if you’re a more active or experienced trader, you may find Robinhood’s lack of advanced tools frustrating. Robinhood doesn’t have comprehensive charting or Level 2 market data with the basic account. These features are available with Moomoo, along with some superb educational resources.
If you’re still unsure which is best for you, it is well worth taking a little time to consider what you are looking for in your platform. If you just want to buy and sell and access better research tools, think Moomoo. But if you want cash management and other services and products, Robinhood is worthy of serious consideration.