SogoTrade established itself as a low-cost brokerage for active traders who were willing to give up some bells and whistles for a better price. As with many smaller brokerages in this space, the shift to no fees has squeezed SogoTrade's niche. While SogoTrade still has some unique offerings in that it supports Chinese-speaking customers with the click of a button and enables cryptocurrency trading, some of its weaknesses are more evident without a general pricing advantage compensating for them. We’ll look at how SogoTrade stacks up in this new online brokerage environment and help you decide whether it is the right fit for your portfolio
- SogoTrade's offerings have tools that are spread across multiple platforms, which causes navigation difficulties.
- SogoTrade has a link to cryptocurrency trading by Apex Crypto. SogoTrade clients can quickly move money from their account to the cryptocurrency trading account. Cryptocurrency trading is not technically offered by SogoTrade but this link makes it a little easier to engage in the cryptocurrency market.
- Options traders will feel comfortable with the SogoPlay platform, which is essentially the OptionsPlay tool set with a SogoTrade wrapper.
Who SogoTrade Is For
SogoTrade is still marketed to active traders looking for cost savings. As this space has grown smaller due to industry-wide pricing changes, SogoTrade has made some efforts to broaden its appeal. While SogoTrade has said it is focusing on attracting younger investors, the bulk of its recent development efforts appear to be in its partnership with KGI, a Taiwan-based online broker. The platform allows Chinese-speaking investors to click a button and translate the platforms into their preferred language. The focus on Chinese language support suggests SogoTrade has found a new niche as its no-frills active trader segment is being chewed into by larger (and now cheaper) rivals.
Customer service for those who call in is prompt
The options platform, SogoOptions, is tightly integrated with the OptionsPlay tool set
Chinese language support is available for customers who want it
Fully paid stock lending program can help generate additional income
SogoTrade still charges commissions for equity trades
You cannot choose a tax lot when closing a position
Switching from one web-based platform to another requires several clumsy steps
No interest is paid on idle cash
- Customers who call the support line have quick access to human assistance, both in English and Chinese.
- The options platform, SogoOptions, offers streaming quotes, analysis and risk management with fast execution, and has the OptionsPlay tool set built-in.
- There is a Chinese language translation button customers can click on if they want the entire platform converted.
- Customers can opt into SogoTrade's fully paid stock lending program, which pays interest on stocks that are borrowed from you by short-sellers. This program can help generate additional income for your portfolio.
- SogoTrade still charges $2.88 for equity trades and also a per-ticket fee for options trades. There are plans to change this, and company spokespeople have said that few of their customers actually pay equity commissions currently, but the fees are still listed on their website.
- Average cost is assumed for calculating the cost basis of a trade. There is no way to change to a more favorable calculation when closing a position.
- If you’re on the SogoOnline platform and want to use the SogoOptions site, you have to click in quite a few places to back out of one site and switch to another. It would be better if there was a unified platform available.
- No interest is paid on idle cash and there is no money market sweep option available to investors.
SogoTrade's usability comes with an upfront caveat in terms of our review. SogoTrade offers four desktop platforms, Android and iOS mobile apps, and a mobile browser. We looked at SogoTrader, SogoOptions, and the iOS mobile app for this review. We did not look in-depth at the SogoOnline or SogoElite platforms. It's confusing to have to switch platforms to trade options when few other brokers require such gymnastics from their customers.
SogoTrade allows you to open and fund an account online. Unfortunately, once you get up and running, the process of finding and using the available tools is confusing at best. Certain features, such as streaming data, are on SogoTrader while others are on SogoOnline. Searching for features on SogoOnline generates multiple tabs and requires a fair bit of clicking around to find what you're looking for. Customers will likely end up mainly using one of the SogoTrade platforms to avoid the confusion even if that platform doesn’t have all the features that are needed.
Your account snapshot is the first screen you’ll see after logging into SogoOnline. This page shows balances, open positions, and your account’s current applicable commission rate.
When logging in on the SogoTrade mobile app, you must type in a four-digit pin because there is no fingerprint scan or facial recognition option. The first screen you see is Quotes, which has pricing and a summary chart for each stock on your watchlist. Watchlists are the same across all the platforms, so if you set one up on SogoTrader, you can find it on the matching mobile app. All available order types can similarly be entered on all platforms.
SogoTrade's trade experience is difficult to fairly evaluate. Taken as a whole, the workflows are functional and the necessary tools are there. However, the experience isn't integrated across platforms and you may find yourself losing time looking for a particular tool or simply cutting out of your workflow because of the annoyance of jumping to another platform to use it.
