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U.S. stock account opening strategy: how to choose a U.S. stock brokerage?
The first thing to do when investing in U.S. stocks is to choose a reliable brokerage U.S. brokerage firms that fit your investment style, so what factors should be considered when choosing a U.S. stock brokerage? I. The size of the brokerage strength The U.S. securities brokerage is not a state-owned monopoly industry, large and small stock brokerage companies are countless. Investors should prefer those large-scale strength of the well-known brokerage, so that investment security will be relatively secure. At present, the U.S. stock market scale ranked top network traders are: Charles Schwab, InteractiveBrokers (Interactive IB), TD Ameritrade, E*Trade, Fidelity Financial Services and so on. For over the network traders, can not simply through the brokerage website on the size of the company's strength to draw conclusions, to check the third-party or regulatory body's website. For example, U.S. stockbrokers will generally join the Financial Industry Regulatory Authority (Financial Industry Regulatory Authority, FINRA), you can check FINRA's website to see if the brokerage is one of its members. II. Tradable varieties Chinese investors are concerned about the trading varieties generally include U.S. stocks, ETFs, options, foreign exchange, Hong Kong stocks, futures and bonds. U.S. stock brokers can trade different varieties, you need to know beforehand whether the brokerage firm you choose can meet your needs. U.S. stocks are the most basic trading varieties, which all brokers can support. Hong Kong stocks are also the center of attention for Chinese investors due to their geographic location. Brokerage firms such as Reuters IB, E*Trade and Charles Schwab can also provide Hong Kong stock trading. Options are a sure-fire way to play U.S. stocks, and almost all brokers offer options trading. However, some brokers will limit the combination of options that can be done, such as Scottrade Securities does not allow investors to naked short selling, this restriction can avoid investment novices to make mistakes, but for experienced investors, this restriction is not very convenient, because there are times when naked short selling put options can help investors to reduce costs. ETF funds are also common varieties. In the U.S. market, there are many ETF funds linked to indices, gold, oil, sectors, markets, etc., which opens up a convenient channel of asset allocation for ordinary investors. Most brokers can trade ETF funds, but there are very few brokers such as SogoTrade that do not offer ETF trading. III. Transaction Fees U.S. brokerage firms have different ways of charging transaction fees. For investors who trade frequently, the difference in transaction fees between different brokerage firms can be as much as hundreds of dollars per month, so you should compare and choose carefully. Most online brokers charge per trade for U.S. stocks, such as TD Ameritrade, which charges a fixed fee of $9.99 per trade, regardless of the number of shares traded. Some brokers, in addition to charging a fixed fee for each transaction, charge an additional fee if the number of shares traded exceeds the limit, such as Charles Schwab, which charges $12.95 for each stock transaction, and $0.015/share for the portion in excess of 1,000 shares. Some brokerage firms also charge by the number of shares traded, while Interactive IB charges by the number of shares traded, charging half a cent ($0.005) per share. Options investment is a must for advanced investors is the investment means, in this regard, most brokers are charged a fixed fee per transaction, and then according to the number of contracts traded plus charges, such as Scottrade securities options at $ 7 + $ 1.25 per contract charges. Brokerage firms that cater to professional investors, such as Pinnacle IB, charge $0.7 per contract for the number of options traded, in contrast to Pinnacle IB's trading fee advantage. If you are an experienced investor, the financing rate should also be a key consideration. Some brokerage firms offer financing rates of 3%, while others offer rates as high as 9%. If the financing size is large, the resulting cost difference is quite huge. IV. Chinese language services The language barrier may be the biggest obstacle for many Chinese investors to enter the U.S. stock market, many U.S. brokerage firms have recognized China's investment needs, some of them just provide Chinese web pages and Chinese trading software, do in-depth will provide Chinese customer service hotline, in Hong Kong to open a branch office to directly serve Chinese investors. In the Chinese cultural services in the Yingtou Securities (InteractiveBrokers) and Scottrade Securities (Scottrade) to do very much in place to do very much in place, by the Chinese investors and overseas Chinese people's favorite. V. Financial security Investors will put money across the ocean, financial security is a must consider. The good thing is that most of the well-known brokerage firms have participated in the Securities Investor Protection Corporation (SIPC) insurance, SIPC for each investor's account to provide a maximum of $ 500,000 in protection, which includes a maximum of $ 100,000 in cash protection. In addition, some brokerage firms have also purchased insurance from commercial insurance companies to provide additional insurance for investor accounts, for example, PCG IB through the SIPC and Lloyd's of the United Kingdom to provide up to $30 million in protection for its customers' accounts. These are the five major factors that need to be considered when choosing a U.S. stock broker, and there are also details such as trading speed, trading spreads, and investor education that investors need to pay attention to. Choosing the right broker needs to be based on your own investment needs and investment style, taking these factors into account, and after careful comparison and selection, you can find the right broker for you.