How to pick the best stock trading platform/broker?

More people are picking up on how to open stock trading accounts in Singapore with online platforms to do self-directed trading, where they learn how to start stock trading confidently and how to buy and sell stocks in an informed fashion, while keeping in mind factors that will affect their balance sheets such as stock broker fees. 

At the same time, many are casting their eyes on the US stock market in the online stock trading space to buy into leading stocks such as Tesla and Alphabet (hello, Silicon Valley), or even the S&P 500 market index, just to gain more exposure and diversification. 

So, what are some of the best Singapore stock brokers that will offer you access to the US stock market and the aforementioned stocks? From this list, how to start stock trading in Singapore by choosing the best stock trading platform that suits your needs? 

The US stock market is the largest in the world, with about 56% share of the total world equity market value. Key stock exchange operators in the US, namely NYSE and NASDAQ, have market capitalisation of listed companies worth US$24.4 trillion and US$20.87 trillion respectively.

Buying US stocks in Singapore is not without barriers. Apart from currency fluctuation risks (SGD to USD forex rates), there are additional costs involved, such as a 30% withholding tax on dividends, custodian fees, and the need to pay a fee (a very small percentage of the trade) to the US Securities & Exchange Commission.

First things first: How to start stock trading in Singapore and invest in the US stock market? In general, you’ll need to do the following:

• Open stock trading account in Singapore
• Fund your account
• Start investing in stocks or ETFs

We list down below the top 6 features to look out for that the best stock trading platforms in Singapore should have for you to start buying US stocks.

 

1. What tools and resources will level up your online stock trading know-how?

Seasoned investors aren’t magicians; there’s a sort of science that goes behind determining what stocks they choose, and how they time the market. It’s a whole bunch of knowledge, accumulated over the years, from experience and even past failures. These days, beginner traders have access to a wide range of tools that can make investing much easier. From simple tools that showcase the historical performance of a stock, to powerful algorithms that can help to predict market movements.

Choosing an online stock trading platform that allows you access to the following list of tools will help to make you a more informed, savvy investor:

• Option Profit and Loss (P&L) diagram — shows single and option combinations. Combined with stock, it helps users analyse the profit and loss strategies.
• Powerful drawing tools — help users discover trends and potential opportunities for their own investment strategy.
• Profit/Loss (P/L) analysis — provides P/L ranking and P/L for each stock.
• Smart reminders/conditional alerts — set up automatic notifications when conditions such as price movements, change in indicators and more are met

From the plethora of stock brokerages available on the market, the moomoo trading platform stands out with its whole suite of rich and in-depth, customisable analytical tools. For instance, the platform offers a powerful screener tool, which enables traders to hunt down investment targets that fit your investment strategy. It’s also customisable, which means you can input your criteria and discover stocks (screening from thousands of others). Seeing how vast the US stock market is, if you’re into picking stocks, this will really save you lots of time and effort.

Other tools include charts (candlestick, line, mountain line, bar) and various technical indicators such as Moving Average, Bollinger Bands, KDJ (random index) and so on. Users of moomoo are also able to view the trends in capital flowing in and out of companies.

 

2. Is your stock trading platform safe and secure?

Safety and security is a given, and a non-negotiable, especially since we are dealing with our real hard-earned money (and large amounts at that) for every trade. After all, the ultimate goal is to grow our money, and not lose it to hackers or to an unreliable platform.

Wonder how to come up with a checklist to assess if your stock trading platform is safe? Always check that the trading platform or app is licensed and regulated by MAS. If it is not licensed to operate here, be wary where you put your money. In addition, do some sleuthing about the trading platform or app, especially its parent company, investors, other company information, track record, and so on.

As mentioned, in Singapore, investment products and services on moomoo are offered by Futu SG, which is licensed and regulated by MAS. Furthermore, FUTU’s board of directors sport pretty impressive credentials. 

Although trading app moomoo is still relatively young here (it was launched in Singapore in March 2021), its parent company FUTU Holdings celebrated its 2nd year of being listed on NASDAQ during moomoo’s launch month in SG. Also, within 3 months since moomoo’s launch, an overwhelming 220,000 users with 100,000 paying clients in the Singapore market was recorded. This really shows the trading app’s popularity and a certain trust from Singapore investors. 

 

3. Are you getting competitive stock broker fees?

One of the biggest factors when choosing a trading app is the fees and charges. Just a 0.01% difference may not look like a lot on paper, but if you’re trading large amounts, this really adds up to a lot, and eats into any gains.

In addition, beginner investors looking to trade small volumes need to be aware of the minimum commission payable, as this could translate to a large percentage of their investment or profits with every trade.

Other fees and charges include the minimum funding requirement (might be too high for new traders to stomach), custodian fees (remember, there’s no Central Depository or CDP account in the US) and other hidden charges.

