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Saturday, 10 February 2007

Australian Online Brokers for OS Trades

James recently asked:

Are there any online Australian share brokers that you recommend? Ones that you know of that have a wide range of both Australian and International shares? Ones with low overhead and low fees, while still being trustworthy?

While I don't know about all the online brokers, I have used a couple of Online Brokers for overseas trades that have provided statisfactory service at a reasonable cost.

For selling some HK shares (that used to be listed on the ASX but later delisted from the ASX and only traded in HK) I was originally going to use ComSec - but after opening up an account for OS trades (via their arrangement with Pershing in the US) I found out that they were unable to register my certificated HK shares (HK is moving to an electronic system similar to the Australian CHESS system, but lots of stock certificates are still in existence and need to be converted to electronic registration if you are going to trade them via the 'net).

Because of this difficulty I then opened up an Online Broker account with HSBC Australia. They processed by certificated HK shares without any problems and I was able to then trade them via my HSBC broking account on the 'net. However, HSBC has since got out of the Broking business in Australia, so my HSBC broking account is now with E*Trade Australia, which has improved its overseas trading system to cater for the HSBC clients and others.

I do use my ComSec pershing account to trade US stocks directly (see my posts about my "Little Book" Portfolio), and it generally works fine - I've had one occasion where a BUY order was cancelled overnight for no apparent reason, so I had to reenter the trade the next day. Having said that, I'm a long-term investor, and for my "Little Book" portfolio I buy US stocks in parcels of around US$5000 and hold them for 18 months before selling. So I can't say if the Comsec Pershing system would work well if you wanted to do day trading in the US market from Australia...

Overall I can recommend both E*Trade and Comsec for trading OS markets. Your choice would be influenced by whether you had an existing account with either of these for trading Australian stocks, and if you need to link the account to a margin loan. Comsec provides Margin Loans inhouse, and E*Trade allows you to link your account to a margin lender (but I'm not sure if you can still trade online using E*trade and settle using the margin loan).

1 comment:

mOOm said...

I use ComSec to trade Australian shares. There's nothing to stop you opening an account with a US or other broker as far as I am aware. When I first started investing and lived in Aus back in 1997-8 I opened an account with Datek now Ameritrade. I now live in the US and still have the Ameritrade account. I now also have an account with Interactive Brokers. Either is going to be much cheaper than trading through ComSec. You should be able to get money in and out using wire transfers even without a US bank account (which I did have at the time).