Are you keen to start investing in US stocks?
You know, those big names you hear on the news like TSLA, Apple, Microsoft, Netflix, Google or even Disney. Five years ago it would take a bit of money and a lot of paperwork.
These days, not so much.
The Stake App is the way you can invest in the US markets, both affordably and conveniently
I’ve been using Stake since 2018 and will show you how it all works and what you need to before you start. It’s not that complicated, and I’ll explain it all right here in this Stake review.
Not only that but they have some really handy features that not all brokers can do (like fractional shares easy tax management), but I’ll get to those soon.
But first… get a free US stock just for joining
Looking for a stake referral code?
Yeah, its true – get a GoPro stock (valued around $12USD), Dropbox stock ($26) OR Nike ($137) just by opening your account and putting some money in.
You’ve got to fund your account with 24 hours to claim this stock, and the minimum transfer in is $50.
Getting started when investing in the US from Australia
Investing in the US is now something many Australian’s are considering.
This is mostly due to technology allowing us to trade and invest with much more ease.
It’s important to have a little understanding of how investing in the US is different to investing in Australia.
You are trading as a foreigner.
As an Australian you live a probably work in the same place the ASX runs. This means you fit into the same tax system and structure that the companies you are investing in do.
When you use a platform like Stake (or another broker to buy US shares) you are required to be compliant with US tax laws. You will need to fill out a US tax form to avoid paying a higher rate of US take on your profits, but tools like Stake can help you and I will explain this later.
The time zones are different
Australia is in the southern hemisphere and the US is around 15-18 hours behind in its’ time zones so the markets will be open during your best sleeping hours. This is ok, as unless you are an active trader you can always set trades to happen while you are asleep and put orders in so that you don’t need to be online to do it while the market is open.
There are two main exchanges
Here in Australia we have the ASX where the vast majority of stocks are traded i.e.. All in the one place.
In the US there are two popular exchanges – the New York Stock Exchange (NYSE) and the NASDAQ. These two exchanges carry most of the companies you are probably thinking of buying.
The good news is the Stake App and other brokers allow you to trade on both exchanges so in reality there is no difference to you looking to buy and invest.
It might be more in the research phase of your investing practice that you find things different as stock codes and prices are available on the exchange the company is listed on.
NASDAQ is popular for technology stocks and does not have a trading floor, whereas the NYSE is based in Wall Street and most photos, images or shows that you’ve seen represent the now older way of buying and selling stocks via physical location.
There are thousands of companies available
Stake claims to have over 3800+ individual companies and ETFs available to trade via its app.
The Australian market in comparison has around 2000, with the bulk of the value being in the top 200 stocks.
The S&P 500 is an index that covers the top 500 large cap US companies and is a good comparison to the ASX200.
The US markets also have a heap of ETFs that are not available via the ASX. In Australia its common to get market covering ETFs like IVV (S&P 500) or VAS (ASX200) or VTS (entire US Stock market) but via Stake you’ll find ETFs for things like the Cannabis market, internet of things or obesity.
There are some of your most obvious differences between Australian investing and US investing, so let’s take a look at stake and see why it might be the tool for you.
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Here is why I love the Stake App
Stake is an online broker that let’s Australian’s invest in the US stock market via the buying and selling of shares through it’s platform. It’s free to sign up and
As someone who was waiting for Robinhood to come to Australia for years, it was great to see a home grown business like Stake give Australians more opportunity to invest in the US markets.
Before Stake, buying US stocks as it was not an easy process. Brokers would charge high fees, you needed to fill out a few forms and it just wasn’t as easy as buying stocks in the ASX.
Since we all now live in the future, we get cool products like Stake which give you abilities to do things you never used to in an easier, affordable way.
So what makes Stake the tool to trade US shares?
No brokerage fees and minimal costs
Unlike CommSec (up to .31% of your investment) or Self Wealth ($9.50) you do not pay anything to buy or sell.
There are also no ongoing fees, like a monthly amount. There is a $9 premium account you can upgrade to but that is an upgrade rather than something you’d feel is essential.
How Stake makes money is when you transfer money in. These are called FX fees. It takes .7% of the money you trade in. This is reasonable. Other brokers are cheaper, but really only by .01% or so, and if you take into account the brokerage fees Stake is still cheaper.
There is also an express fee if you want your money to be added to your account as quickly as possible. The difference is generally only a few hours.
You can buy Fractional shares
This is easily the biggest benefit of the platform. Allowing fractional shares means you don’t need to be a minimum of one stock. You can buy a percentage or fraction of the share dependant on what you want to invest.
For example say you wanted to invest $100 into Amazon, traditionally you couldn’t. The price is well over $3000USD.