As tools are spread across multiple platforms, it is a plus that you can open a trade ticket from any spot. Trading defaults can only be set for market vs. limit orders. SogoTrader, the streaming platform, displays a chart and key stock statistics when you're looking at a quote. You have choices when it comes to picking the limit order price when entering an order. You can choose "passive," which buys at the bid and sells at the ask, or "aggressive," which enters a buy at the ask and a sell at the bid. "Semi-aggressive" calculates the midpoint between bid and ask. This is an interesting feature and it’s too bad it’s not available on other SogoTrade platforms.
Although it is annoying that the mobile app uses a pin system rather than biometric authentication, the SogoTrade app is clean and simple for use as a trading platform while on the go. To place a trade, click on any stock or watchlist item, and you’ll see a Trade button at the very top. Tapping on it opens a simple trade ticket where you can make use of all the order types SogoTrade offers.
Range of Offerings
SogoTrade has a limited range of offerings with some interesting additions. The broker offers an average number of easy-to-borrow stocks for short sellers, and allows complex options of up to four legs online. On the downside, you have to call a broker to trade fixed income and there is no futures or forex trading. However, you can trade Bitcoin and other cryptocurrencies via clearing firm Apex Crypto. This cryptocurrency trading is linked, but not actually built into the Sogo platforms.
- Stocks long and short (approximately 2,000 on the easy-to-borrow list for short sales)
- OTCBB (penny stocks)
- Mutual funds (~3,400 are no-load, no transaction fee)
- Bonds (corporate, municipal, treasury, CD, international) via live broker only
- Simple and multi-leg options
- Robo-advisory integrated into website/mobile app
- Cryptocurrency through Apex Crypto
SogoTrade clients can place market, limit, stop limit, trailing stops, and trailing stop limit orders. There are no conditional orders (one triggers another, one cancels another, etc.) available, and executives say that their clients have not asked for that capability. You can easily close a selected position from your portfolio listing, though it defaults to market order. You cannot select a tax lot to determine your costs basis when closing a position—all trades default to average cost.
SogoTrade's order routing system selects trading venues based on the order request details, avoiding venues that don't support that particular order. The smart order router is built to react to market conditions and technical issues. SogoTrade’s router does not go through dark pools or break up orders. The order router is primarily sequential and balances speed and price improvement, though SogoTrade does not make any execution quality statistics available. SogoTrade's platforms do not have any backtesting or automated trading capabilities.
SogoTrade executives say that most customers are trading for $0 but they have not yet formalized that pricing structure, so our ranking is based on the firm’s stated $2.88 per trade rate. The website currently says that the fee for an online equity order is $4.88 for those who trade less than 150 times a quarter, but we are told that this fee is no longer being charged. Options trades incur a single base fee plus $0.50 per contract no matter how many legs are traded. The firm is working on a change to their pricing schedule, and we will update this review when it is available. Margin fees are on the higher end of the industry average.
- Equity orders are $2.88 per trade for orders of up to 100,000 shares. Larger orders must be placed through the Trade Desk, which incurs a $25 surcharge.
- OTCBB commissions are also $2.88. There is a minimum investment of $100 for stocks priced under $1.
- Options base commission is $2.88 per transaction.
- Options per contract fee is $0.50.
- An options order for 50 contracts is $27.88, regardless of number of legs.
- Covered call trade of 500 shares plus 5 contracts is $5.33.
- Mutual fund fees are $15 per fund.
- Margin interest at $10,000 balance is 9.25% and $100,000 balance is 7%.
- There is no account maintenance fee, but there is a $50 low equity fee for any account that has under $100 in equity and has not executed a single transaction in the last year.
- Account closure fee is $0.
- Account transfer fee for a full or partial transfer is $75.
- Exercise and assignment fee is $15.
- Voluntary reorganization is $50.
- Sending a wire is $25 for domestic, $50 for international.
- Sending a paper check is $5.
- Paper trade confirmations are $5 each.
- Paper statements are $10 per month.
- Live broker fee is $25 plus online commissions.
How This Broker Makes Money From You and for You
The pressure of zero fees has changed the business model for most online brokers, though SogoTrade has not yet gone public with its fee changes beyond dropping the $4.88 rate. In lieu of fees, the way brokers make money from you is less obvious - as are some of the subtle ways they make money for you.
- Interest on cash: SogoTrade earns interest using the idle cash in your account, and has no cash sweep option. This means any interest the company makes is not shared with you.
- Stock loans: SogoTrade can also earn revenue loaning stocks in your account for short sales—with your permission, of course. SogoTrade shares the revenue from loaning stocks with you. We did not receive an estimate of what a customer might expect to earn on their Fully Paid Stock Loan program.
- Payment for order flow: SogoTrade's orders are routed to generate payment for order flow (PFOF). This is the practice where a broker accepts payment from a market maker for letting that market maker execute the order. The concern with PFOF is that you are sacrificing better execution on your order so that your broker can make a few more cents on the transaction.
- Price improvement: SogoTrade was unable to tell us their price improvement practices.
