As cryptocurrencies gradually enter traditional finance, stablecoin issuer Circle and Bitcoin reserve strategy pioneer Micro Strategy have become familiar stock names to investors, and more Bitcoin reserve strategy companies, SOL reserve strategy companies, and even companies with ETH and TRX as reserves have sprung up like mushrooms after rain, and most of them have increased several times in the early stage, which is more amazing than the cryptocurrency itself! This article will introduce how to join this new blue ocean market by opening an overseas securities account or a multiple-trust account.
What are the advantages and disadvantages of opening an overseas securities account?
There are two ways to invest in overseas listed companies. The most direct way is to open an overseas securities account. Investors who need regular transactions are advised to open an overseas account directly, because most brokerage firms claim that they do not charge transaction fees. Investors who are accustomed to frequent transactions to earn price differences can save a lot of transaction costs.
Currently, many overseas brokerage firms provide online account opening procedures. American brokerage firms such as Firstrade, Charles Schwab, and Interactive Brokers IB are popular options commonly used by Taiwanese people. As long as you fill in the information online and upload your ID, you can quickly open an overseas securities account.
The disadvantage of opening an overseas securities account is that the funds have to be remitted overseas, and the remittance fee is usually about NT$1,000 each time, depending on the handling fees of each bank. The brokerage firm will also charge an additional handling fee when the funds are remitted back. It is not suitable for frequent deposits and withdrawals. This method is suitable for investors who want to diversify some of their assets overseas.
For complete instructions on opening a U.S. stock account, the author recommends Mr. Market’s article. Interested readers are welcome to refer to it. Chain News does not charge any commission and is not responsible for any recommendation.
How to open a consignment account? Is it better to settle in Taiwan dollars or foreign currencies?
A more convenient way is to place an order directly through a Taiwanese brokerage firm through a multiple-entrustment transaction, and keep the funds in a Taiwanese bank. In case of an accident, there are Taiwanese businesses to help communicate.
What is a re-order transaction?
Sub-brokerage is formally known as "foreign securities trading business under entrustment". It allows investors to open a "sub-brokerage account" with a domestic brokerage firm that is qualified to sub-broker foreign securities without having to fly overseas to open a securities account. The domestic brokerage firm will then place an order with a foreign brokerage firm after receiving the order. Because the order is processed twice by the domestic and foreign brokerage firms, it is called "sub-brokerage".
How to open a multiple-mandate account? What kind of investors is it suitable for?
Taiwanese investors can open a multiple-mandate account directly through a brokerage firm. If an investor already has a Taiwan stock securities account, most of them can directly open a multiple-mandate account on the brokerage platform. Multiple-mandate accounts of Taiwanese brokerage firms generally support the United States, Japan, Hong Kong, Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect. Investors do not need to open accounts one by one and can invest in multiple overseas markets.
However, repeated entrustment will incur two levels of fees, including handling fees from Taiwan brokerage firms and overseas exchanges, and most brokerage firms have a "minimum handling fee", so frequent small transactions are not recommended.
Another difference from the Taiwan stock market is that the re-entrustment transaction adopts a circle deposit system. Investors must ensure that there is sufficient settlement funds (transaction price plus handling fees and various miscellaneous fees) in the agreed settlement account before they can place an order.
Should I choose Taiwan dollar settlement or foreign currency settlement?
The re-entrusted delivery account can be a foreign currency account or a New Taiwan dollar account. If you are an investor who does not trade frequently, I suggest you use a New Taiwan dollar account to trade first, which can save you the trouble of exchanging currency by yourself and calculating the handling fee first. However, if you are an investor who regularly trades US stocks or other countries' stock markets, you can exchange currency and store it in a foreign currency account when the exchange rate is lower, which may save you some fees on the exchange rate difference.
Should I choose an overseas broker or a duplicate entrusted account?
The author has compiled a comparison table of overseas brokerages and multiple commissions in the United States. For the Cathay United Bank multiple commission account that the author often uses, placing orders through its securities app only charges a transaction fee of 0.1% for US stocks, and there is no minimum threshold limit. There are many types of stocks supported, and all stocks with codes displayed in the system can be traded. On the contrary, the US stock broker Firstrade has restrictions on penny stocks with poor liquidity and share prices less than $5, like many crypto stocks that can be seen but not eaten.
However, re-mandates usually do not support long-term orders (such as Firstrade's GTC orders, which can be valid for up to 90 days). Investors need to re-place orders every day, and re-mandates do not support pre-market and after-market trading.
Practical teaching of account opening process, taking Cathay United Bank's multiple-trust account as an example
If investors already have a Taiwan stock securities account, they can directly click on the order app to open a multi-trust account online. If not, they can open a securities account online at the bank they often use. Here we take Cathay United Bank as an example. As long as the following conditions are met, you can apply online. According to the author's actual test, all processes can be completed on the same day.
A natural person who is 18 years of age or older and does not have a "U.S. taxpayer", multiple citizenship, or "guardianship or support declaration" status
Hold a foreign currency current account at Cathay United Bank and have a valid mobile phone number on file with the bank
After entering the Cathay United Bank CUBE App, click "Investment", "Start Experience Securities Services", and prepare your ID and second ID (Health Insurance Card, Driver's License, Passport) and follow the steps to complete the online account opening. Then deposit funds and you can trade stocks in multiple markets such as the United States, Japan, Hong Kong and Mainland China!
This article Crypto stocks become a new battlefield for currency traders! How to buy and sell virtual currency concept stocks through re-entrustment or overseas brokers? first appeared in Chain News ABMedia.
