Can you recommend the broker for US market?

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30th Dec '20 by doubleT

28 comments 913 reads

hi, I have come across a few, including Interactive brokers, TD, Trading212. But the online review of them are mixed. Can anyone post some first hand real experience? Many thanks and Happy new year. Roy

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DoubleT

Premium Member

Fintech l e-wallet l WealthTech l Angel investor

28 comments

Wayneskie

14th Jan '21

Wilkonz (or anybody else), Can I ask you, do you fund your account with USD? Are you able to trade in USD and effectively leave it as USD until you want to withdraw. Or do you fund with GBP and trade in Dollars with No FX.

I ask because I may open an IG ISA this coming tax year. I have been playing with their site, but only in demo mode.

PLS1nve5t

14th Jan '21

For spread betting prices are in pounds, and as you are not buying any shares directly there is no FX conversion fee, the only cost is the spread and a small overnight charge if you make a DFB (daily funded bet).

For the ISA, you account must be kept in pounds (HMRC stipulation I believe) so each US trade incurs FX fees. These vary between brokers, II=1.5%, HL=1%, IG=0,5% are the ones I know about.

Also check the commissions for each trade - Just opened a IG ISA as if you make 3 US trades in the month (£10 each), your next month's US trades are commission free, and from what I understand, keep making 3 trades per month and you never pay commission again.

Good luck with whatever you decide...

Macro

14th Jan '21

Wayneskie,

With an IG spreadbetting account you fund the account in GBP. Remember that you are trading points not £ and so the currency of the investment does not matter. Your account in credited in GBP, and any dividends that fall due get creadited to your account in GBP.

With an IG sharedealing accont you fund the account in GBP. Importantly, here the currency does matter as you own the purchased shares. A fee is charged for the currency convertion. Proceeds from sales and dividends are credited to your account in GBP.

00fist00

14th Jan '21

Hargreaves and Landsdown allow US trading once you have signed a W-8BEN form

I wasn't keen on IG as it took 3 days for the sale of a share to arrive in the account and another two days to withdraw it to a bank. Phone service at moment is very slow, 2 calls made to them 40 minutes to answer and 50 minutes to answer. I tried to close the account and had to provide an email with lots of info on. They said they closed it and sent me a paper copy of statement which then said I owed £1 for the letter. They wouldn't fully close account even though I couldn't log in anymore until I paid the £1 so had to call up again and pay over phone.

PLS1nve5t

14th Jan '21

Thanks for the IG warning - but could the 3 days delay be due waiting to clear funds on the settlement date ? - I think that's pretty standard when share dealing. Most brokers are okay giving credit if you want to buy more shares, but a cash withdrawal needs the cash to be banked.

The additional two days to withdraw is a bit poor, HL this week paid me the day after requesting a ISA withdrawal, though it them took them three days to send a PM to say the withdrawal had gone through - they are slipping a bit.

As for the £1 charge - hahaha they must be extracting the urine here.

Rusty2

14th Jan '21

HL are a lot more expensive than IG. IG I agree are slow at answering the phone, took me 70 minutes to talk to someone. But it is an 0800 number so is free. Try closing your HL account will probably take weeks.
I sent HL an email about transferring some cash from my ISA and after 2 days got an automated email saying I should look on their website, as they are busier now with contacts. £1 is not very much for a letter, HL charge 1% forex fee plus about £12 transaction fee. I’m moving from HL to IG. HLs service has got much worse in the last 2 years, when I started using them about 8 years ago they were very good.

Rusty2

15th Jan '21

I have only just started using IG platform, one good thing is the live prices on foreign shares and these are accurate, I have just sold some US shares on HL and the prices matched IGs live prices. HL take about 20 minutes to update their foreign shares prices.

Harry Hindsight

16th Jan '21

I use IG for UK shareas and Interactive Broker IBKR for US. Open a GBP account in IKBR and then can exchange to USD - loads cheaper than through your bank as no special FX charge just the rate. Not nice to use though and go elsewhere for charts. Costs a dollar to trade on small amounts as opposed to £9.95 on AJB, each way. IG is far more user friendly and I find the quotes reasonable. Great for putting in Limit orders if have to go to work and also Stop orders if see a share heading south and can't focus on it intraday.

Find US stocks amazing, shed loads with a full stack of Stockrank Green. I get out before Earnings releases as seem to drop on good updates (as has certain UK shares recently) - but gives a great buy opportunity if a pattern trader (which you are limited on with IKBR unless have $25k).

Edinburgh Investor

16th Jan '21

I’ve found Freetrade really good. Charges are way lower than on my HL account where I’m paying over £30 if you factor in fx. Decent execution as well. I’ll be switching my isa over to freetrade in the new tax year. Huge range of US stocks too.

Breakout Trader

16th Jan '21

I agree with @Wilkonz, and trade the US markets in the same way with IG spreadbets.

I find it to be a very nimble way to trade, you can adjust entries and stops instantly on the chart, and can easily replicate the holding / risk you would have with buying the underlying shares, but with the benfits mentioned.

Spl183

17th Jan '21

Thanks for this Gari. Firstrade hadn't come across my rader until I read your post. Before enquiries / research on platforms that provide ability to trade US stock options led mostly to Tasty Works or IBKR.
Was able to open an account in a day, so gonna transfer some funds over and give it a go. Was faster to open account versus Tasty Works, also it seems to have a good range of OTC stocks too (unlike TW).

Best,
Spl183

Spl183

17th Jan '21

Thanks both @Wilkonz / @BT

Same for me. However, trying to reduce SB activity apart from a couple HODL trades on BTC/ ETH. Since I still tend to spend too much time watching the charts rather than getting on with day job, etc. So my resolution is more stock / options trades with longer, swing strategies based on charting set ups.

