How to buy shares on the American Stock Exchange?
The stock market in the United States is one of the foundations of the country's economic system, and you are not required to be a US citizen when it comes to allowing small investors to own shares in an American company. However, there are some additional conditions that non-citizens must meet to purchase US stocks. In this article, you will learn how to buy stocks on the American Stock Exchange, trading times, how to follow the markets, and more information.
The American stock market or the American stock market is like any other stock market, but it is characterized by the presence of high liquidity and great diversification in sectors and investment tools (it is the largest stock market in the world in terms of liquidity, size, sectors, number of investors, etc.).
1- How to buy stocks on the American Stock Exchange
All purchases and sales of all US electronic or non-electronic stock exchanges are carried out through brokers approved in those markets, meaning that you can only trade directly through an approved broker. For citizens and residents of the United States of America, they can open an account directly through US brokers.
However, being a non-US citizen should not prevent you from investing in stocks on the American Stock Exchange.
How to buy shares on the American Stock Exchange for non-Americans
If you are from outside the United States of America, you can open a trading account from your place through a licensed and trusted brokerage firm such as licensed and regulated globally controlled Etoro, which allows the purchase of shares in one of the two largest stock exchanges in the world directly, namely the New York Stock Exchange and the NASDAQ American Stock Exchange.
Etoro provides the investor with direct access to liquidity with prices and data in real-time. Take advantage of access to the shares of the major companies offered for trading on the stock exchange including shares of Apple and Alphabet, Microsoft, Netflix, Tesla ...
Opening a trading account on the American Stock Exchange
1. Opening an account directly with American brokers
For citizens and residents, brokers in the United States of America are divided into two parts:
Full Servies Brokers (these brokers provide multiple services, including buying and selling stocks, bonds, funds, etc., covering news or shares of companies or companies, followers, experts, analysts, and recommendations, covering companies offering IPOs, etc., and the most famous of these brokers are: Citigroup, Goldman Sachs, Merlinch Credit Suisse, UPS, Morgan Stanley, GB Morgen, Lyman Brothers, etc. These often charge high commissions and always serve them directly and not via the Internet.
- Discount Brokers, executing brokers or discount brokers (these provide only one service, which is buying and selling in stocks, bonds, funds, etc.) and they often provide the service via the Internet. And they charge very low commissions.
2. Opening a trading account outside the United States of America
A trading account can be opened with financial brokerage firms, or with banks that provide financial brokerage services:
For banks: You may find local banks that provide trading service in the American market. You can contact one of these banks and inquire about the conditions of trading service in the American market. Or you only need to personally come to one of the branches and inquire and they will definitely provide you with all the information.
For brokerage firms: There are dozens, if not hundreds, of brokerage firms. All you have to do is choose a reliable broker from the brokers who offer the service of buying US stock shares, then compare them in terms of commission, quality of service, and reputation, and choose what suits your strategy. Opening an account requires only filling in the account opening form, and then authenticating the account by verifying the identity and address (sending a copy of the ID card and an invoice showing your name and address). Then you process the deposit of the amount that you want to fund your account with the broker through an approved payment method. The subscription steps are clear and easy, and you will find it in a simplified order within the broker's website.
* Note: Most financial brokerage firms require a minimum to open a trading account that varies from one company to another. As for banks, they may require higher amounts to subscribe. Each broker has its own terms.
Of course, after you do the above, you will have an account through which you can trade in American stocks.
2- Information about the American stock exchange
The American Stock Exchange is an inaccurate word because it is not a single exchange, but rather a several exchanges in several states. For example, there is the New York Stock Exchange, the Chicago Stock Exchange, the Philadelphia Stock Exchange, and other markets and other exchanges.
There are exchanges in the American market that have a specific location and a specific location as we mentioned, such as the New York Stock Exchange NYSE and the Philadelphia Stock Exchange and the Chicago Stock Exchange and are traded through traditional manual methods, of course in these exchanges thousands of companies are traded and these companies are called listed or listed companies. There are also electronic markets that are traded via the computer and with an advanced electronic system such as the Nasdaq market, and they are called OTC companies.
To be able to separate whether the company is an OTC type means trading on the Nasdaq Stock Exchange or other similar electronic exchanges or the Listed type that trades in traditional spatial exchanges.
For example, in the Saudi market, there is a digital code for every company. As for the American markets, they have a literal code.
When the symbol is 3 letters or less, this means that trading takes place in the spaced markets
As for if it is 4 letters or more, this indicates that it is trading in electronic methods OTC (Nazdak).
More than 50 thousand companies are traded on various US stock exchanges, and there are hundreds of major and subsidiary sectors such as:
Industry sector: It has several sub-sectors such as construction, defense, aerospace, electronics, and other industries.
The oil and gas sector: it includes the production and refining sector, the petroleum equipment sector, the exploration sector, etc.
The raw materials sector: It includes the petrochemical sector, the mineral exploration sector, and many others.
Technology Sector: It includes software, computers, equipment ...
Financial sector: It includes the banking sector, the insurance sector, the real estate sector ...
The telecommunications sector: It includes the mobile phone sector, the electricity sector, ...
Stock trading times on the American Stock Exchange
Official trading on US stock exchanges lasts 6 and a half hours. From 9:30 am ET in the United States of America, until 4:00 p.m. same time.
This is equivalent in Saudi time, as follows:
Summer is 6 months, from month 4 to the end of month 9 = from 4:30 pm to 11:00 pm.
Winter 6 months from 10 months to the end of 3 months = from 5:30 pm until 12:00 midnight.
In addition to the six and a half official hours, there are additional hours for trading called extended-hours, which if combined with the official hours, the total becomes 12 hours of trading. But unofficial hours are not very accurate operations and it is not recommended to trade during them except for those with experience, and these hours are:
Before the opening: From 8:00 AM ET to 9:15 AM, i.e. an hour and a half before the opening.
After the closure: Trading to the informal continues until 8:00 pm EST in the United States of America, meaning that trading continues about 4 hours after the close.
Trading days: Monday to Friday
Week vacation: Saturday + Sunday
Official holidays: There are many, around 9 separate days per year, and are announced on time.
Note: It is strictly forbidden to close the US market for more than 3 consecutive days.
Follow the US stock market
After you know how to buy stocks on the American Stock Exchange, you will find below other information that will help you gain knowledge of how to follow the market and more information to understand the nature of US stock exchanges:
Of course, you should know the English language so that you can read the analysis and news on companies that help you in choosing a specific stock or the market as a whole. You can follow the developments of the market, news and so on through the Internet and there are several free sites, among which the most important: Nasdaq, MarketWatch, finance.yahoo..and other thousands of sites.
Of course, the American stock exchanges have dozens of indicators and not a single index like the Saudi market index, these indicators were developed by money houses or stock exchanges or otherwise, and they are not necessarily for specific companies on one exchange but rather may be an index of a stock market or a multi-sector index or a market index And so on. The index here is useful for knowing the direction of the economy and the direction of the market, and among the most important and most famous indicators in the American markets:
Dow Jones Industrial Index: It represents the 30 largest industrial companies in America, such as General Electric, GE McDonald's MCD restaurants, IBM, Pfizer PFE, and other industrial companies of all industrial sectors, possibly technological, heavy or petrochemical industries ... etc.
The Nasdaq Index: It is an index that includes thousands of technology companies in various sectors.
Standard & Poor's Index: An index that contains the top 500 companies in various markets, sectors, and industries.