Brokers For International Stock Trading
To have a truly diversified portfolio, you should build one that includes foreign assets. Invest in international equities and bonds for the purpose of hedging your portfolio and keeping it diversified. Profits can be made by investing in international markets, especially in emerging markets, where both risk and reward are relatively higher. Finding the right broker to help you realize these investment goals is critical to your success. Here is a list of brokers that offer investing and trading opportunities in international markets.
E*Trade
- Launched global trading platform in 2007, allowing investors of all backgrounds to invest in companies in 24 countries and 30 foreign markets.
- Has no minimum account balance, which allows investors to trade as little or as much as they wish.
- Offers real time foreign stock quotes and research for 4,500 different foreign securities, including up to the minute news, charts, and watch lists.
- Access to free independent analyst research that give investors more opportunities to diversify their portfolios.
- Open a new account, trade for free for 60 days and get up to $500. You'll get a Complete Trading Account, which includes global trading capabilities.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $7.99 - $9.99 | $7.99 - $9.99 | $0.75 | $500.00 | $45.00 | $0.00 - $19.99 |
Scottrade
- Scottrade offers thousands of investment opportunities in 20 different countries around the world, many of which can be traded for just $7.
- All foreign trades are completed in U.S. Dollars, eliminating currency conversion confusion.
- Provides online access to many foreign traded securities which allows international investors the opportunity to self-direct their investments.
- Offers access to foreign stocks, ETFs, mutual funds, and American depository receipts, which allow investors to diversify their portfolio in many different ways.
- Get access to a wealth of educational articles that will help you invest in foreign and global assets with success.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $7.00 | $7.00 | $1.25 | $500.00 | $27.00 | $0.00 - $17.00 |
MB Trading
- MB Trading offers 24 hour customer service support, which allows for real time international investing.
- Earned 4 ½ stars from Barron's in 2010 and earned the prestigious Best Broker honor. Took top honors in SmartMoney’s 2010 review.
- Has low account minimums and low commissions for international investing, allowing more investors the ability to access foreign asset products.
- Advanced features such as mobile trading and multiple online trading platforms are available. A brokerage account here has no maintenance fees, and provides access to a large online investment community.
- Provides direct trading access to multiple foreign exchanges with instant trade execution.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Fund Trades |
| $4.95 | $0.00 | $0.95 | $1,000 | N/A |
Fidelity Investments
- Provides a comprehensive educational suite for international investing based on investor profiles so you can determine if international investing is right for you.
- State of the art international investment screeners make it easy to locate viable foreign stocks.
- Fidelity Investments offers high tech trading features such as mobile trading and easy to navigate online trading platforms that make buying international investments easy.
- They have a large offering of independent research.
- Check out their physical branches for investment advice.
- Offers foreign securities in highly recognizable “blue chip” companies that add some stability to highly volatile international markets.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $7.95 | $7.95 | $0.75 | $2,500 | $32.95 | $0.00 - $75.00 |
Why Invest In Foreign and International Stocks?
Investing in foreign assets refers to the process of buying and selling international stocks, bonds, mutual funds, ETFs and other investment products. The reason we should invest globally or have representation of foreign assets in our portfolios is to make sure that we keep our investments diversified. There may be many financial opportunities that can be found in both developed and developing countries: in developing nations and emerging markets, there's the potential to earn higher returns due to the higher risk that these areas pose. Note, however, that there's also much more volatility found in foreign markets.
Now even though the risks for investing in foreign markets are high, there are benefits to making such investments including:
- Portfolio diversification. Investing money in companies and markets that are not based in the U.S. provides for greater protection against losses associated with domestic market downturns. Your investments will have more of a chance to produce consistent returns if spread among independent markets since not all markets move in the same direction at the same time. There have been a lot of studies made that show how international asset classes do not correlate well with domestic asset classes, making it a good idea to have representation in all these areas in your portfolio. Correlation simply refers to the behavior of an investment: well correlated investments mean that they behave similarly throughout time. Look to own diverse investments that perform differently and whose performance is based on different factors.
- Growth. The potential for growth in foreign markets is generally greater than with U.S. markets, especially in emerging economies.
Of course, there are risks associated with international investing. These include:
- Currency conversion rates. Because you cannot invest in foreign markets with the U.S. Dollar, you must accept the fact that currency conversion rates will affect your profit or loss. The effects are not always negative, but due to the highly volatile nature of the currency markets, you can expect to experience some losses along the way thanks to conversion rates.
- Dramatic market changes. Just as the U.S. market experiences drastic changes in value, so do international markets. In some cases, these fluctuations can be even more dramatic thanks to social and political climate changes and economic conditions. The best way to avoid losing money due to volatile market conditions is to invest for the long term.
- Lack of information. The Securities and Exchange Commission, or SEC, regulates how publicly traded companies divulge their financial condition and what information they are required to report. Many foreign companies have no such regulation and the results that they do publish may be inaccurate or may even be in a foreign language.
- Expense. Investing in foreign securities is usually more expensive than investing in domestic securities. For instance, brokerage fees are usually more expensive when you trade international assets, and you may have to pay a premium price for the security itself. Tax structures are also different in foreign countries, where taxes may be levied on dividends before they are distributed.
Before you consider investing in foreign markets, take the time to do your homework and learn as much as you can about the markets and securities that you want to invest or trade in. Then, locate a broker who has expertise in this area. You can do this through a full-service broker or through a discount online broker, but be aware that most discount brokers allow traders to make their own decisions concerning their investments. If you are a novice trader or someone who prefers a more hands-on approach to investing, it may make more sense to engage a full service broker.
Some great articles on the topic of international investing:
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