Editor’s note: This article was first published in August 2010, and the fees it lists are Selfbank’s tariffs as of 2010 and 2011. Brokerage fees for US shares have changed substantially since. Zynga listed on the Nasdaq in December 2011 and was acquired by Take-Two Interactive in 2022, so it is no longer listed.
If what you really want is to invest in the US stock market so you can buy shares in the world’s leading companies, it doesn’t matter which country you’re from. These days nothing stops you from investing, and the process is very simple.
1. Choose your bank (broker)
Terms vary considerably depending on how much you want to put into the stock market and how you plan to use it. Read the small print in every document: when you open a brokerage account, the word “free” tends to come up a lot. Remember that nothing is free with no strings attached. I’ll use the bank I currently invest with, Selfbank, as an example.
With Selfbank, trades on the Spanish market start at €2.95 per buy or sell order for amounts under €1,500. Up to €6,000, each trade costs €5.95, and so on, up to a 0.07% commission on amounts over €60,000.
For international markets, the commission is €13.95 plus an extra €2 surcharge on the sell order. In other words, just buying into the US market and getting out five hours later would already cost you close to €30.
Once you know this and are clear about it, open a brokerage account with the bank of your choice. I’d recommend comparing prices among online banks, as they usually offer better terms.
What you should know when investing in the US stock market
With Selfbank (and you’ll need to check these details with other banks too), the custody fee is FREE, except that to qualify you have to make three trades a month in that same market, so it isn’t really free.
2. Choose your platform
There’s a basic platform, which is free. But if you’re not investing for the medium to long term, make sure the platform offers real-time quotes: that is, it shows the stock’s actual current price, not the price from two minutes ago. In the short term, and with stocks like these, a lot can happen in two minutes on the day of the IPO.
Then there are several other platforms. In Selfbank’s case, these are Trading Center and Trader Pro, both free as long as you make a minimum number of trades each month.
After reading the terms, sign up for the platform that suits you best, always keeping in mind how much you’re going to invest and how many trades you plan to make.
3. Find the stock
As a rule, you should know which market the stock trades on. If you don’t, use the platform’s search tool: enter the company name or its ticker symbol and select “all” markets. In my example I searched for Microsoft, which is listed not only on the Nasdaq but also on Xetra and in Amsterdam.
Zynga, for instance, will trade on the Nasdaq, so that’s the market we select.
4. Buy the stock
Once you’re ready to buy, go ahead and place the order: just enter the number of shares you want to buy in the relevant field.
You then have the option of making the buy order conditional by setting a stop, either above or below the price. I’m not a fan of conditional orders like these, but for someone without much experience they may be a good idea, since at least you can rest easy knowing you won’t lose more than the level set in the stop.
Once all that’s done and you’re happy with it, confirm the order and you’re done: you’ve bought the shares.
Further reading
- What a major investor looks at before investing in a company
- Why the stock market is the most profitable investment
- The first step to getting started with investing
- Your first stock market investment
- How to become a successful entrepreneur
Featured image: Thomas J. O'Halloran, Public domain, via Wikimedia Commons.
