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All You Need to Know Using USA Trading Sites in Australia

Information verified correct on December 9th, 2016

Find the cheapest brokerage fees and a range of flexible trading features when you want to buy and sell US shares.

If you’re looking to invest in shares, you don’t have to limit your portfolio to shares in ASX-listed companies. Several online trading platforms give you access to a selection of major international stock exchanges, including the New York Stock Exchange and the NASDAQ in the USA.

Rates last updated December 9th, 2016
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But if you want to start buying and selling shares on USA stock exchanges, you’ll need to find an online trading platform that offers a convenient and cost-effective way for you to manage your international investments.

What are USA trading sites?

A USA trading site is an online share trading platform that allows Australian customers to invest in US stock exchanges. The New York Stock Exchange and the NASDAQ, both based in New York, are the two largest stock exchanges in the world in terms of market capitalisation, so they offer plenty of opportunities for investors.

USA trading sites allow Australian investors to buy and sell shares not only in Australia but also in the US and other international markets. This allows you to access potentially lucrative investment opportunities that are not available in Australia, such as investing in tech firms listed on the New York Stock Exchange.

How do USA trading sites work?

Online share trading platforms allow users to sign up for an account, deposit funds into that account and then start buying and selling shares. In addition to shares in ASX-listed companies, many of these sites also make it possible to access international stock exchanges.

After selecting the market you wish to trade on, you can then choose a company you think offers a reliable investment opportunity. For example, when shares in company XYZ are priced at $1, you may decide to buy a parcel of 5,000 shares for $5,000. When company XYZ’s share price rises to $2 one year later, you may opt to sell your shares for $10,000 - a profit of $5,000.

Remember, however, that most trading sites will charge you a brokerage fee, for example $20 or a percentage of the amount of your trade.

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What are the types of USA trading sites available?

There are several Australian online share trading platforms that allow you to access international stock exchanges. Some of them are the online investing arms of the major banks. For example, CommSec offers access to over 25 exchanges worldwide, including the NASDAQ and the New York Stock Exchange. ANZ Share Investing, which is ANZ’s online share trading platform, provides access to the NASDAQ, the New York Stock Exchange and a range of other international markets.

Other trading platforms that allow you to trade international shares are run by specialist share broking firms. FP Markets, for example, allows customers to trade international shares through an FP Markets Share Trading Account.

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How do I compare USA share trading platforms?

Make sure that you take the following features and questions into consideration when comparing the benefits of USA share trading sites:

  • How much is brokerage? Compare the fee each company charges every time you place a trade.
  • Will you need to pay a monthly fee? Some platforms require you to pay a monthly fee in order to keep your account running or to access certain features.
  • How is market data displayed? Check how up-to-date the market data offered by each platform is — being able to make trades based on current information is critical.
  • How many international markets can you access? Some platforms offer access to a few key international markets while others let you to buy and sell shares on a much larger number of exchanges.
  • How easy is the platform to use? Is it fast, simple and convenient to execute a trade and monitor market performance?
  • What trading options are available? Is the platform just online or can you also place trades over the phone? Are flexible options like limit orders available to let you take advantage of market fluctuations?
  • Are education and research resources available? Trading shares is complex, so will you be able to access the necessary tools to increase your investment knowledge?
  • Is customer support available if you need it? How can it be accessed and when?
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What are the pros and cons to investing in US shares?

Pros

  • Access different investment opportunities. Trading on US stock exchanges allows you the freedom to take advantage of investment opportunities that are not available in Australia.
  • Increasingly more affordable. As a growing number of online share trading platforms compete for market share, brokerage fees are becoming more affordable.
  • Diversify your portfolio. If all your investments depend on the performance of one national economy - i.e. Australia’s - is your portfolio really as diverse as you think? Buying international shares protects you against having all your eggs in one basket.

Cons

  • Brokerage fees. You’ll need to contend with brokerage fees whenever you place a trade on an international share market.
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What are some of the risks?

One of the key risks to be aware of when trading US shares is that you may not have the same level of knowledge and expertise as you have when trading ASX shares. Investing in an area, industry or country which you know little about is always risky, so it always pays to make sure you know what you’re getting yourself into.

Another factor worth considering is the tax implications of international trading. You don’t want to make any mistakes when declaring your income and find yourself on the wrong side of the ATO, so familiarise yourself with the tax treatment of your investments as soon as possible.

Frequently asked questions

What share markets can I access via nabtrade?

Nabtrade allows access to the New York Stock Exchange, AMEX, NASDAQ, London Stock Exchange, Xetra, the Hong Kong Stock Exchange, the Australian Securities Exchange and Chi-X.

Can I try a trading platform before I sign up?

Yes, many platforms offer a free trading platform to allow you to test the features they offer.

Can I trade international shares using a CMC Markets Stockbroking Account?

No. This feature is not available with this type of account.

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