New to trading US stocks – 5 things you need to know before trading
The New York Stock Exchange (NYSE) is the largest in the world – making the US stock market an obvious place to consider when diversifying your assets. With a market capitalization of over US$36 trillion for the NYSE and Nasdaq combined (as at end March 2020), and quickly growing in size, the key to your financial independence might be listed among the stocks in the US market. Here are five things you need to know before you dive into a new trading floor.
1. The three most broadly followed indexes are the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite Index
Standard & Poor’s 500 Index (S&P 500) includes stocks from 500 companies in the US stock exchange. Because it represents around 80% of the total value of the US market, the S&P 500 is a good indicator of the overall market’s movement.
The Dow Jones Industrial Average (DJIA), or also known simply as “the Dow”, is a price-weighted index that tracks 30 largest companies in the US stock exchange – essentially the largest and most influential.
NASDAQ is the world’s first electronic stock market and companies on this exchange are usually Internet-based or in the tech industry. The Nasdaq Composite Index tracks all the stocks on this exchange, weighted by market capitalization. It’s a good index to watch if you want to get a feel of the overall performance of the US tech industry.
2. The trading hours of the US stock market
The US stock market follows the local time in New York, which converts to 09:30pm HKT to 04:00am HKT during daylight saving time from March to November, and 10:30pm HKT to 05:00am HKT during standard time from November to March. The US stock markets also observe these US holidays.
3. A starting budget for US stock investing depends on what you’re buying
The traditional minimum number of shares an investor can purchase on the market is one and the cost per share depends on the stock or company. For example, if you are looking to invest in tech companies, buying one share of Amazon (NASDAQ: AMZN) may cost around US$2,000, while buying one share of Snap Inc. (NYSE: SNAP) may cost around US$20.
While investing in high priced stocks may be difficult for some investors, especially ones just starting out in the US market, the popularity of roboadvisors and reinvestment programs that automatically invest any dividends gained back into the market have made fractional shares more commonly accessible to the everyday investor. This means you can own a percentage or fraction of a single share in a company.
[Coming Soon] SoFi Hong Kong is excited to bring fractional shares to you soon through the SoFi Hong Kong app, breaking stocks into more affordable slices so you can have more flexibility to invest according to your budget.
4. Trading fees vary depending on the platform you choose to trade US stocks with
Stock brokers can range from full-service to discount options. The SoFi Hong Kong app offers unlimited trades at $0 commission, $0 hidden fees, and $0 membership fees, giving you access to over 15,000 Hong Kong and US stocks and ETFs all from the convenience of your phone, as well as the support of a global trading community so you don’t have to go at it alone.
5. All you need is the stock symbol and you’re ready to start trading!
A stock symbol, also known as a stock ticker, is a unique series of letters or numbers used to identify a stock traded on a stock exchange.
Trading on the US stock market through SoFi Hong Kong is the best way to make investing affordable, easy, and fast. You can be a stockholder of a blue chip company just by downloading the SoFi Hong Kong app.
About SoFi Hong Kong
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SoFi Hong Kong is Hong Kong’s first SFC licensed brokerage (AXL143) with $0 commission, $0 hidden fees, and $0 membership fees. Get the SoFi Hong Kong app and trade over 15,000 US and Hong Kong stocks for free. For iOS and Android.