I have been buying and selling US stocks via a UK online broker. But every time I buy they convert from £ to $ and when I sell, they convert the proceeds back into £ sterling charging a spread of 1.7% which is eating a large hole into my profits. There must be a better way of doing this, like opening a US $ bank account and issuing and receiving funds from there. Am I being naive? Can anyone advise, please?
Hi Wayla... we wrote a book on this earlier this summer - http://www.stockopedia.com/books/getting-started-in-us-shares/
Some of the biggest brokers are the worst in this regard - Hargreaves Lansdowne is a very high profile offender here... allowing no foreign currency to be held in brokerage accounts - so they sweep you back and forth between USD and GBP at their 1.7% rate. Frankly, it costs nothing to do fx trades these days, so I can only imagine it's a deal with their execution intermediary...
Best thing to do if you want to trade US shares is change brokers so you aren't fleeced 3.4% just for forex on every round trip selling e.g. Apple to buy Microsoft ! There's some comment in the ebook about the brokers that are better on forex.
If you come to the London Investor Show on Friday we've a hard copy of the US ebook available for free.