With Stake’s feature of fractional investing you can buy 0.0325 of an Amazon stock. Brilliant.
This way of investing means you can manage your budget and include absolutely any company as the stock price is not an issue at the time of purchase.
Easy to understand interface
I love the simplicity and ease that Stake has set up its interface. Black and White, minimal menu and obvious buttons.
You think this is a fairly basic thing to comment on, but I’ve found online brokers over complicate the amount of information they present and show to you that it triggers you to do something you probably shouldn’t.
The app doesn’t push you to do anything and just shows you a dashboard summary, a watchlist and ability to research or lookup stocks.
Transferring in money
The number of options available to transfer in money for investing is great.
Send money from your bank account via POLI and get money in the next day.
You can do regular bank transfers that take an extra day longer.
When I started the only way was to setup what’s called an AUD Wallet.
This is a separate Australian bank account that is connected to your Stake Account.
You would transfer your money there first then via Stake would transfer from that account into USD.
So there are a few options available, and I would say if your bank supports POLi then it’s the quickest and simplest way.
Home grown and evolving product
I like the fact this is an Australian business that’s trying to do something different, allowing us to trade in new places with less fuss.
In my 3+ years using Stake I’ve seen the product and tool evolve to add features, options and be more user-centric so it’s a broker that is striving to do a good job.
Key features of the Stake App
Setting up an account
Like most online brokers, you will need to provide a few details and pieces of identification to set up an account.
Of course, you’d want to sign up with a link like this to enjoy a free stock when you transfer in money
You’ll also need a passport or drivers license to confirm your identification.
The process is very easy and obvious so shouldn’t have you reaching for anything uncommon.
It does take a few steps to process all your information, so don’t expect to be signing up and trading on the spot.
Here’s a summary of how I setup my account
- Completed sign up form (with identification)
- Account was confirmed.
- Could login to account
- AUD Wallet setup (optional) so I could transfer money in
- Transferred AUD money to that account
- Transferred money form AUD to USD
- Started buying.
Ok so now you have an account it's time to find something to buy.
While Stake provides a great overview of the companies available for trading, I wouldn’t say that it’s a research tool.
What that means is that you probably should be doing more research outside of the tool before coming here to buy.
There is a good amount of data that comes through and if you are looking for prices, basic financials, and links to related news then it’s all there.
I guess you can compare Stake to a supermarket, a really good one with heaps of variety. Apart from reading the labels and comparing a few other options around you, you probably want some other kind of information before buying something for the first time.
Personally, I use Simply Wall St for most of my research into companies before buying or you can upgrade to Stake Black to unlock more historical data which is $9.
Other information on the individual stock pages are things like views and trades counters that other members of Stake had racked up. Nice to see, but really shouldn’t be influencing your decision-making.
How to buy and sell
You’ll need to head to the individual company you want to buy or sell to trade. This is a bit different from other brokers that have a trading page where you then look up to find the company.
You have three options with your order types.
- Limit – set the highest price you want to pay for that stock (per share)
- Stop – Buy the stock once it gets to a certain price that you set
- Market- Pay whatever the price it is at now.
The way to sell is very similar.
The market is the simplest form of trading as you are buying or selling at market price. The other two are more specific so if you need to set these then Stake makes them available for you.
If you are interested in trading fractionally then you will notice when you are doing a Market order, the estimated shares will update to show you how much you will own.
You can also order fractionally with Limit or stop orders, but you will need to specify what fraction of a share would like
Managing your stocks
Once you have stocks bought, they sit in your portfolio.
Here you can see the amount of the stock you own, the units, the average price you paid, the day change, and total change.
It’s nice to have this info on one page, but again I use the tool Sharesight to cover all my performance and reporting.
Reporting and transactions
In terms of reporting, apart from the dashboard, there is not much to see. Not that you need to find anything else, but there are a few features available.
Activity – quickly see what date you bought or sold particular shares. Basic details.
Day trade settings – If you like there are a few options here as your account may be restricted if you make more than 3-day trades in a 5 day period. A day trade is when you buy and sell in one trading day (US time).
Account statements and reports can be found if you are looking for summaries of your trading as well as a timeline on your deposits and withdrawals, including when you moved money from AUD to USD and vice versa.
Answers you probably want to know about the Stake App
How does Stake handle US Tax forms, like the W-8BEN form?
As a foreigner or non-US resident, you will need to complete a W8-BEN form when trading US stocks. Completing these forms reduces withholding tax from 30% to 15%.
Previously you needed to fill out this form separately.
The beauty of Stake is that they will digitally complete this form for you. Working with either US broker-dealer, they take care of this process for you.
