Best Brokers for International Trading 2019

If you’re ready to get a passport for your portfolio, here are the U.S.-based brokers that can help your assets travel abroad:

• Interactive Brokers
• Fidelity Investments
• Charles Schwab

A key component of a balanced portfolio is exposure to international markets. Exchange traded funds (ETFs) focused on a particular geographical area can be added to any portfolio, but the investor has little control over the stocks included in the fund. Most brokers also allow their clients to trade American Depositary Receipts (ADRs), which are certificates representing shares in a foreign stock. ADRs are traded on U.S. exchanges.

For investors who want to trade directly in instruments traded in markets outside the U.S., a small subset of online brokers allows you to place trades on foreign markets. You’ll find stocks, bonds, futures, and currencies to trade, but be mindful of additional risks like limited liquidity and currency exchange rate fluctuations.

If you’re interested in one or two international markets, you might consider opening an account with a local broker in that country. The major risk here is that regulatory agencies outside the U.S. are not as proactive, and foreign brokerages have been known to shut down overnight, absconding with their customer’s assets. 

Nobody does it better. Interactive Brokers offers a multi-currency account that lets you trade in products worldwide as well as make deposits and withdrawals in different currencies. You choose the base currency for your account for reporting (Americans usually choose the US dollar). Using the downloadable Trader Workstation (TWS), all international positions are opened using a margin account, which does not require you to convert currency beforehand, though your holdings in the international asset are subject to currency fluctuations for profit/loss calculations. IB’s charting and quote services can be used on any asset for analysis and risk assessment. When a new electronic exchange opens anywhere in the world, IB soon offers its products on TWS.

Interactive Brokers also received awards for Best Overall Online Brokers, Best for Low Costs, Best for Options Trading, Best for Penny Stocks, and Best for Day Trading.

Fidelity customers can trade in 25 countries, and can choose whether the transactions will settle in U.S. dollars or the local currency. There are 16 currencies available to trade, and you can hold domestic and international stocks in a single account. All foreign currencies and international stock holdings are displayed on the Positions screen, sortable by currency and country. However, there are no good-til-canceled orders, short sales, or additional order instructions (e.g. fill or kill) for international orders.

Fidelity also received awards for Best Overall Online Brokers, Best for Beginners, Best Stock Trading Apps, Best for ETFs, Best for Penny Stocks, Best for Roth IRAs, Best for IRAs and Best Web Trading Platform. 

Schwab customers with a Schwab One account (which also includes cash management features) can make trades with broker assistance on 30 different exchanges. A separate Schwab Global Account offers direct online access to 12 markets in their local currencies. Whichever you choose, you can access the international stock screener which lets you sort by 30 criteria such as country, sector, market cap, and stock performance. Schwab’s international equity ratings cover more than 4,000 stocks and offer in-depth analysis, based on 14 predictive criteria including momentum and risk for than stocks 28 countries.

Charles Schwab also received awards for Best Overall Online Brokers, Best Web Trading Platform, Best for Options Trading, Best for Penny Stocks, Best for Beginners, Best for Roth IRAs, Best for IRAs, Best for ETFs and Best Stock Trading Apps. 

Merrill Edge, TD Ameritrade and Vanguard allow international transactions via a live broker, but they do not enable online trading of international securities. TradeStation allows its customers to trade futures on seven European exchanges.