If you are interested in diversifying your investment portfolio by trading foreign stocks, you will need a broker that offers international trading capabilities. Not all brokers provide access to foreign markets, so it’s important to choose one that does to maximize your investment opportunities.
Here are some of the top brokers for international trading and key considerations to keep in mind when trading foreign stocks.
How to trade foreign stocks
Many American investors can access foreign stocks through American depositary receipts (ADRs) listed on U.S. exchanges. However, to trade directly on foreign stock exchanges, you will need a broker that offers this service. This allows you to buy stocks in their local currency and access a wider range of investment opportunities.
Trading foreign stocks comes with risks such as currency fluctuations and regulatory differences. It’s important to understand these risks before investing in foreign markets.
- Currency risk: Your investment is subject to changes in the foreign country’s currency value, which can impact the value of your investment.
- Regulatory risk: Differences in governance policies and regulations in foreign countries can affect your investment.
Despite the risks, investing in foreign stocks can offer unique opportunities for diversification and potential growth.
Best brokers for international trading in 2024
Interactive Brokers
Interactive Brokers provides access to markets in 34 countries and territories, allowing you to trade a wide range of international stocks. The broker is known for its trade execution quality and comprehensive trading platform.
With Interactive Brokers, you can trade U.S. stocks as well as international securities on their Pro and Lite tiers, the latter offering $0 commissions.
TradeStation
TradeStation Global account offers access to international markets in 34 countries, powered by Interactive Brokers’ platform. You can use TradeStation’s tools along with Interactive Brokers’ trading platforms.
Fidelity Investments
Fidelity provides access to 25 markets, including major countries like Canada, Germany, and the U.K. You can settle trades in local currency and trade U.S. and foreign stocks in the same account.
Charles Schwab
Charles Schwab allows you to trade ADRs and foreign stocks in over 30 countries. You can also trade directly in local currency in 12 markets with a Schwab Global account.
Moomoo
Moomoo offers a unique option for trading Chinese stocks, including Hong Kong stocks and China A-shares. The broker also provides competitive rates for margin loans.
Bottom line
Exploring foreign markets can uncover hidden gems and potential investment opportunities, but it’s essential to be aware of the risks involved. Choose a broker that offers international trading capabilities and conduct thorough research before investing in foreign stocks.