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View Full Version : Local vs overseas broker - insights and implications?



meoverhere
18-08-2012, 12:35 AM
Hi all,

I suspect this could be helpful to many people starting out but having spent quite some time studying brokers and their offerings, I have narrowed the list down to two. One in NZ and one in the USA.

The fors' and against' so far seem to be:

USA broker is very large and reputable with large financial backing
NZ broker is not as large and not as transparent

USA broker has average spreads of 3.0
NZ broker has average spreads of 5.0

USA brokers charges are spread only
NZ broker charges spread and also charges 1% margin for open positions overnight

USA broker can trade as little as $1
NZ broker can trade as little as .01 (what would that be in $)

So far USA is the clear winner but...

It costs to transfer money from USD back into NZD. (I guess anyway... can anyone say more on this?)
NZ broker is in NZD which bypasses this extra charge

How does the tax work - just pay on the money I bring back to NZ account or on the gains in the US trading account?
- also does it make tax more complicated that the gains were in USD? Shasta?
For the NZ broker, I guess it would be on the profits in the account.

So which would be the best financial choice -
USA broker with smaller spreads but conversion hit or NZ Broker with larger spreads and 1% each night on open positions?

Has anyone got anything else to add to this? Did I miss something? Is something going to bite me?

Whew I feel great to get those questions out!

TIA for any input all,

Awesome,

Jono