When you’re looking to start buying US stocks in UK, there are a few things you need to understand first in order to make the process as smooth and efficient as possible; whilst eliminating any last minute surprises as far as stock taxes go!
Within this guide, we have broken down the essentials, alongside the ‘nice to knows’ that will aim to help you on your path to a better US stock investing experience.
Buying US Stocks in UK : The Essentials
To get started with buying US stocks in UK, you will need access to the market and a good source of information you can rely on to keep up to date with market trends. This information will help you understand some of the fundamentals of what you are interested in.
In order to gain access to the market, first you’ll need to find a broker that is regulated by the Financial Conduct Authority (FCA). This will ensure that your broker is reputable and trustworthy and covered by the FSCS.
You’ll need to research the best stock brokers in the UK to find one that suits your needs; whether that be trading stocks. investing in stocks, or buying stocks in a stocks and shares ISA, we have broken down some trusted options that you can jump to in the section below.
Buying US stocks from the UK can be a bit tricky if you are not familiar with the process. that being said, some of the best stock trading platforms in the UK make that process significantly easier than it used to be.
We are going to start here with a few of the best stock brokers in the UK, before delving more into the details of various US shares. If you would like to jump straight to a specific section, use these quick navigation links below:
Best UK Broker For US Stocks
eToro – FCA regulated with a huge range of US stocks in UK available
eToro is a social trading and investment platform that offers users the ability to trade stocks, cryptocurrencies, ETFs, and more. eToro is regulated by the FCA and is a popular choice for buying US stocks in the UK.
With etoro, you will find that there are many different US stocks available for purchase, with varying levels of spreads and costs. One thing to keep in mind when purchasing US stocks through etoro is that not all US stocks are available, even if many are.
You will find the vast majority of major US indexes and stocks available to you on eToro UK but do not worry about being overwhelmed. Some etoro users prefer to stick with only the most popular or well-known US companies, while others enjoy exploring more niche investments that might offer higher potential returns.
Also, if you are interested in following the stock trading strategies of other successful traders, you can do so on eToro social trading.
Roundup of best UK stock brokers top 3
Hargreaves Lansdown is one of the largest investment platforms in the UK. They offer a wide range of investments including stocks, ETFs, and more. Hargreaves Lansdown is regulated by the FCA and is a great option for buying US stocks in the UK.
Interactive Brokers is a global investment platform that offers users the ability to trade stocks, options, futures, and more. Interactive Brokers is regulated by the FCA and is a popular choice for buying US stocks in the UK.
Various US Stock Exchanges
There are a number of US stock exchanges that UK investors can trade on. The most popular ones include the New York Stock Exchange (NYSE), the Nasdaq Stock Exchange (NASDAQ) and the Chicago Board Options Exchange (CBOE). We have broken down the details of the various US exchanges separately for those who would like to know more.
UK investors can trade on these exchanges through a number of different brokers. When choosing a broker, it is important to consider factors such as fees and commissions, trading tools and platforms available, educational resources offered, and customer support services.
Regardless of which exchange or platform you choose, there are a few key tips that can help you succeed as a US stock trader from the UK. These include doing your research, developing a disciplined trading strategy, and carefully managing your risk exposure. With these tips in mind, you can start buying and selling stocks in the US market as soon as you are ready.
How To Trade US Stocks Safely – Use an FCA Regulated Broker
To buy US stocks in the UK, you’ll need to open a brokerage account with a one of the UK stock brokers that offers access to US markets but it is important to be aware of the different regulatory regimes between UK and US stocks.
The main regulator for financial markets in the UK is the Financial Conduct Authority (FCA). In contrast, the primary regulator for US financial markets is the Securities and Exchange Commission (SEC). There are some key differences between these two agencies, which you should be aware of before investing in US stocks. We have linked to an article above that delves a little more into the specifics of financial regulators.
In short (pardon the pun), the FCA imposes stricter rules around short selling than the SEC. This means that if you’re considering selling a US stock short, you’ll need to be sure that your broker is able to do so.
If you are opening an account with one of the stocks CFD brokers UK has available, you will likely not have any issue with this at all; but a direct market access broker will not provide the same flexibility in most cases. You also cannot short sell from within a stocks and shares ISA account.
