Schwab offers trading in US shares

Charles Schwab has today announced the launch of its US investment account service that allows Australian clients to invest in shares listed on the NYSE (New York Stock Exchange), Nasdaq-AMEX and U.S. regional exchanges. The service is initially available via the phone while the internet trading service is expected to be rolled out by the end of June 2001. Clients will pay USD49.95 for phone trades up to USD20,000 AND USD39.95 for online trades.

A number of online brokers already allow clients to invest in US shares. These include Comsec, TD Waterhouse, Quicken, Quicktrade and Merrill Lynch HSBC. Comsec also offers trading on the Hong Kong stock exchange while Merrill Lynch HSBC lets you trade on up to 15 exchanges worldwide.

When trading international shares it is important to understand the account opening requirements and whether or not the investor is exposed to fluctuations in the exchange rate. Opening a cash settlement account in Australian Dollars (AUD) to trade international shares (Comsec, Merrill Lynch HSBC, Quicktrade) will expose you to exchange rate fluctuations between the time you buy and sell securities. Opening an account in foreign currency (Schwab, Quicken,TD Waterhouse) exposes you to exchange rate fluctuations between the time you deposit AUD into the account and when you close the account and convert the foreign currency back to AUD.