- Portfolio margining: SogoTrade does not offer portfolio margining, which can lower the amount of margin needed based on the overall risk calculated. Typically, portfolio margining works best for customers who trade derivatives that offset the risk inherent in their equity positions. If you trade derivatives and make heavy use of margin, you should consider a different broker.
- SogoTrade does not offer portfolio margining
- SogoTrade has a stock loan program
- No interest is paid on idle cash balances
- There is no cash sweep program
- SogoTrade clients can enroll dividend-paying stocks in a DRIP program
All of SogoTrade's platforms have useful tools built-in, but they don't communicate with one another. This leads to a muddled research experience even for the most patient investors. There also is no mutual fund or bond screener offered by SogoTrade.
Stock and ETF Screener
On the SogoOnline website, the stock screener is extremely basic and is not customizable (or particularly useful). The screener does let you look for optionable stocks though. Unfortunately, you cannot save the screen for future use or export the results to a watchlist.
The SogoOptions platform features in-depth strategy descriptions, a graphic display of each strategy, lookup, and order entry. The SogoPlay feature has a way to look for an options strategy once you have chosen the underlying stock and entered your market outlook. As with many of the other research features, the tools are spread out over several different platforms and are hard to find.
Tools and Calculators
In SogoOptions, there are a number of options-specific tools such as a profit and loss calculator and probability calculator.
Trading Idea Generator
There isn’t a trading idea tool, but clients can view the SogoPlay Daily Trading Idea and the SogoTrade Morning Call newsletter. Again, this requires accessing different platforms.
Company news is provided by Comtex and Streaming Market. Most of the news is displayed only in the SogoTrader platform, and usually spawns a new browser tab.
Analyst ratings are provided by ValuEngine on an individual stock basis on the SogoTrader platform. You have to type in a ticker symbol to read the report; there is no analyst overview available.
The charting is extremely basic and clumsy on the SogoOnline and SogoTrader platform, though the latter has streaming data. There is better charting on the premium SogoElite platform, but that platform was not a core part of this review.
SogoTrade’s market focus used to be active traders, so a well-developed education center wasn’t a priority. Despite an apparent shift in focus, the educational content is sparse, especially compared to larger rivals who are now SogoTrade’s direct competitors for new investors. SogoTrade’s education center provides the bare-bones basics of investing in stocks, ETFs, and options. The SogoPlay platform does feature a good amount of information on options strategies, how they should be used, and how to analyze them. Like the tools spread across platforms, the educational content can be hard to find and challenging to navigate once you are there.
- Phone line available Monday-Friday, 7 am to 8 pm Eastern time. Phones are answered very quickly. There is a separate phone line for Chinese-speaking customers.
- Live chat available on the website for current and prospective clients.
- Live broker available while phone lines are open.
- Non-U.S. customers in non-restricted countries can open accounts. SogoTrade has customers from 149 countries, currently.
SogoTrade’s security is lagging the industry in a few important ways:
- Two-factor authentication is not available.
- Biometric entry is not available.
- SogoTrade's login protocol allows users to set a unique account phrase and image. Customers can create a PIN, which is entered through an encrypted on-screen keypad to protect against keyloggers.
- SogoTrade’s clearing firm, Apex Clearing, provides excess Securities Investor Protection Corporation (SIPC) coverage from Lloyd’s of London up to an aggregate of $150 million, subject to limits of $37.5 million for any one customer’s securities and $900,000 for any one customer’s cash.
- No significant breaches during 2019 were reported by the Identity Theft Research Center.
SogoTrade is searching for a new niche in a price competitive landscape where large, integrated, and full-featured online brokerages are reaching out to all investors and traders. While many of its shortcomings can be traced back to a no-frills, low-cost approach designed to attract active traders, that is no longer enough in today’s market. It remains to be seen whether or not the inroads SogoTrade is making with Chinese language support will create a new niche for the company. The firm has announced a partnership with KGI, a major brokerage in Taiwan and Hong Kong, which will allow further access to some Asian markets.
To improve, SogoTrade needs to put some work into organizing its platform(s). SogoTrade's trading tools are fragmented across several programs. Simply consolidating these tools and tweaking the user experience would significantly improve its usability. Again, it is not that the tools are missing—they just aren't there when you want them depending on which platform you are using. SogoTrade is also a latecomer to security practices that are becoming standard, such as biometric logins for mobile apps and two-factor authentication when logging into the website from a new browser. The cryptocurrency trading partnership with Apex Crypto is a helpful feature for those who want to get into trading cryptocurrency, but here again, there are other options.
Overall, it is difficult to recommend SogoTrade to the average investor or even active traders. Now more than ever, both these groups are spoiled for choice—and almost all of those choices come at an excellent price point with all the features and a more organized trading experience.
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