The stock market regulation itself is what is important for the regulation of the underlying companies, or in this case the US stocks themselves. Whilst the companies are regulated by the SEC in order to be listed, the regulation that you will need to ensure that your stock broker has if you are in the UK is FCA.
Do not trade, invest, or consider buying US Stocks in UK with a broker that is not FCA regulated.
How to decide between investing, trading, and buying US stocks in UK?
There are multiple ways to get involved in the US stock market, and the way you choose will likely be determined in large part by your timeframe, and motivation. Buying and investing in US stocks are largely one and the same, whereas trading CFDs of US shares is usually quite different.
Long term versus short term intentions, and whether you want to potentially short a stock would be high up on the list of things to consider. We have broken down in a separate guide some of the key differences between CFD vs invest type market access which you are free to delve into for more detail.
If you are looking to trade US stocks from the UK, there are still a few different options available to you.
One popular choice is to use CFDs, or contracts for difference, which allow you to trade on the price movements of stocks without actually owning them. Another option is to invest in US stocks futures or options trading through an online broker.
Whether you choose CFDs or an alternative method to trade US stocks, it is important to do your research and choose platforms that offer competitive fees and high-quality services.
Ultimately, the best way to determine which platform is right for you will depend on your individual trading needs and strategies. So be sure to carefully consider all of your options before making a decision about where to trade US stocks from the UK. Now let’s look into some of those strategies that may determine your market access type.
US Stocks Trading Strategies
Whether you are a seasoned stock trader or just getting started in the world of investing, understanding US stock trading strategies and finding the best US-listed stocks to buy is crucial for success.
There are many factors that can affect the performance of stocks, such as market trends, economic conditions, and geopolitical events, so it’s essential to stay up to date on the latest news and trends in order to make informed investment decisions.
One popular strategy among traders is to focus on buying US stocks that are performing well and selling those that aren’t doing as well. This approach involves closely monitoring market movements and using available data and analytics tools to identify trends before they become too big to ignore. This is called trend following.
Additionally, investors may also want to consider looking for stocks that are trading at attractive prices and/or have strong fundamentals, such as a high return on equity (ROE) or a low price-to-earnings ratio (P/E). This is referred to as value investing.
Of course, there are many other strategies that traders can use to try to make money in the stock market, and it’s important to find one that suits your individual goals and risk tolerance.
Additionally, it’s worth noting that US stocks tend to be more volatile than stocks from other countries, so it’s important to be aware of this before making any investment decisions. This volatility can in fact help you with certain stock trading strategies.
Scalping Stocks Strategy
If you’re interested in trading US stocks in the UK, you will want to know about scalping.
Scalping is a type of trading that involves buying and selling stocks within a very short time frame, typically just a few seconds or minutes.
While scalping can be profitable, it’s also risky. Because you’re trading so frequently, you need to be able to make quick decisions and execute your trades quickly. Additionally, you’ll need a solid understanding of market trends and how they can impact the performance of different stocks.
If you’re new to scalping, it’s a good idea to start by practicing on a demo trading platform or broker account. This will allow you to get a feel for how the process works without putting any real money at risk. Once you’re comfortable with scalping, you can begin opening trades with live account.
Just be sure to use a reliable broker that offers low commission rates and fast execution times. This will help you minimize your costs and maximize your profits as with the volume of trades you make, you will not want to pay any extra on costs for the same level of service.
Whether you are buying US stocks from the UK or investing from your home country, there are many resources available to help you find the best stocks ((( needs a link to best stocks hub ))) for your portfolio. For example, online stock trading platforms and financial news publications can provide valuable information on market movements and key performance indicators, while also offering access to data analysis tools that can help you identify trends and make informed decisions.
Best time to buy US stocks
One of the more interesting factors to consider when looking for the best time to buy US stocks is timing, both seasonality trends and times during the day can be relevant.
Certain times of year may be better than others for trading US stocks, depending on market conditions. For example, many investors believe that the best time to buy US stocks is during the so-called “January effect.” This is when stock prices are typically low after the holiday season and before earnings reports are released.
