What are U.S. stocks? A Beginner’s Guide to Investing in the U.S. Stocks from A to Z
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The stock market is where shares are issued and connects traders to buy and sell stocks, commodities, derivatives, and other financial instruments. The US stock market is home to the world’s leading market capitalization and trading volume. The following article learns in detail about US stocks and provides detailed instructions on investing in US stocks and stocks for beginners.
What are US stocks?
American securities are securities (including stocks, indices, commodities, etc.) listed and traded on stock exchanges in the United States.
The US stock market is the world’s largest market by daily trading volume, with more than 10,000 listed companies and a total market capitalization of more than 33 trillion USD. The total capitalization of the US stock market is five times larger than that of China, six times that of Japan, ten times that of Hong Kong, and 15 times that of the Indian stock market. In addition, the US stock market accounts for half of the global trading volume and is considered the most liquid market today.
Companies listed on the US stock exchange aim to raise capital to serve production, business, and investment activities for business development. The US stock market has many stocks of the world’s top famous corporations and enterprises, such as Apple, Google, and Tesla… Therefore, this market is very interested in stock traders worldwide and favorite.
How does the US stock market work?
The stock market operates through Stock Exchanges (New York, Nasdaq…). Companies list shares through Stock Exchanges. US traders trade (buy and sell) stocks through an exchange. A transaction is made when the prices of both buyers and sellers match.
Historically, traders had to perform at the Stock Exchange. Today, the stock market operates through the internet and online stockbrokers. A trader must be a US citizen to trade the underlying US stock. It is mandatory for people who do not live in the US and do not have US citizenship to invest in the US stock market by going through a stock brokerage company (broker).
Why invest in US stocks in Vietnam?
The US stock market is currently the largest market by market capitalization globally. Therefore, the US stock market is highly liquid and reduces the risk for investors.
Besides, with a huge trading volume and strictly regulated by strict and long-standing regulations, the US stock market is considered the fairest and most transparent. Manipulating or manipulating prices in the US stock market is more unlikely than in small, emerging markets worldwide.
In addition, the US market is home to the largest and most famous companies in the world. It is an opportunity for traders to invest in companies with a long history of sustainable development, or the world’s leading companies, with attractive long-term growth, such as Google, Microsoft, IBM, and Abbot…
The US stock market is also a place for potential companies, known as “unicorns,” in terms of growth rate. A typical example that can be mentioned is that Netflix’s stock was only about $ 10 in 2010, but there was a time when it peaked at $ 700 / share (in 2021). Or Amazon shares are listed on the floor at $ 18, at one time traded at $ 3600 (in 2021), and are currently traded at a price of more than $ 2100. These are not uncommon phenomena in the US stock market, so this market offers many adequate long-term investment opportunities.
Two forms of US stock trading for non-US traders
Custody trading: In this form, traders ask a broker to buy and hold stocks for them. With this form, the broker is the person who owns the shares. However, traders still enjoy the full benefits of dividends and profits.
Share CFD trading: This is the most popular form of stock trading today. When trading shares as CFDs, the trader only makes trades based on the stock’s price movement, not owning it. With CFD trading, users can execute trades on both rising and falling prices by placing buy orders when they perceive the price to be trending up in the future and sell orders when they perceive a possible price drop. In addition, traders can also use leverage when trading shares in the form of CFDs.
Essentially, trading in shares by non-U.S. traders enjoys the full benefits of stock price volatility as trading the underlying stock. However, traders do not have shareholder voting rights, and trades are executed immediately after order matching.
Find out about brokers that allow trading in US stocks.
Currently, most investors choose to trade US stocks through forex brokers, placing orders on the MT4 platform. However, for those new to US stock trading, the Meta Trader platform is more challenging. In addition, brokers using MT4 or MT5 platforms often offer a minimal number of stocks on the US stock market.
Among today’s brokers, Capital.com is the one that offers its trading platform, which is quite intuitive and easy to understand on both web and mobile versions. In addition, Capital.com also allows users to open an MT4 account to trade on the MT4 platform.
Many US equity traders love Capital.com with over 3600 stock CFDs and many of the world’s major stock indices on Capital.com, such as the Dow, FTSE 100, S&P 500, and DAX 30. When trading shares unleveraged with no overnight fees, Capital.com can receive dividends when trading actual shares. It is an advantage when investors want to own stocks for a long time or invest in stocks to receive dividends. Especially, Capital.com also has no deposit/withdrawal fees and no downtime fees.
How to open a US stock trading account on Capital.com?
Open a Capital.com account.
To open a US stock investment account on Capital.com, users register by following the link below:
* See more: The complete guide Capital.com from a to z
Enter your email and password and click [Continue]. Right after that, you opened the Capital.com account successfully.
Before trading on Capital.com, users need to perform account verification displayed on the screen step by step.
- Fill in your address, nationality, and place of birth and click [Continue].
- The following window fills in your name (without accents) and date of birth.
- Next, fill in the residential address information: street name, building number, apartment, city, and postal code that matches the information on the documents used to verify the address (if there is no house number, flat), household, road, fill in NA).
- Enter your phone number.
- Select the currency to use for the account.
- Read Capital.com’s terms and conditions and click [Continue].
Capital.com account verification
To upload address verification documents, go to [Settings], select [Upload document], click the [Upload document] box.
- An identity verification document is a 2-sided photo of your passport, identity card, citizen identification, driving license, etc., containing your full name, date of birth, and address.
- The required photo must be clear, capture all four corners of the document and be in the following format: PNG/JPG/JPEG or HEIC.
After uploading the required documents, Capital.com users need face verification. Log in to your Capital.com account with your phone and click [Account], select [Account status], and click [Take a video selfie]. Then, click [I’m ready] and follow the instructions.
Deposit money into a US stock account on Capital.com
Capital.com users can deposit/withdraw funds easily through various payment gateways, including Local Bank, E-Wallet, and Credit Card. The following article guides to top up Capital.com via Credit Card. Other payment methods do the same.
After logging into your Capital.com account, click [My account] and select [Deposit Funds] in the right corner of the screen.
Select deposit method [Bank Cards], fill in card information (card number, card expiry date, cardholder’s name, card type, CVV number), and amount. Then click the checkmark to confirm the card owner in the box [I confirm that I am the card owner] and click [Deposit].
Note: The name of the Capital.com account holder and the credit card holder you use must match. Capital.com’s regular account requires a minimum deposit of $20 and a maximum of $900.
Open an order to buy a US stock on Capital.com.
After finding a favorite stock ticker, if the trader sees that the market may increase in price in the future, a trader can open a Buy order.
- Click [Buy] on the Market window
- Enter the trading volume in the [Size] box.
- Click [Buy] to finish.
- Buy You must open orders while the market is in business hours. Select [Place Limit Order] to place a pending order if the market is in closing time.
If the market can drop in price in the future, the user can open a short sell order (Sell) by clicking the [Sell] button on the Market window and executing the same Buy order.
Suppose the stock market in developing countries (like Vietnam) is still very young compared to the world. Therefore, when trading securities on these markets, investors face many risks and face the risk of price manipulation or lack of transparency. In contrast, the US stock market has a huge market capitalization and trading volume, making it highly liquid. Traders also reduce the risks they may encounter when trading in this market. In addition, traders can sell short or use leverage when trading on the US stock market. These are the advantages that many traders love when investing in US stocks.