Right stock broker is the key to overseas investment. There are factors to look when selecting best broker for trading foreign stocks. It will help you to make the process quite simple.
A few decades ago, international stock investment was the most challenging task in share trading. It was due to the hassle of difficult process, absence of knowledge, as well as various rules, regulations and restrictions.
Today, you can legally invest or trade in almost any stock market in the world quite easily. You just need to choose the best international brokerage service provider. Your broker must be registered with the stock exchange regulator like SEC in US or SEBI in India.
If you want to invest in US stock markets then details on a US-registered broker’s or investment adviser’s background & qualification are available on SEC’s Investment Adviser Public Disclosure (IAPD) website.
Apart from these, you also need to look various other miscellaneous charges for a cost-effective investment. Here are 10 factors to consider when choosing overseas stock brokerage service:
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(1) Local Stock Broker Vs International Stock Broker
It is one of the most significant factors to look when selecting best broker for trading foreign stocks. A person can invest or trade in international stocks by two ways. First option of stock investment abroad is through local stock brokers of your country with foreign exposure.
Second option of stock investment abroad is through foreign based stock brokers. These options of investment are found to have their own advantages & disadvantages.
Generally, local stock brokers are costlier as compared to foreign based stock brokers. For example, local broker with foreign exposure may charge around $13 per trade while foreign share broker may charge around $2.5 per trade.
Similarly, you may also have to perform currency exchange every time a transaction is made. It is not the case when using foreign stock broker.
On the other hand, you can contact local brokers simply by visiting their offices anytime. However, this is not the case when investing through international stock broker.
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