Best tool to buy US shares?

[arnies]

What is the easiest/cost effective way to buy US shares?
Asb/Anz have quite high fees, and I've heard a bit about eTrade. What do I need to know about etrade before using them?

What do you guys/girls use?

[boring]

Hi Arnies,

I use OptionsXpress (www.optionsxpress.com.au) as my main US broker. I believe they also cater for NZ residents because their terms and conditions say "The customer warrants that it is an Australian or New Zealand resident or citizen ...".

OptionsXpress are owned by Charles Swab. The advantage I find with this broker is that you can buy both shares and options in the NYSE and NASDAQ markets. When you transfer money into your brokerage account, it is converted and held in US dollars. It's about US $15 for a stock transaction.

It's important to note that most of their literature on their web-site is very trader-centric. I'm a old school long-term buy and hold investor and have found their service to be perfectly suitable for me. I do also buy a couple of LEAPS every year, but again, these are stock options that span up to 2 years in duration.

I absolutely love investing in the US stock market, can't imagine life without it and totally love the sheer volume of choice when it comes to finding companies to invest. I can also attest that OptionsXpress electronic documentation in terms of dividend notices, statements, trade confirmations etc are superb.

For disclosure purposes, I have only been with OptionsXpress for 3 years now. I was force to transfer my significant US Holdings to them when TD Ameritrade decided they no longer wanted to hold brokerage accounts for Australian residents. That was a pain in the butt, because I had been with TD Ameritrade for almost 20 years and had built up a sizeable portfolio.

I don't know if they will be the best option for you, but at least it IS an option (OK, enough with the lame puns).

[jeronz]

Sorry for replyling to an oldish thread

I too have been using optionsxpress and am also a buy and holder (of ETFs). I have been fairly happy.

The only issue is with money transfer which is a huge pain if you want to avoid fees. The easiest way is to wire money but then you are stuck with the horrible bank bid-ask spread and their commission.

To avoid too many fees this is one solution that I have done:
1. Set up an Australian bank account (commbank - as I am already with asb this was fairly easy)
2. Set up an nzforex account https://www.nzforex.co.nz/
3. Transfer money to your Australian bank account via nzforex (optionsxpress won't accept money if it isn't coming from an account under your name, so you can't transfer via nzforex directly unfortunately)
4. Transfer money from australian bank account to optionsxpress

How have you been doing it boring?

Another (possibly better) option is http://www.halifaxonline.co.nz/
They have just very recently opened up in NZ (base is in australia)
I have only just opened up an account, but I am having some technical difficult and so haven't transferred any money yet.
It seems far less easy to use than optionsxpress. It is possibly more day trader focused. There is not the information about securities that optionsxpress gives you that a long term investor looks at. Although you can easily get all the info on yahoo or bloomberg.

There are several advantages to using halifaxonline that I can see.
- slightly cheaper than optionsxpress (USD13.50 vs USD15.00)
- there is an NZ base and apparently all you have to do is transfer money into their westpac account, and they use nzforex to get the money over to Australia.
- It appears that you have access to more markets, 36 markets worldwide (including the ASX but not the NZX), versus just the US exchanges with optionsxpress

[voltage]

Interesting comments, as you say very trader focused. What do you think about etrade. They charge .6% for global stock. Very hard to find a cheap alternative for the long term investor who wants to do the odd trade. After reading about efts and vanguard I want to have a cheap way to purchase these. Comments appreciated

[boring]

Interesting to read your comments on OptionsXpress, Jeronz.

I live in Brisbane, so funding my OptionsXpress account is a simple Bank-to-Bank transfer between Australian banks, so I only have to endure the bid-ask spread when they convert AUD to USD. To have to endure 2 legs, NZD-to-AUD and AUD-to-USD must be a real pain.

I did look at buying US shares using my CBA account (opening a CommSec a/c), but Comm Bank charge something like a whopping $65 brokerage for US shares.
I also found Halifax Online in Australia, as well as Saxo Bank to be more trader focused. And their brokerage fees looked more attuned for a high frequency of trades.

I much preferred the OptionsXpress platform.

[voltage]

Out of interest how are the shares held at OptionsXpress, custodial? And is this for us shares only. Thanks

[boring]

Yes, stock positions are custodial. Dividends will be automatically credited to your account (USD denomination). All stock holder communications will be delivered via your brokerage account.

You can trade stocks, ETFs, options, futures and bonds with OptionsXpress. It does appear to be limited to the US exchanges.

[voltage]

Thanks boring. So to buy US shares OptionXspress looks very good. Australian shares etrade.com.au looks good and nz there is not much choice. To keep things simple where I just want to add to mainly global etfs some shares on the asx and nzx what is your suggestion. Full broker is 1%. Do I really want 3 accounts?

[mp52]

Interesting thread. Similar situation here... looking to buy some Vanguard ETFs here too and would prefer to avoid the double currency risk of buying on the ASX.
I have an OMCA with ASB. Haven't looked deeply into it but what are the issues with buying ETFs on the NYSE through that? Is it just higher brokerage and FX fees? Limited ETFs available for purchase?

[voltage]

Really it is not double currency risk. it is just taking risk away from NZ according to a leading financial planner. I thought of opening an account with trade.com.au - brokerage .11% and close to home without making life too complicated. You can buy on other exchanges for around .6% brokerage and custodial fees are low. My hesitation at the moment is with vanguards global you could have death taxes on over $60000. Have not sorted this out yet. I do find NZ so far behind on what is offered here. This is an interesting thread.