Buying shares in a US company

greyster

Hi

If I want to buy shares in the US company, which is the cheapest dealer at the moment online in the UK?

Bonus question - would this dealer let me set up a mini S&S ISA so I can put the shares in it? How long does it take to set up the ISA part?

Thanks in advance

itsmickdundee

greyster wrote: »

Hi

If I want to buy shares in the US company, which is the cheapest dealer at the moment online in the UK?

It depends on how often you want to trade. The cheapest right now here in the UK is e*trade @ £8.95 per trade (buy or sell). However, if you make more than 30 deals a quarter it drops down to £6.95 per trade and there is no inactivity fee, UNLESS you make fewer than 2 trades within 6 months.

The big boys like Hargreaves Lansdown charge £14.95 per trade otherwise, if you pay a £12.50 quarterly fee, trades are £9.95, otherwise there is no inactivity fee. Barclays charge £12 a trade, but if you trade sporadically, you will be charged a quarterly fee of £7 + VAT. The more often you trade, the cheaper it gets. TD Waterhouse is £12.50 per trade and will charge a fee of £2.50 a quarter if there is no activity (buy or sell) on your account.

Me? I use Selftrade. £12.50 per trade and no inactivity fees. Considering how volatile the markets are, I would probably recommend a broker that does NOT charge inactivity fees as it is unlikely you will be making lots of trades, unless you really are feeling brave.

Oh, and you'll need to fill in a special W-8BEN tax form, otherwise you will not be allowed to trade in US stocks.

greyster wrote: »

Bonus question - would this dealer let me set up a mini S&S ISA so I can put the shares in it? How long does it take to set up the ISA part?

Thanks in advance

It depends if the rules of that S&S ISA allow US shares to placed within it. This is something I am unsure of - why don't you phone the broker you are looking at and ask them?

Also, note it will take around 2-3 weeks for your share trading account to be set up (tax and security reasons) and also a week or two for them to process your W-8BEN tax form.

My other bit of advice: if you are new to trading, do NOT rush into things or listen to ANYONE other than your own research. Buy a few good books on the subjext (see Amazon), take your time and research, research, research! If you cannot be bothered with the latter, I would stick to the bookies...

Hope this helps.

greyster

very nice reply, thank you.

You did refer to e*trade as the cheapest (with no inactivity fees) despite you being with Selftrade, just wondering why you use them over e*trade?

Are you saying generally that all brokers take several weeks to processs app + us form or just specific ones? Thanks.

itsmickdundee

greyster wrote: »

very nice reply, thank you.

You did refer to e*trade as the cheapest (with no inactivity fees) despite you being with Selftrade, just wondering why you use them over e*trade?

Are you saying generally that all brokers take several weeks to processs app + us form or just specific ones? Thanks.

Because when I signed up with Selftrade, e*trade didn't exist! Even now though, I feel Selftrade is far superior in terms of layout and available information to registered customers. It just seems a more professional set up. Since I am not and probably never will be a volume trader (that is making a LOT of trades each year), it suits me to pay a couple of quid more for each trade rather than fork out an additional £10-30 in inactivity fees each year.

It will usually take around 2 weeks from you initially filling in all forms, the (online) broker to receive them, check everything, set up your account and then send back details confirming your account.

To be fair, I wouldn't think there is any rush to open an account anyway. Markets are very volatile right now, and if the US and UK are (inevitably) confirmed to be in recession later this year, it really wouldn't be a good time to invest in any company as a recession = falling stock markets. You'll want to wait for the markets to bottom out and then hoover up some bargains.

And when the markets will bottom out is anyone's guess. Some might say last week. Some might say this week. Some might say next year.

Who knows - the current economic climate, as it is when there is any downturn - is difficult to predict in terms of calling a bottom. If the world is confirmed to be in recession (which I think it will be, just in time for xmas...), we might be looking at another 3-4 years before the markets stabilise and start gaining again...