US Market Better Than UK for Beginners?

[NickElliott 10]

Hi everyone,

 

I'm Nick and I'm a newb. I am starting out and would like to trade equities using a mix of technical/fundamental analysis. I've heard that the US markets are much cheaper that the UK markets for starters because of the structure of the brokerage fees? Am I right in the thinking the UK brokers charge a flat fee of around £10-£15 per trade? If so, compared to the 1c per share cost of American brokers I am leaning towards starting out over there while my volume is still low. I don't like the idea of having to jump 1.5-3%% just to recover the cost of the trade!

 

How does this affect tax, currency conversions etc - can anyone help me out? What are the advantages of starting out in the UK?

 

Thanks!

[BlowFish 10]

You fill out a form W8-BEN and pay tax in the UK. (search on that term and it will tell you more). Currency conversion will vary broker to broker, my main one is Interactive Brokers. They maintain a 'base' currency plus you have a balance in any other currencies you trade in. You can move funds between them through there platform (at the live market rate). It's pretty darn flexible. http://www.interactivebrokers.com/en/accounts/universalAccount.php?ib_entity=llc

 

Can't really think of any advantages starting out in the UK but it's pretty much a global market evaluate the offerings without too much regard to the territory. (Though you want to know you can get adequate support here in the UK).

[guyber 10]

Stamp duty is also an issue in the UK: 0.5%, which really adds up, especially since most international markets don't charge it. See: Tax on buying shares : Directgov - Money, tax and benefits

 

In the US you pay a small SEC fee when you sell, but it is minuscule by comparison (well under 0.01%).

 

Also, purely in terms of data (price data but especially fundamental), you get more and cheaper data in the US, compared to the UK. You can get near-institutional quality of fundamental data for a retail price in the US: it is very hard to find that in the UK.