Thank you from stocktube.blogspot.com
Some of you asked how on earth a non-U.S. citizen can open an account with the intention to invest U.S. stocks or to trade its options. The facilities to do so were there for years and the process was simple. It just that after the tragic Sept-11 incident the U.S. government has put on multiple processes in between to prevent money laundering or something similar from happening again. If you do not already know, just before Osama bin Ladin launched his attack on America, he was believed to have bought tons of “Put Options” on U.S. optionable stocks. As a result he made great fortune when the stocks plunged.
While there’re many brokerage houses offering you the facilities to trade the U.S. equity markets, they’re equally different in terms of their offerings. These brokerage houses also act as the market makers who while trying to make money from you, they also compete among themselves for that piece of commissions. If you do not know that competition breeds benefits and lower cost of doing business, chances are you’re living under the coconut shell.
If you’re not a citizen of USA, then you’re an alien (no jokes). And as long as you’ve internet access, basically you can trade not only stocks or options but also forex, futures and bonds from over 70 global markets using a single account from such brokerage firms. That’s why countries such as Malaysia and Singapore have miles of catchup to do when you talk about financial globalization. Among the providers include TD Ameritrade, Scottrade, E*Trade, OptionsXpress, InteractiveBrokers and so on.
One of the reasons that I’m holding from writing an article about brokers is due to the fact that every traders or investors have their own preference – one’s meat could be another’s poison. Of course the other reason was the request from a reader who has not trade U.S. equity markets before slipped off my mind (and for that I apologize). Long story short, my preferred providers are InteractiveBrokers and OptionsXpress. Let’s talk about InteractiveBrokers.
Why InteractiveBrokers?
InteractiveBrokers provide you the best pricing based on “Smart Best-Execution Routing” which means essentially it searches for the best stock or options prices available from all the market makers out there – so that you don’t overpay.To apply via InteractiveBrokers, click on Individual Application form. Due to the multiple steps in applying for an account, I’m not going to show each of them here. There’re mainly 4 major processes of which each of them will have more mini-steps:
I know it’s a tedious in opening the account but it’s better than fly yourself to the U.S. and subject yourself to body searches at the immigration. As for the funding, you can “TT or Wire” the money (do the USD-Ringgit conversion please) to IB together with several pieces of information that you will get after going throught the steps in online application. That’s why the Funding is the last step within the procedures.
Some of the brokerage houses try to attract you with minimum US$500 as the requirement to start an account but seriously it’s not sufficient. And if you plan to trade Google Inc.’s option, don’t even think about such amount. As for OptionsXpress, all I can say is this broker house provides probably one of the best features and tools in the industry. Depending on number of contracts you trade per month, your commission starts from US$12.95 a contract. Now do you understand why I mentioned earlier that InteractiveBrokers provides the lowest commission? Nevertheless if you prefer rich functionalites and nice-looking charts, then OptionsXpress is your choice. But I’ve to warn you that your trades might not get filled at the desired price because it’s web-based and any slow internet bandwidth will only worsen the situation. I particularly love their support which is in the form of "Live-Chat" - it's superb.
So which one should you choose - InteractiveBrokers or OptionsXpress? It depends on what you need and mandatory requirements. If financial allows, why not open an account with both?
Thank you from stocktube.blogspot.com
Globalization seems to be the magic bullet which is slowly but surely taking its effect on everyone including the world of stocks investing. When I first started StockTube about slightly more than a year ago, I wasn’t too sure if I should write about the hidden opportunity in investing not only stocks but also option from the world’s largest equity markets – the United States. Since then I’ve received great response (surprisingly most of the readers decided to send me private email instead of using the comment section) particularly the mechanism of option trading.
One thing leads to another and due to overwhelming requests (I was bombarded with emails for related articles for quite some time) I’ve written the article on which broker to choose and how to open a trading account. Surprisingly I continue to receive emails from readers (who can blame them *grin*) asking me how to fund their accounts. Hey! I thought funding the account should be a straight-forward process that the local banking institutions have no problem executing. Isn’t it strange that Malaysian local banks such as Maybank and Public Bank do not know how to do simple TT (Telegraphic Transfer) to USA? But then maybe it only affects certain branch(s) of which their officers have not done such a high-tech procedure before *evil grin*.
As such, I’m publishing this short article on steps to fill in the “Application for overseas remittances” form or most of you would refer it as “TT form” (applicable to Malaysian investors only). The example below is based on Malayan Banking Berhad’s (KLSE: MAYBANK, stock-code 1155) form. Take note that this form might have changed. Other financial institutions that offer such facility should have different form but the basic fundamental of the contents should be almost the same. Here’s the extract of the form (I’ve ignored the rest of the no-brainer particulars within the actual form).
The steps listed below correspond to the numbers within the image above:
Particulars of Applicant:
Particulars of Beneficiary (the most important):
Particulars of Bank Beneficiary (important):
Amout to be remitted to beneficiary:
That’s almost all you need to fill with the remaining to be taken care by the bank’s officer. If your local bank officer still scratching his/her head while giving you a clueless look, it’s time to kick his/her butt. Let me know if this article is useful to you, will ya?
Related posts: Which Brokerage and How to open a trading account?