What are the costs to have and use a Stake account?
To open a Stake account is completely FREE (in fact you can get a free stock when you do so and add some money in).
There are $0 cots to buy or sell shares including fractional shares.
What you do get charged for s to transfer money from AUD to USD.
You need to trade on Stake with USD so being in Australia you need to move your money from one currency to the other.
The cost of this is 70 basis points or 0.7%. For example, if you moved $500 from AUD to USD, Stake would take 0.7% of the AUD amount but charge you in USD. Note that you are charged USD.
So if $500 AUD is $378 USD, then the fee would be 0.7% of $500, so $3.50 but in USD.
It might be tricky to get your head around at first but this is the one and only fee structure you need to understand.
Another fee you may pay is an express fee which is 0.5% on top of your FX fee so that your money gets added a day earlier.
Stake Black is a premium membership to Stake, which is $9, and will talk about that below.
Does Stake help with tax Reporting?
Stake can help you but will not guide you with your tax, so you need to be aware of your obligations or send what you need to a tax accountant.
Here is what reports Stake can provide
- List of trades
- List of transactions
- FX trades.
Stake recommends tools like Sharesight to help with your reporting.
Will I get dividends?
Dividends get paid to your trading account, which is the cash account you send money to buy stocks.
You will receive dividends even if you have fractional shares, you just receive the same fraction that you own.
When a dividend is paid you will have either 15% tax withheld (if you completed a W8 form) or 30% (if you didn’t complete the form).
Stake doesn’t offer dividend reinvestment
What are the time zones for trading?
The NYSE and NASDAQ exchanges are open 9.30 – 4pm Eastern Time, which is around 15 hours behind the east coast of Australia.
For me, this normally means the market opens late-night Australian hours and closes around dawn the next day.
Even with these hours making it awkward to be awake the full trading day, you can still place orders 24 hours a day and they just get fulfilled when the market is open.
What options for trading options are there?
You can place limit orders, market orders, and stop orders with Stake.
Stake vs CommSec
Both these tools are considered online brokers, but they charge and offer different options.
Commsec is your fully featured online broker. It has a number of options and research tools available for investors. It does come at a cost and will cost you more than Stake to trade and hold an account.
The biggest difference is that only CommSec lets you trade on the ASX. Stake is built for US stocks only.
Can you trade ASX on stake?
No, you can't. Stake currently offers US-listed stocks and ETFs.
The ASX broker that I use is SelfWealth.
The best way to use Stake
If you are brand new the best way to use Stake is to start with these things
1. Sign up
Ok, so pretty obvious but there is no overwhelming forms or process involved. Stake just asks for a few details and you will have your own FREE account.
2. Transfer some AUD into USD
To understand the process involved in moving money and preparing to buy, try the transfer process. This involves sending your AUD into an account where it's transferred to USD. The minimum is $50 to send and you will also get a free stock for your troubles.
3. Watch your free stock
Without buying anything or using your money that should be in your trading account now, you can see what happens to that free stock you now should have received from Stake.
Take note of the market opening and closing hours, what your dashboard looks like and how your stock performs.
You can always move out that money if Stake is not for you. The free stock should be able to cover the fees that you may have spent (if you transferred a low amount).
What is Stake Black?
If you are feeling like you really want to make a go of this US trading thing, then Stake Black might be for you.
It’s actually a pretty good tool as it expands the product so that you get the following:
- Instant buying power on sell trades – Don’t wait for money to settle before you buy again
- Buy and sell ratings from analysts – what they recommend to do
- Price targets on stocks from the pros – what price to look out for
- Full company financials and data – deep dive into the business you are about to buy
For $9 a month or $90 a year this is actually really good value. The ability to aggregate all the data from analysts and companies is very very convenient.
The money comes out of your cash account so pretty easy to pay for.
The ability to get instant buying power is another benefit as you will otherwise be waiting for a couple of workdays for any money from shares you sell to be available to spend on buying.
For $9 a month, it's’ worth trialing to see the data you get as you can always cancel anytime.
So what are you waiting for? Build wealth through the US markets from here in Australia.
Stake is your simple, convenient and clear way to buy and sell US stocks in Australia. Whether you want to have a go at it, buy and hold for the long term, or trade regularly I think it’s one of the best tools out there.
It’s also a product that continues to evolve. In my time since joining in 2018, the interface and options have grown significantly so enjoy seeing new features added every now and then.
Be sure to sign up for a free account (use the code carlye366) and have a look around to see how straightforward the process can be. There’s also a free stock on offer if you do transfer some money in.
As they say at Stake – Hello Wall St!