Discount Stock Broker

S

shortbleu

Hi all,

I am looking for a discount stock broker (to trade stocks, not CFDs or spreadbetting) with the following criteria:

1) The account can be opened by a UK resident.
2) The account can be funded in British pound (GBP) and only the profit/losses would be exposed to the risk of currency.
3) No inactivity or monthly fees charged (eg. Interactive Brokers charge inactivity/monthly fees and would not suit me).
4) The account can be opened with an amount as low as GBP 6,000.
5) I will do less than 6 trades per year and I am looking to pay
commission fee per side of USD 8 maximum or GBP 5 maximum (eg. Selftrade, E-Trade, Barclays stockbroker are too expensive)

I made some research and I found the following stock brokers: Zecco, Just2trade, MBTrading but I don't know if they allow UK residents to open an account and if the account can be founded in GBP. Does anyone know if they suit such criteria?

Any suggestions of brokers following ALL of the above criteria are welcomed.

Many thanks
 
Quote from shortbleu:

only the profit/losses would be exposed to the risk of currency.
More...

If you're investing in let's say US stocks, how could this criteria be filled? Hedging is the only way, the broker has nothing to do with it.
 
Quote from shortbleu:

I am okay to take the currency risk on the profit /losses but not on the deposit
More...

How is that possible? You're buying US stocks, denominated in US dollars. Unless you hedge, you have exposure.
 
you must differentiate exposure on profit/loss only and exposure on both profit/loss and deposit.

Example 1: exposure on profit/loss only:
I fund the account with GBP 10,000 and the deposit stays in GBP at all times.
With this deposit I buy US shares worth USD 12,000, and I sell them back USD 13,000, therefore I made USD 1,000 profit. At the time i made the profit the GBP/USD rate was 1.60, so my profit is worth USD 1,000/1.60 = GBP 625.
If the exchange rate moves against me at 1.80 one year later and I close the account to convert my USD 1,000 profit into GBP, I'll only get USD 1000 / 1.80 = GBP 555.
In total my account is worth GBP 10,000 (deposit) + GBP 555 (profit) = GBP 10,555

Example 2: exposure on profit /loss AND deposit:
I fund the account with GBP 10,000, the broker converts the amoont in usd as soon the account is opened when the GBP/USD rate is 1.60, therefore my account is worth usd 16000.
I buy US shares worth USD 12,000, and I sell them back USD 13,000, therefore I made USD 1,000 profit. At the time i made the profit the GBP/USD rate was 1.60, so my profit is worth USD 1,000/1.60 = GBP 625.
If the exchange rate moves against me at 1.80 one year later and I close the account to convert my USD 1,000 profit into GBP, I'll only get USD 1000 / 1.80 = GBP 555.
Once converted back into GBP, my deposit of usd 16,000 will be worth 16,000/ 1.80 = GBP 8889
In total my account is worth GBP 8889 (deposit) + GBP 555 (profit) = GBP 9444. Therefore although I've traded well, I end up with only GBP 9444 whereas I started with GBP 10,000.

I hope all this makes sense to you.

The following brokers do not accept GBP deposits or if they do, they convert it into USD as soon as the account is opened:
sogotrade, just2trade, zecco, tradeking, mbtrading, optionshouse, firsttrade.

If you know a cheap US stock broker that allows deposits to be in GBP, please let me know.

I know some US futures brokers allow UK residents to fund the account in GBP while trading USD denominated futures. But I want to trade stocks, not futures.
if they do it for futures, why not for stocks? I haven't found one yet, so please help me :)
 
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