What is international trading?

What is International Trading? Investment opportunities can be found anywhere in the world. That’s why we offer Fidelity’s Online International Trading. It is literally, a whole new world of trading, with rules and procedures you may not be familiar with.

Now keep in mind that a key to mastering international trading begins with thinking internationally, from time zones, to currencies, to equities, and foreign markets.

Let’s start at the beginning. First, Fidelity has certain eligibility requirements.Please be sure to review these requirements prior to enrolling.Once eligible, here’s how International Trading works.

Fidelity’s online International Trading enables you to trade foreign stocks directly on the exchanges of 12 foreign countries. Not only can you trade in 12 countries, you can trade in 8 currencies and settle in either a local currency or U.S. Dollars.

International Trading can be done within your existing Fidelity brokerage account. That means both your international and domestic positions are held in the same account.

There are some stipulations built into International Trading.

First, International orders are only available for equities.

Second, not every security is available and availability is subject to change without notice. *Third, there are restrictions on the kind of orders you can place and when.

Trades are Day Orders, only. Your order will only be in effect that day it is placed.

Trades must be Market or Limit orders.

Trades are Cash only, not Margin.

Additional order conditions are not available. For example, there are no “All or None” or “Fill or Kill” orders.

Short sales are not permitted.

Fourth, international stocks must be bought and sold in the same country. For example, you can’t buy a stock in Germany and sell it in Hong Kong.

Also, foreign exchanges have their own rules. Make sure you know what they are. For example, there may be restrictions on the quantities of a share you buy.

There may be a board lot, that means a number of shares defined as a trading unit.

For example, in Japan, the Osaka securities exchange sets “daily price limits”. A security can not trade outside that range on any given day.

So, the key to understanding international trading is to know the local trading norms.That begins with Time. International trading operates in real time and local time. Simply put, real time means that you can place an order at any time. However, the order will only be eligible for execution during the market hours of that particular exchange. This is referred to as “Local Time”. So make sure you are familiar with the hours of the local exchanges, as well as their holiday schedule.

Another important consideration when trading internationally is the currency exchange fees and rates. Let’s start with fees.

If you are settling in U.S. dollars, you’ll need to have enough to cover the purchase price and all commissions and exchange fees. However, if you have funds in the local currency, you just need to cover the purchase price and commissions.

Now let’s turn to currency exchange rates and their inherent risks. There are many aspects to currency exchanges and you should become familiar with them. When you conduct foreign currency exchanges, there are typically fluctuations in the exchange rate. Many factors can make exchange rates highly volatile, such as supply and demand and changes in monetary policies. You need to be aware that these risks could affect trading and trading strategies.

With Fidelity’s Online International Trading, a world of investment opportunities is available to you through Research, news, advanced charting, and independent reports. All of this comes with real-time quotes.

And, should the need arise, you can even call an International Trading Specialist.

To find out why and when International Trading makes sense for your portfolio, click on the “Why and When” tab in this module.

To learn how to research and trade internationally, go to the “How To” tab in this module.