However, most retail investors who wish to trade US stocks must open a stock account through a broker. The choice of a stockbroker greatly affects the commercial efficiency of investors. A reliable broker helps to make transactions faster and more efficient. So, what is the US stock exchange? How is he different from an American stockbroker? The following article helps readers distinguish between an exchange and a broker. In addition, the report also introduces a list of the best stock trading platforms available today to allow users to deposit, withdraw and trade US stocks quickly.
Table of Contents:
What is the United States Stock Exchange?
U.S. Stocks Exchanges are places where buying, selling, and trading activities take place on the U.S. stock market.
In the past, traders and brokers met face-to-face on the stock exchange to buy and sell stocks. Currently, securities trading activities are carried out via automated electronic tools.
Companies wishing to issue initial shares (IPOs) must do so through the stock exchanges. After being listed on the stock exchange, IPO shares have the opportunity to increase their visibility in the market and attract transactions to participate in the purchase and sale of such shares, through which the company can raise capital for business and business development.
Currently, there are two major US stock exchanges, the New York Stock Exchange (NYSE) and the Nasdaq.
Difference Between a Stockbroker and a U.S. Stock Exchange
Many individual retail stock traders often fail to distinguish between a stockbroker and an American stock exchange.
US exchanges are the place where traders can match orders, so there must be at least two traders willing to execute the same trade, a buyer and a seller, at an equal price. In addition, both parties must have their assets on the stock exchange at the time of the transaction.
Meanwhile, the US stockbroker acts as an intermediary between the investor (the buyer and the seller) and sends orders to the exchange to execute the transaction.
Exchanges only accept orders from individuals or companies that are members of such an exchange. Meanwhile, U.S. stock exchanges only allow citizens or companies with legal status in the United States to register for members.
Therefore, foreign traders/investors (not US citizens) must open trading accounts through brokers to trade US stocks. Therefore, foreign investors often consider a U.S. stockbroker as a stock exchange – a place to buy/sell U.S. securities.
List of the Best Stock Trading Platforms in 2022
The three best and most renowned stock trading platforms currently allow trading of US stocks.
#1 Capital.com
- Certification: Capital.com is a broker regulated by many reputable agencies, including CySEC, NBRB, and FCA. In particular, there are mainly certificates from CySEC and FCA, which are prestigious licenses in the world for securities companies.
- Form of stock trading: CFDs.
- Maximum leverage for shares: 1:20
- Minimum Deposit: Capital.com requires a minimum deposit of $20 when users use online payment or pay by credit card, debit card, or e-wallet. With bank transfers, users must deposit at least $250/time.
- Dividend: Yes
- Commission: No fees for clients when not using leverage
- Number of shares: More than 3600 shares of CFDs
- Deposit/Withdrawal: Capital.com provides many popular payment gateways in each country, such as e-wallets, credit cards, and bank transfers, quickly and easily.
- Trading Platform: Capital.com has its own trading platform designed to be user-friendly, easy to use for investors new to US stock trading, and allows trading on the MT4 platform. It is an exceptional advantage that helps Capital.com meet all the needs and different types of customers.
Although Capital.com allows clients to trade stocks only as CFDs. However, for clients who do not use leverage and do not make stock purchases, Capital.com still pays dividends to users and does not charge overnight fees. Therefore, investors who buy stocks on Capital.com can fully buy and hold shares over the long term without much difference from owning actual shares on the stock exchange. The only difference is that investors do not have shareholder rights, participate in voting and attend shareholders’ meetings.
#2. eToro
- Certification: eToro is recognized and supervised by prestigious and rigorous organizations such as CIF number HE20058, CySEC number 109/10, FCA reference number 583263, which operate and comply with the Financial Markets Directive (MiFID)…
- Form of stock trading: stocks in custody or CFDs.
- Maximum leverage for shares: 1:20
- Minimum deposit: eToro requires 200 USD for the first trade and 50 USD or more for subsequent transactions.
- Dividend: Yes
- Commission: No
- The number of shares: +2400 codes.
- Copy function: Etoro offers you two investment options: traditional trading or copying the results of successful investors (CopyTrading).
- Deposit/Withdrawal: eToro also has many payment gateways, including credit cards (VISA, MasterCard, Diners); Electronic wallets (PayPal, Skrill, Neteller, …); bank transfer
Since both the form of buying shares in custody and trading CFDs is applied, eToro still provides leverage for investors. If no power is selected, trading that stock is considered custody. But when leverage is activated or short, the trade becomes a CFD derivative.
In addition, if you choose the module without leverage, you will benefit a lot in 2 points that are no commissions and no swap fees. These two fees on other exchanges are calculated as a percentage of trading investors, so it is a considerable commission, especially when holding orders for many days.
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
#3. XM
- Certification: A trusted broker with FSC and CySec registration, ASIC regulated.
- Form of stock trading: CFDs
- The number of shares provided: 100. It is the quantity calculated only for US stock products. In addition, XM also offers many shares of other exchanges.
- Trading Platform: MT5
- The leverage ratio for the equity product: no leverage
- Minimum deposit: 10,000 USD This is the minimum amount for stock accounts, a rather large deposit, not for most investors today.
- Dividend: Yes
- Commission fee: $0.04 per share, with a minimum trading amount of $1 per order. Note that this fee only applies to US equities; shares belonging to other exchanges will have a different method of calculation.
- Deposit/Withdrawal: Supports many different payment channels.
Conclusion
Above is a list of the best stock trading platform today. These stock trading platforms all receive rave reviews from investors around the world for the credibility, transparency, and outstanding features they offer. List the best stock trading platform that will have its advantages and disadvantages. Hopefully, you will find a suitable stock trading platform.