For a start, here’s a quick comparison of basic charges of 3 investment brokerages in Singapore: Futu SG (moomoo), Saxo and Interactive Brokers:

	Futu SG (moomoo)	Saxo	Interactive Brokers
Minimum commission fee (US stocks)	USD1.99 — USD0.0049 per share (minimum USD0.99 per order) + USD0.005 platform fee (minimum USD1 per order) = USD0.0099 per share	USD4 or 0.06% of trade, whichever is greater (for shares priced under USD10, USD0.01 per share; min. USD4, max. USD100)	USD0.005 per share (USD1 minimum)
Minimum funding amount	None	3,000 SGD	None
Inactivity fee	None	None	None
Account opening fee	None	None	None

Information accurate as at 16 July 2021

 

As you can see, Futu SG’s moomoo trading platform does well with its low commissions and does away with other charges such as the minimum funding amount, inactivity fee and account opening fee. In addition, moomoo has no custodian fee; you can also use its FUTU SG’s commission calculator to calculate before trading — a great tool for those new to buying US stocks. Take a look at their fee schedule as well.

 

4. Is the customer service prompt and good?

Of no lesser importance is the level of customer service rendered. You may be using an online trading app, but that doesn’t mean customer service becomes non-existent.

We’ve all had those moments where we call up a customer service hotline, only for our call to be redirected overseas… and we speak to someone in a thick accent, who barely understands our local issues. When we’re in a pinch, hearing someone use familiar colloquialisms such as “lah” and “lor” really brightens up our day, y’know?

Thus, to help its users along, moomoo provides 24-hour customer service within trading hours with an ever-present local team, integrated digital support, local language assistance, a learning centre and even a discussion forum for traders — both green and seasoned — to exchange ideas.

 

5. Is your platform providing any online stock trading news & insights?

Investors rely on world news to make informed trading decisions — and for those trading in an overseas market like the US, staying abreast of global developments is critical.

News (or even Tweets) such as the announcement of an IPO, a new technological breakthrough, the US elections, the stance of a company CEO etc can impact stock markets… even more than we can imagine.

Having access to news at their fingertips is important for any level of investor, especially  beginner traders who may not know where to look or have yet to establish their go-to news feeds. The moomoo trading platform provides access to 24/7 financial news to keep them abreast of the latest global updates and stock price fluctuation analyses.

In addition, users can also gain access to ratings and insights from several professional third-party researchers to help them make comparisons between stocks; and view intuitive graphs that show a more direct view of the company’s financial situation.

What perhaps is the moomoo platform’s key draw for a lot of investors is its in-app social forum. Users can stress test their investment ideas with fellow investors. They can do this via the unique discussion forums feature, where they can partake in discussions and share their trading insights with the global investment community of FUTU’s 15 million like-minded investors.

 

6. How to open stock trading accounts in Singapore and buy stocks with ease?

Last but not least, having a smooth account opening experience is another standout feature of a top stock trading app. To us, it’s an indication of how the rest of our stock trading journey could turn out, and also, the user experience of the app itself.

Why jump through hoops and go through the hassle of multiple paperwork? Already, with so many other things vying for our attention daily (like actually devoting energy to learning more about trading), traders don’t want to waste precious minutes to agonise over painful processes.

You need only download the moomoo trading app via the Google Play Store or the Apple App Store. To speed things up, you can register with your Facebook/Google account and use MyInfo. Account setup will be completed on the same day (or up to 3 business days).

Depositing money is also a breeze. When you’re logged in to the moomoo trading app, click on “Me” → “Deposit” → choose the correct currency under “Deposit Currency”. When making a transfer, use your personal Singapore bank account(s), and enter your moomoo ID accurately in the “Comments” field. The funds will be deposited in 1-3 business days.

If you need further guidance, moomoo’s YouTube channel provides you with step-by-step tutorials on account opening and more. 

From now until 10 August 2021, Learn-and-Earn with moomoo. Learn financial concepts and more, and get started on an investment journey with moomoo that is rewarding, social, interactive and accessible.

Learn-and-Earn with moomoo From 21 July to 10 August 2021, Futu Singapore (Futu SG) — behind the trading platform moomoo — is also running a Learn-and-Earn initiative with the hope to beef up (geddit?) the financial literacy of the Singapore public.  Whether you are new to investing or already a seasoned one, you can test their investing knowledge (e.g. what are REITS, ETFs or IPOs, anyone?) with daily quizzes during the campaign period. Each correct answer will give you a sure-win gachapon chance and you can win cash coupons of varying amounts of up to S$1,888 daily. These cash coupons go straight into your moomoo account when you sign-up. This is one way that Futu SG makes investing rewarding, social, interactive and accessible for all.  This complements the live courses and events that the brokerage firm is already running, as well as its in-app social community that allows you to connect with like-minded peers. Talk about a whole suite of resources at your fingertips to aid your investment journey!

Find out more about the moomoo trading app here.

 

Disclaimer: This article is meant for information only and should not be relied upon as financial advice. This advertisement has not been reviewed by the Monetary Authority of Singapore. Terms and conditions apply.