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My first post in 2020..lol. Still confinding myself to my own home and avoid going out to crowdy places in the current post recovery Covid19 timeframe. The stock market aka Wall Street is going uptrend while the Main Street is starting to see recessionary effects. (you now can see some of the restaurant and shops never re-open, as the strain of remaining close for the last 2 months or so while needing to sustain business cost such as rental, employee salary is just too overwhelming).
Rubber gloves are soaring to meteoric and dizzying prices :- some roughly 800%-1000% gains making companies such as TopGlove, Supermax, Harta, Kossan gaining additional BILLIONs of their stock market capitalization.
Digressing from the topic,
So how to buy US stocks in Malaysia:
1. Open foreign stock trading account thru our local brokerages: CIMB, Maybank, Ambank, etc.
Pros:
- You can get 1:1 in person support from remisier or broker representative to answer and questions.
Cons:
- You need to do the necessary "paper" work. (dont notice any online sign-on)
- Very high brokerage fees in Malaysia making it not suitable to day trade or buying US stocks in small amount. Roughly >USD25 per trade (regardless of buy and sell)
- Cannot do short selling (yes, i know most Malaysian will be very happy if we can do the true short-selling and NOT our "fake" BURSA restricted short selling...hahaha or trade in more exotic investments such as options, ETF, forex.
- No real time stock price feed available
- Conversion rate from MYR to USD might not be so good. (you first need to convert your money to USD before you can trade US platform. And in some of the local brokers, you might need to convert to some intermediary currency first like SGD.
2. Directly open an international/US stock brokerage account (Etrade, Ameritrade-Schwab, InteractiveBrokers, RobinHood ). **Unfortunately, Robinhood is not open to non-US residents...
Pros:
- Everything is done online (KYC, deposit transfer) and in a very speedy manner. And it is easy too. A new account can be opened within just a 3-4 days, provided of course you did your homework and gave them all the necessary legal KYC documents.
- Brokerage is very very cheap and lower. It can be like around USD1 to USD7 depending on broker.
- Live feed - depends on platform, either you need to pay or is free. Usually free means higher brokerage fees. (people need to earn money mah! Of course except the innovative "RobinHood". Go google on how they make money thru zero brokerage commissions).
- Conversion rate is very good in some platform. Note: I only observed a few platforms.
- Can trade multiple investment instruments: Options, Forex, ETF, etc.
Cons:
- You might need to do some searching yourself on how to do everything online. Usually, the platform's online chat is very helpful to resolve most of your issues.
- You might need to overcome your "online" fears whether it is secure or not as most of this platforms are not from Malaysia. Hence always put your money and trade with the well established names like what i described earlier.
So instead of reinventing the wheel:
Here is a good guide by a fellow Malaysian (I assume), Jerry Ng on the step by step way to open a international/US stock trading account. Credits to him.
Interactive Brokers
ETRADE
Will not go into deeper details on the comparison between Interactive Brokers vs Etrade platform for the time being. If you do have a questions, do feel post in the comments! If i know the answer, i can help to answer, else..it is Mr. Google. :)