The time of day can also be important. For example, many traders prefer to buy stocks early in the trading day, when there is more liquidity and prices may not have moved too much yet. During lunch time, volume can dip and prices may be more volatile.
US stock markets are some of the most liquid markets around, and this can work to your advantage for multiple reasons. The average volume traded on US stock exchanges each day is typically much higher than the FTSE. This means that if you’re trading US stocks in the UK, you’ll need to be aware of the different trading volume and liquidity levels.
Additionally, you’ll need to be familiar with the trading platforms and tools available in each market, as the trading environment can vary significantly from one country to another. Two of the main US stock exchanges are the most liquid of all global exchanges. You can find the full list of top 10 stock exchanges sorted by trading volume here.
Advantages to trading stocks that are highly liquid
There are many advantages to trading on a highly liquid market like the US stock market. For one, it is easier to buy and sell shares quickly and at a fair price. This is because there are more buyers and sellers in a highly liquid market, so there is less chance of being “stuck” with a stock that you can’t sell.
Another advantage of trading on a highly liquid market is that you can more easily take advantage of opportunities as they arise. If you see a company whose stock is undervalued, you can buy shares quickly and without having to worry about finding a buyer later. Similarly, if you need to sell shares for any reason, you can do so without having to wait for someone to make an offer.
Finally, trading on a highly liquid market can result in lower trading fees. Spreads are typically smaller in liquid markets, which means that you will pay less to buy and sell shares. This can help boost your overall returns over time, as you are able to keep more of the profits from your investments.
Overall, trading on a highly liquid market like the US stock market has many advantages. It is easier to buy and sell shares, you can take advantage of opportunities as they arise, and you have more flexibility in your investment strategies. If you are looking to invest in stocks, the US stock market is a great place to start.
Tax on US stocks as a UK investor
Another consideration when buying US stocks from the UK is taxes. When you buy stocks on a foreign exchange, you may be subject to both capital gains tax in the UK and US taxes on your profits.
However, there are ways to minimize your tax liability, such as using a stockbroker that offers tax-efficient accounts or by using spread betting. Spread betting involves betting on the movement of a share price without actually owning the shares, which can reduce your tax bill. See an article we have done on spread betting vs CFD trading to give you more details.
Additionally, it’s important to note that the UK has different taxation rules for dividends and capital gains than the US. This means that you may be subject to different tax rates on your profits when investing in US stocks. Be sure to speak with a financial advisor or tax specialist before making any investments, so that you’re aware of the potential implications.
Despite these considerations, buying US stocks in the UK is still possible and can be a great way to diversify your portfolio. Just be sure to work with an FCA regulated stock broker who has longevity and a solid reputation, and before investing make sure you’re aware of the tax and other implications involved.
One way to gain preferential tax treatment on stocks is to buy them within an ISA.
Stocks & Shares ISAs for tax free US stocks
Stocks & Shares ISA accounts can be a great way to invest in US stocks within your government allowed tax free allowance. For 2022/23 the tax free ISA allowance is £20,000 for a single person, or up to £40,000 for a couple.
ISA accounts can be a hugely beneficial way for you to gain access to US stocks in UK without as many liabilities or complications. One thing you will need however is a broker that offers a stocks and shares ISA account in the UK that allows you to invest in US stocks.
With many different options available, finding the best ISA accounts for investing in US stocks can be a bit overwhelming.
Best Stocks and Shares ISA Accounts To Buy US shares in UK
Some factors to consider when choosing an account include fees and commissions, investment choices, and whether or not there are any restrictions on buying or selling specific securities.
Vanguard Stocks and Shares ISA account
One popular option for investors looking to buy US stocks from the UK is Vanguard stocks and shares ISA account. This account offers low fees and commissions, as well as access to thousands of different securities. There are also no restrictions on buy or sell orders, making it easy to manage your portfolio as market conditions change.
Interactive Investor Stocks and Shares ISA
Another strong option for buying US stocks in UK is Interactive Investor. This account offers a wide range of investment choices, including stocks, options, ETFs, and more. With competitive fees and commissions, this is a great choice for investors looking to build a diversified portfolio.
Fidelity and Hargreaves Lansdown are also popular options for buying US stocks in UK, offering a range of investment choices, low fees, and easy account management.