Investing in U.S Stocks without fees
I tried out two new ways for Australians to invest in international stocks
Compared to the U.S, Australians have to put up with some pretty ridiculous brokerage fees. But things look to be changing. I’ve been trying out a couple of new apps that let you invest in U.S stocks without any commissions.
eToro
eToro has been around for a long time (since 2008) but in the last year they have added real stock trading for Australians. Using eToro you can invest in U.S listed stocks (think Apple, Tesla etc) without commissions. When you buy these stocks on eToro you are buying the actual stock and not a contract.
You can find out more about eToro’s stock offering here
Stake
Stake is very similar to eToro but they are a newer app. They have been around for a few years, but I’ve only started using the app recently. While the app can be a little buggy at times, the actual product is really good. You can invest in a huge selection of U.S stocks and you don’t pay any commissions on trades.
You can get a free Stock on Stake here
How do these platforms make money?
If they don’t charge commissions how do they make money? Well when you transfer funds into eToro or Stake your AUD (Australian Dollars) are converted into USD (U.S Dollars). Both eToro and Stake make a small profit on the exchange. This fee isn’t really noticeable.
Once your money is in either of these platforms you can open and close as many trades as you want without getting charged any fees.
I’m currently experimenting with a couple more trading apps that offer zero commission trading. Unfortunately we’re not going to see an app for ASX listed stocks. The ASX has a monopoly in Australia so there is no reason for them to lower their fees.