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The recent “Zero Commission Forever” offers for US stocks by moomoo and Tiger Brokers represent a 0-25% cut in commissions charged by the two brokers, based on our calculations. However this is not a true “zero commission” offer because the platform fee, which is a trading commission for all practical purposes, kicks in after the promotional period (180 days for Tiger and 1 year for moomoo).
FX conversion spread is a much bigger component of your all-in trading cost for US stocks and both these brokers charge much higher FX spreads than Interactive Brokers, our pick for the best broker in Singapore. Therefore both these brokers are 2-10x more expensive for trading US stocks even during the promotional period and more afterwards.
They also offer promotional free share and market data access which is valuable but you can get these simply by opening an account and making a deposit, without actually trading. Between the two, moomoo offers a better deal in our opinion.
In recent days both moomoo and Tiger Brokers have launched “Zero Commission” promotions for trading US listed stocks. moomoo offers “Zero Commission on US Stocks FOREVER, FOR ALL*” while Tiger Brokers offers “Unlock lifetime zero commissions for unlimited trades on US stocks.”.
While they sound the same, the two promotions are very different. moomoo offers zero commissions to everyone forever, while Tiger only offers zero lifetime commissions if you refer a friend, who then deposits a minimum of S$100 in their account. Clearly Tiger has a much higher bar to clear for the zero commissions.
That leads to two questions: first, is zero commission really… zero commission? And second, is this big enough of a pricing change that you should switch your broker to either of the two?
Yes & No. Mostly no.
Both moomoo and Tiger will still charge a platform fee that is same as a commission in all practical ways. This platform fee is US$0.99 / trade for moomoo. For Tiger, this is US$0.005/share with a minimum of US$1.0 and a maximum of 0.5% of traded value.
As a part of the current promotion, Tiger is also waiving the platform fee for 180 days while moomoo is waiving it for a year.
For new customers who sign up during these promotional periods and meet the conditions, moomoo and Tiger actually do offer zero commission trading but it is likely that after the end of that period, you will have to pay a commission to trade on both the platforms.
After the promotional period, for orders larger than 200 shares, moomoo will be cheaper as Tiger charges the platform fee on a per share basis while moomoo is flat.
Again, no.
First, if you want to trade US stocks for zero commissions, TDAmeritrade has offered that for a long time. And they don’t charge a platform fee either. So you don’t have to worry about when your promotion expires.
But more importantly, as we showed in our piece on the Best Online Broker in Singapore, the bulk of the cost of trading US stocks on these platforms comes from exchanging your SG$ to US$, the FX conversion spread.
For a Buy & Hold investor, who invests S$50K in US stocks on either moomoo or Tiger, less than 20% of the total cost was the trading commissions (before this promotion) and more than 80% was FX conversion cost.
For an active trader, who turns over the entire portfolio 4x a year, 50-60% of the total cost was still FX conversion, before this promotion.
There is no discount in this promotion on the FX conversion cost – it remains unchanged.
In other words, this shift to “zero commissions” represents something between a 7-25% discount over previous all-in pricing, depending on you trading style, with more active traders benefiting more. Think evolution, not revolution.
Both moomoo and Tiger offer a number of other benefits, both for new sign-ups and existing users. These include vouchers, free Tesla / Apple / GoPro share and market data access.
In our view, the vouchers reduce the cost but the all-in cost still remains higher than what Interactive Brokers or TDAmeritrade charge.
The free share is a free share and the market data can be valuable depending on your trading style. moomoo for e.g. offers NYSE ArcaBook Level 2 access for free. This is available for US$11/month on Interactive Brokers.
However both these benefits don’t actually require you to trade on the platform. You simply need to open an account and transfer some funds for a while.
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A study shows IBKR has high trade execution costs for US Stocks. Its still cheaper than most other brokers for US and has the best data & tools. Its still the best broker in Singapore.
Webull offers true 0 commission trading (0 platform fee too) but has high spreads to convert FX. The App is very similar to moomoo / Tiger with less gamification.
Tiger Brokers has a full-featured gamified trading app but charges high FX conversion spreads.