Do you struggle to take your eyes off the chart during live action, or have you managed to create a disciplined process to get other things done during live trades ? Be grateful for any insight / advice here !

Best,
Spl183

Mike888

17th Jan '21

I use IG for SB, CFD and more recently ISA. Presuming that you're not looking for leverage I would still consider the platform for trades and ISA's. Obviously a big advantage of an ISA is no tax on profits.

The platform is easy, spreads seem to be as tight as you'd get elsewhere, trading fees are only £3 for regular traders (£0 for US trades although I'm not sure if this is across all markets and caps) also no custody fee if you hit a trading threshold. They offer a far richer universe than many platforms. You will not be able to trade OEIC's though.

The downside is that they don't seem so good at client comms as the other more cosseting platforms such as HL, II etc. Recent example I wanted to take part in a tender offer on one of my positions, it needed emails to IG to get them to even notice it was available, other platforms would have been on top of that. It feels like IG have a little way to go to mature into their ISA offering.

At times I've found it difficult to get positions on smaller caps and have resorted to using HL, same day, same time and position filled with HL but no quote available with IG. This has occurred more than once, which is frustrating.

I'd still recommend them, swings and roundabouts I guess.

Rusty2

17th Jan '21

I think it is a good idea to have 2 or more platforms available. I have HL but now also have IG ISA. I agree prices on the shares I have compared have been the same. IG has a few US shares that HL does not but H L has Scandinavian markets which I have a few shares in. HL also has funds.
I may open a spread bet account with IG. Surprised how basic the IG ISA/share account platform is, the spread bet platform does look better. Not sure about the transaction fees on IGG, is it 3 trades or 3 US in previous month to get the free US dealing?

My plan at the moment is not to buy anymore in HL ISA apart from funds and then move cash from there to IG ISA.

Not come across Freetrade before, read some recent reviews on Trustpilot which were very mixed.

Breakout Trader

24th Jan '21

Hi @spl183

Good question, and I think this is one of the most important aspects that traders need to pay attention to. Screen-watching can lead to anxiety, emotional reactions to price movements, and burnout.

Its something that I have done, particularly in the development phase when you're trying to define a methodology that works for you (I'm not sure how much trading experience you have).

I too have a full-time job, and things that have helped me get away from screen watching are:

1) No intra-day trading - This doesn't mean never look at intra-day charts, as sometimes it can be useful. But my main analysis and trade positioning is done on the daily. Weekly is fine too.

2) Use Moving averages - These give me a clean cut off point. I try and make sure stop losses are placed below key MA's on entry, and use them as guidelines on the way up.

3) Use stop losses and adjust them - this means that you don't need to watch the screen. If price takes you out it should be for an amount that you were willing to lose when placing the trade. I start with 1% risk, and look to move to breakeven as early as possible. That means I'm not anxious and don't need to babysit the trade.

4) Realise that you don't need to watch the trade. It can be better to enter, and then check your trades either just before the close or after. Checking just before means you can judge how price has moved that day, and close the trade off if you see something you don't like. Reacting to intra-day dips as they happen can be costly.

Just some ideas, hope this helps a bit.

LeeA_uk

24th Jan '21

I have been having the same thoughts and as I largely deal with US stocks, I'm currently using HL and paying the FX fee for each transaction.

Not looked into this fully yet as HL on the whole have always been very good but counting up the fees over the year it would make more sense to have an account with USD.

Can you open an account with IG and hold USD? so you only pay the fx fee when depositing or withdrawing?

Rusty2

24th Jan '21

I think you can hold $s in IG account but the fees are different and you can’t hold $s in an ISA. If you don’t want it in an ISA then I would consider Charles Schwann where you just deposit $s.

I’m just using an ISA at IGG.

gari en desti

27th Jan '21

Hi Spi183. Sorry for slow response. Stocko doesn't let you know if anyone has commented on your post, which is a bit shite, as you only discover this by backtracking. Glad you found this process as easy as I did. I'm so happy with Firstrade. It's so much more civilised being able to buy a few shares in a company and not having to allow for the cost of fees or stamp duty etc. Good luck.

Spl183

27th Jan '21

@Breakout Trader
Many thanks - really appreciate the upfront, "we're all human" humility. Totally agree with you words; coupled with other pressures of lockdown, I was probably in the burnout stage in run up to Xmas. Fortunately, also coincided with some sizeable multibag gains (which thought was too good to be true...) for the first time - but conversely also brought added stress/ new anxiety worrying how to manage the mixed emotions caused without being daft ! Crucial for me was starting off with frequent small trades and making all the school boy errors needed to learn what not to do without huge losses.

Unlike a friend who made big gains far too quickly and, a lack of learning/ discipline, led to gambling bets and, inevitably, huge losses (he did apply harsh lessons into incredible growth of SIPP the following 12 years mind you!)

Since the festive break, have been working on a narrowed/ more specific strategy to be more disciplined/ reduce screen time. Also would recommend Malcolm Pryor's "Spreadbetting Handbook" editions as a read if not already digested; more in-depth/ technical than the Naked Trader's book and it also gives an example of how someone in full time employment can best manage weekly trades along the lines of where you seem to be now.

The very best of luck with it all and wish you a prosperous 2021.

Best
Spl183

Spl183

27th Jan '21

Thanks @gari
Haven't as yet used and only just transferred over some funds. Did also open up an IBKR account too and must say it has a v impressive range of stocks, can do same do deposits to a UK account and also can change balance currency direct which is cheaper too. Worth opening an account - was quick too.

Best, Spl183

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DoubleT

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