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How to Invest in American Stock Market?

Everyone wants to invest in the US stock market and we Indians are especially excited about the investment. Almost all the big companies in the world are from the US, even Apple, Microsoft, Amazon & Google, all four companies of the 1 trillion Market Valuation Club are US based companies. In fact, we get a lot of profit only in the slight change in these companies with high valuation.


Recently, the price of Apple shares fell 1% on the news of Johy Ivy leaving Apple. The market value of the Apple company was reduced by $ 9 billion, or about 62,000 crore, due to the reduction of just 1% shares.

Let us tell you that most of the Indians are in the top positions in US companies. Such as Google CEO Sundar Pichai, Microsoft CEO Satya Nadella, Adobe CEO Shantanu Narayan.

There are two ways to invest in US Stock Market-

1. Opening trading account in Indian Brokerage Firm having tie-up from Foreign Brokerage Firm.

2. Opening a trading account in Direct Foreign Brokerage Firm.

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By opening a trading account with Indian Brokerage Firm-
Any Indian who wants to invest in the US stock market can invest in an Indian Brokerage Firm with a tie-up from the Foreign Brokerage Firm by opening his trading account. Such trading account is called Overseas account. There are many Brokerage Firms of foreign tie-up in India, such as ICICI direct, HDFC Securities, Kotak Securities, Reliance Money.

Steps are as follows-

1) First you have to open a trading account in Firm, a FForeign tie-up broker.

2) All documents required for KYC will have to be submitted.

3) After the account is open, you have to transfer funds and then fill A2 form. Through A2 Form, you will be able to receive foreign exchange in your account. This form provides you with Brokerage Firm yourself.

4) You can trade on online platform only after funds are transferred. Before this you get Contract Notes for Executive Trade, which is sent to your inbox.

After this, you will be able to buy shares of foreign companies. The thing to note is that you cannot do Margin Trading and Short Selling on Foreign Exchange, as both these methods are not allowed to Indian Investors.

By opening trading account in Foreign Brokerage Firm-
You can invest by opening a trading account in Direct Foreign Brokerage. Many of the foreign brokerage Firm- Interactive Brokers, TD Ameritrade, Charles Schwab International Account etc give permission to open trading account for Indians.

Currently, in a financial year, any Indian can invest $ 2,50,000 in the US stock market, ie, about Rs 1.7 crore and this is the maximum price of LRS (Liberalized Remittance Scheme).

There are some advantages and some disadvantages of investing in US Stock Market-
1> 'Foreign Broker' takes brokerage charge in dollars in foreign exchange, so we Indians have a higher brokerage charge.

2> The exchange rate has a very high impact, whenever the dollar is fluctuate, the value of our currency also becomes fluctuate.

3> If you do not know the Global Business Factors and Economics Conditions, then the US stock market can prove to be dangerous for you.

You can increase your investment skills by investing in the US stock market.

Do you know that about 60% of people in the US invest in the stock market but only 4% to 5% of the people in India invest in the stock market.
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