Foreign Stocks at Charles Schwab and E*TRADE (2024) (2024)

Trade foreign stocks on Charles Schwab, TD Ameritrade and E*Trade (London stock exchange, Hong Kong, European, Japanese, and international stocks)

Overview of Foreign Stocks Investing

In today's interconnected global economy, there are numerous investment opportunities available outside of the United States. Some brokerage firms, including Schwab, E*Trade, and TD Ameritrade, offer their clients access to foreign stock markets, providing a gateway to high return but high-risk investment prospects. Here's a breakdown of how you can access these opportunities through each of these brokers.

Foreign Stocks on Charles Schwab

Traders using Schwab can open a dedicated global trading account, which grants them direct access to twelve foreign stock markets. Within this account, quotes are displayed and trades are settled in the local currency of each respective market.

The available markets on Schwab include Australia, Belgium, Canada, Finland, France, Germany, Hong Kong, Italy, Japan, Netherlands, Norway, and the UK. This diverse selection covers a total of seven currencies: the Euro, Australian dollar, Canadian dollar, Hong Kong dollar, Japanese yen, Norwegian krone, and British pound.

Remarkably, Schwab does not charge any fees for this service, and there is no account minimum requirement. However, opening a global account necessitates filling out a paper form and submitting it to the broker, as there is no online form available. The account's statement is presented in multiple currencies, reflecting the international nature of the investments.

Schwab offers real-time quotes during the trading hours of the twelve foreign markets. The broker also provides specialized representatives who are well-trained in foreign trading. These representatives are available from 5:30 pm EST on Sunday until the same time on Friday.

To assist traders, Schwab's website features a useful video that explains the functionalities of the global account, its potential uses, and the trading features it offers. Additionally, an informative brochure in PDF format can be downloaded, providing insights into the risks and advantages of investing in global markets. The brochure also mentions the availability of trading foreign bonds at Schwab.

The Schwab website further provides comprehensive information on various countries, including Morningstar reports on Canadian stocks that can be downloaded free of charge. Schwab advisors contribute articles covering emerging markets and other regions, offering valuable insights and analysis.

In addition to trading global stocks on their respective exchanges, Schwab facilitates trading in FOTCs (foreign stocks that trade over-the-counter in the U.S.) The commission charged for these securities is relatively high at $54.95. Schwab clients can also trade ADRs (American Depositary Receipts) of international companies, which are priced at the broker's regular $0 commission.

Schwab's commission schedule for international stocks is determined by the currency of the trade, providing a transparent fee structure for traders.

These rates are significantly higher than the $0 Schwab charges for U.S. equities. In addition to the trading fee, the broker also charges a foreign currency conversion fee between 0.20% and 1%, depending on the amount exchanged.

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Foreign Stocks on E*Trade

E*Trade, in the past, used to offer an extensive global trading service. However, the broker discontinued this service in 2015. Nevertheless, E*Trade still provides limited opportunities for trading foreign stocks. Traders can place orders for international equities over the phone. For this service, E*Trade charges its regular commission fee ($0) along with its regular commission for broker-assisted trades ($25). It's important to note that E*Trade executes all orders for international stocks on a best-efforts basis.

The broker's website contains information on global markets, including market data from exchanges such as the Tokyo Stock Exchange, London Stock Exchange, Hong Kong market, as well as Germany, France, and Canada. E*Trade offers research tools for stocks listed on these exchanges.

For instance, if you search for Honda Motor Company on the Tokyo market, you will find the ticker symbol 7267 (the Japanese market uses numbers instead of letters). E*Trade provides comprehensive information about this stock, emphasizing that it is not an American Depositary Receipt (ADR) trading on the U.S. market but rather the actual stock on the Tokyo Stock Exchange.

Details provided about Honda's stock include its 52-week high of 3,675 yen, the most recent declared dividend of 24 yen, and a current market capitalization of 44.8 trillion yen. The stock's P/E ratio is listed as 9.33. E*Trade's website also offers charting capabilities and displays recent news related to any stocks under investigation.

Additionally, E*Trade features an international watchlist where users can track securities trading on Canadian, French, German, Hong Kong, Japanese, and UK stock markets. To add a security, the correct ticker symbol must be used.

The website showcases stock indexes from various markets, including the FTSE 100 and Hang Seng, with a 20-minute delay from real-time. Global market-impacting news is displayed from Reuters, along with information on market movers, such as most actives, % gainers and % losers, as well as net gainers and losers. For example, Sing On Holdings in Hong Kong saw an increase of over 40% on the day this article was written.

E*Trade also offers stock reports from Reuters on select global equities. These downloadable PDF reports from Reuters do not provide buy, hold, or sell recommendations, but they do present the recommendations of other analysts. The reports offer detailed information on the performance history of the stocks being analyzed, along with general data sourced from the company's financial statements.

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TD Ameritrade Have Transitioned to Charles Schwab

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Foreign Stocks on TD Ameritrade

In contrast to the aforementioned brokers, TD Ameritrade does not offer direct access to foreign exchanges. However, the broker's customers can still trade certain securities that are listed over-the-counter (OTC) in the United States, some of which may include foreign stocks.

For instance, Volkswagen AG is available for trading on the pink sheets in the U.S., using the ticker symbol VLKAY. TD Ameritrade provides ample information about the company, including free stock reports from multiple analysts. News from sources such as Zacks, Dow Jones, and BusinessWire is displayed. While annual earnings information is accessible, quarterly earnings may not be available. Additionally, TD Ameritrade allows charting with technical indicators based on the OTC price.

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International Stocks Brokers Recap

Global trading services vary widely from one broker to the next. Remember that commissions can be significantly higher than those charged for U.S. equities.

Updated on 7/7/2023.

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