How to choose the right overseas broker to invest in US stocks? Picking the right platform can double your returns

The US stock market has always been a popular choice among global investors. High-quality companies like Amazon, Google, Apple, and the S&P 500 offer abundant investment opportunities with high returns and ample liquidity. More and more people want to access the US stock market through overseas brokers, but they face many challenges—complex account opening procedures, language barriers, a variety of fee standards. So, how should one get started?

Direct Account Opening vs. Power of Attorney, a Comparison of Two Methods

There are mainly two ways to invest in US stocks: through domestic power of attorney brokers or by opening an account directly with overseas brokers.

Domestic Power of Attorney Model: Higher fee rates, but easier account opening, with dedicated guidance, and no currency exchange needed. This method is suitable for investors with large capital and low trading frequency.

Direct Opening with Overseas Brokers: Requires handling currency exchange and account setup yourself, but offers very low fees—usually below 0.1%—fast trade execution, real-time online trading support, and professional charting tools. The fee advantage is obvious, especially suitable for frequent traders and investors with larger funds.

Basic Knowledge You Need to Know About Overseas Brokers

Regardless of which overseas broker you choose, these fundamental points are universal:

Trading Units and Time: The minimum trading unit is 1 share, settlement cycle is T+2 days, and fees are calculated per trade. Currently, most brokers offer commission-free trading.

Fee Structure: Brokers earn not only from trading commissions but also from US stock financing interest, spread income, platform management fees, and more. Even if they claim “zero commission,” there may be additional costs such as USD exchange spreads, cross-border transfer fees, withdrawal fees, etc.

Suitable for: Investors with high trading frequency, seeking low fees, or risk-tolerant investors (who want to leverage margin trading and securities lending to amplify returns) are especially suitable to open overseas broker accounts.

Core Criteria for Choosing an Overseas Broker

Safety First: Prioritize platforms regulated by authoritative agencies such as US FINRA, SIPC, or Hong Kong SFC. Large listed companies with strong capital backing have extremely low risk of insolvency.

Fee System: Carefully compare comprehensive costs including trading commissions, deposit and withdrawal fees, monthly account fees, etc. Don’t focus on a single indicator.

Available Trading Products: Brokers offer a wide range of products—stocks, ETFs, options, bonds, futures, forex, etc.—choose according to your investment needs.

Trading Platform Experience: User-friendly trading software can greatly improve investment efficiency. Focus on order types, charting tools, risk management features, etc.

Customer Service: Chinese-language support is important. Especially when encountering account issues or trading disputes, direct communication can save a lot of trouble.

Account Opening Threshold: Different platforms have different requirements, ranging from zero to $25,000. Small-scale investors and beginners can find suitable options.

Three Main Forms of US Stock Investment

There are roughly three ways to invest in US stocks, each with its advantages and disadvantages:

1. Direct Ownership of US Stocks
You buy actual shares, becoming a real shareholder with dividend rights and voting rights. This is the most direct and orthodox investment method, suitable for long-term value investors. However, many large overseas brokers have high account opening thresholds (some require $25,000), which may not be suitable for investors with limited initial capital.

2. US Stock ETFs Trading
Exchange-Traded Funds offer convenient diversified investment, but also have high thresholds, mainly targeting institutional and large investors. ETFs profit only from price increases; they cannot be shorted.

3. US Stock CFDs (Contracts for Difference)
A derivative trading product where you do not own the actual stocks but trade based on price movements. Advantages include low account opening thresholds (a few tens of dollars), support for both long and short positions, and leverage use. However, be aware of leverage risks and ensure proper risk management.

For most retail investors, whether buying stocks or ETFs, the core goal is to profit from price differences. CFD trading can also achieve this, and with leverage and two-way trading features, it is especially suitable for short-term traders and risk-tolerant investors.

Different Investor Strategies

Long-term Value Investors: Larger capital, focus on actual company growth, want dividends, pursue stable income → Choose direct ownership of US stocks, prioritizing reputable, well-capitalized brokers.

Short-term Traders: Limited capital, frequent trading, focus on price fluctuations, seek low costs → US stock CFDs are the first choice, with simple account opening, low costs, and flexible trading.

Index Trackers: Want to diversify risk and follow market average returns → US stock ETFs are ideal, though with higher thresholds.

Risks to Watch Out for When Choosing an Overseas Broker

Credit Risk: Any broker can face liquidity issues. The 2008 financial crisis, with Lehman Brothers as a warning, exemplifies this. To reduce this risk, choose large, well-regulated, and well-capitalized institutions.

Language and Legal Barriers: Many investors lack language proficiency and legal knowledge, making them vulnerable to false information. It’s essential to learn basic investment principles and relevant regulations of your jurisdiction.

Account Recovery Difficulties: Unlike domestic brokers, in case of force majeure (such as death), inheriting or recovering overseas broker accounts can be complicated and time-consuming, requiring various proof documents. Proper estate planning can help mitigate this risk.

Summary: Choosing the Right Broker Makes Investment More Efficient

The overseas broker market offers many options. The key is to find a platform that suits you. Whether you are a professional trader, long-term investor, or a newcomer, the core principles are:

• Prioritize safety and regulatory compliance
• Choose product types based on your investment style
• Compare total costs comprehensively, not just single fees
• Select platforms with good user experience and strong customer support

After choosing a broker, spend time learning how to use platform tools, mastering risk control methods, and developing a trading strategy that fits your goals. Picking the right platform is just the first step; real gains come from rational investment decisions and disciplined risk management.