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Is buying US stocks in Singapore a good idea? I mean, during the pandemic, many of us have realised how important it is to support local businesses, so shouldn’t we support our own stock market?
But when it comes to investing, trading US stocks can be key (like through an online broker such as moomoo). You see, trading only on the Singapore Exchange (SGX) could not only make you miss out on opportunities, but could also be riskier if you are not diversifying your portfolio!
Like it or not, Singapore companies are swimming in a tiny pond. The biggest names on the Straits Times Index (STI) include companies like CapitaLand, DBS and ComfortDelGro, that the average person outside of Singapore has never heard of. By contrast, on the S&P 500 (which you can trade on US exchanges NYSE and Nasdaq), you can find truly big (and international) names like Apple, Microsoft and Amazon.
The good thing about trading US stocks is that you don’t need to be physically in the US to trade them. All you need is an online trading platform like moomoo (Futu Singapore) that provides access to overseas markets including the US.
From my personal experience, I also find that using an online broker like moomoo to trade US stocks is also more nimble than when I trade through my bank, not to mention lower fees, as I can get $0 commissions on US stocks forever through moomoo — more on that below.
How to start buying US stocks in Singapore?
The first step to buying US stocks is to sign up for a broker and online trading platform that offers access to US markets.
The moomoo trading app is one of the popular online trading platforms for buying US stocks. We’ll use it to demonstrate the sign up process and how to trade US stocks in this article.
Firstly, signing up for an account can be done in a few minutes. Just download the moomoo mobile app and complete the sign-up process, and then wait for account opening confirmation. Once that’s done, you can top-up your account and start trading right away.
Once your account is all set up, you can access US market data and trade US stocks via the moomoo desktop or mobile app. Don’t worry, you can also access the Singapore stock market and other key markets.
Then, simply search for a US stock you’re interested in, enter the details of your trade, like price and quantity, and click submit, and the platform will execute the trade according to your instructions.
Take note of US trading hours
Do note that one way in which trading US stocks differs from trading Singapore stocks is the trading hours. Regular trading hours for US stocks are from 9.30am to 4pm Eastern Time (ET). This means for us in Singapore, it’s 9.30pm to 4am or 10.30pm to 5am, depending on whether there are any daylight saving hours. The great thing about moomoo is that the platform offers extended trading hours from ET 4am to 8pm (that’s currently 4pm to 9am in Singapore time), which makes trading on US markets easier for those who are not night owls.
Buying US stocks: Fees
When buying US stocks, there are several fees and charges to look out for, including the following:
- Broker’s commission – around US$18-$25 for banks and US$0-$15 for online brokers
- Platform fee – varies according to broker
- Settlement fee – 0.003 USD per share (up to 7% of trade value)
- SEC Membership Fee when selling – 0.0000051 of trade value (min 0.01 USD per trade)
- FINRA Trading Activity Fee when selling – 0.00013 USD per share (min of 0.01 USD, max of 6.49 USD per trade).
As a small-time trader, I tend to rely on smaller price movements and buy lower-priced US stocks. Thus, having as low a commission as possible is important as it makes a difference to my (small) gains from the low volume I trade.
moomoo now offers a lifetime commission waiver on US stocks*, meaning you pay zero broker’s commission!
In addition, moomoo’s commission-free US trades last forever* do not need to be activated. All new and existing eligible clients automatically receive commission-free US trades for the rest of their lives.
To sweeten the deal, moomoo also charges some of the lowest platform fees on the market, as follows:
|Market||moomoo platform fees|
|US||Free for first year, thereafter US$0.99 per order|
|Singapore||0.03% of transaction amount (min. S$0.99 per order)|
|Hong Kong||HK$15 per order|
In addition, each time you successfully refer a friend, you’ll get a free Nio share plus 90 days’ worth of commission-free Singapore and Hong Kong trades.
Buying US Stocks: Tools
moomoo doesn’t just give you access to US markets, but also gives you a suite of in-app functions to make trading and research faster and more efficient.
For instance, moomoo’s analytical tools include various types of charts and technical indicators that help traders of all levels extract the information they need to make the trading decisions. Spotting trends on the platform is easy as it lets you visualise companies’ capital flows.
The platform also publishes various ratings and findings from researchers as well as graphs which help you make more informed decisions based on professional analysis and data.
Other tools include smart reminders and conditional alerts which you can programme and which notify you whenever certain conditions are met.
Another useful tool is the customised stock screener, which helps you find new stocks based on your requirements.
moomoo also offers various promotional in-app coupons. For instance, you have the chance to receive stock cash coupons which give you cashback, credited to your account, when you trade US stocks.
Trading US Stocks: Options
One unique aspect of trading in the US market is that you get access to options. Options are a type of derivative product based on that of an underlying asset like a stock.
An option gives you the right to buy or sell a specified amount of the underlying asset by an expiry date. If the price moves in your favour, you can buy the underlying asset and make money. Otherwise, you lose the money you’ve paid on the option. Think of it as buying or selling insurance premiums on the guaranteed trading price of the underlying asset.
Some traders use options to hedge against the risks in their portfolio. Options also let you go long or short on the market, which enables you to bet on the price movement of the asset. Advanced traders can also trade on leverage, which can give you more exposure but also increases your risk.
You can trade stock options on moomoo at a commission of $0.65 per contract, while enjoying $0 real-time quotes.
Enter the US market with moomoo
Futu SG (moomoo) is offering lifetime* commission-free US stock trading to all new and existing eligible clients, with no strings attached. New eligible users also enjoy a one-year waiver on platform fees.
To start trading US stocks at $0 commission, download the moomoo app and set up an account right away.
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*Terms and Conditions apply