Want to Invest in US Stocks? Wall Street Today Guides You to Get Started Easily

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Do you feel that investing in US stocks is out of reach? In fact, you only need to prepare three core elements:

• A reliable broker account
• Funds for investment and compliant funding channels
• Clear trading rules and basic knowledge

This is not a complicated manual. Wall Street Today will provide you with a clear, simple, and actionable guide to eliminate your fear of the unknown.

Key Points

• Investing in US stocks requires preparing three things: a broker account, investment funds, and understanding trading rules.
• When choosing a broker, check if it has legitimate licenses and SIPC protection; beginners should use cash accounts.
• Transferring money to a US stock account usually requires first transferring to an overseas bank, then wiring to the broker.
• US stock trading hours are regulated; you can buy and sell stocks on the same day, but proceeds from sales take two days to become available.
• Beginners can buy ETFs or stocks they are familiar with; non-US residents need to fill out the W-8BEN form to exempt capital gains tax.

Account Opening Preparation: How to Choose a US Stock Broker

Choosing a broker is your first step in investing in US stocks, just like choosing a reliable bank. A good broker not only ensures the safety of your funds but also provides a smooth trading experience.

Key Considerations for Choosing a Broker

Safety is always the top priority. You need to ensure your broker holds legitimate licenses and is strictly regulated. In the US, there are two main regulatory bodies:

• Securities and Exchange Commission (SEC)
• Financial Industry Regulatory Authority (FINRA)

In addition, you must pay attention to the protection from the Securities Investor Protection Corporation (SIPC). If your broker is an SIPC member and unfortunately fails, SIPC will provide up to $500,000 protection for your account, including up to $250,000 in cash.

Please Note: SIPC protection is not all-powerful. It does not cover the following situations:

• Loss in investment value due to market fluctuations.
• Losses caused by following bad investment advice.
• Purchasing stocks that are worthless in themselves.

Differences Between Cash Accounts and Marginal Accounts

When opening an account, you usually need to choose between a cash account and a margin account.

• Cash Account: You can only trade with the funds you deposit, paying cash for securities.
• Margin Account: You can borrow money from the broker to invest, amplifying your purchasing power, but this also amplifies risks and costs since you need to pay margin interest.

For beginners, we strongly recommend starting with a cash account. You can first familiarize yourself with basic operations like buying and selling stocks and monitoring the account.

Mainstream Broker Account Opening Process

There are many brokers popular among Chinese users, such as Futu Securities (Futu), Tiger Brokers, and Interactive Brokers. Their account opening processes can basically be completed online.

Usually, you need to prepare the following materials:

1. Identity Proof: Valid ID documents.
2. Address Proof: Recent utility bills, bank statements, or rental contracts, etc., to prove your residential address.

The following is a comparison of some broker features to help you make a choice:

After preparing these materials, you can visit the broker’s official website, follow the instructions to fill in information step by step, upload documents, and complete identity verification. The entire process is usually approved within 1-2 business days.

Funding Preparation: How to Complete Deposits

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After opening a broker account, the next step is to transfer your investment principal into the account. This process is called “depositing funds.” For investors in mainland China, this usually requires cross-border remittance.

Analysis of Mainstream Deposit Methods

The most mainstream and compliant method is wire transfer through a bank. Due to foreign exchange control policies, direct remittances from mainland Chinese banks to overseas broker accounts may encounter obstacles. Therefore, a common operation path is:

1. First transfer funds to your own overseas bank account, such as one opened at a licensed bank in Hong Kong.
2. Then wire from this overseas bank account to your US stock broker account.

This method has a clear path and ensures fund safety.

Cross-Border Remittance Operation Guide

Operating cross-border remittances is not complicated; you just need to prepare accurate recipient information.

First, log in to your broker account and find the recipient bank information in the deposit guide. This information is crucial; please double-check for accuracy.

The information you need usually includes:

• Recipient bank name, address, and SWIFT code (bank’s international code)
• Recipient name (broker’s name) and account number
• Reference or memo (for further credit), where you need to fill in your name and securities account number to ensure funds are accurately credited to your personal account.

After preparing the information, you can initiate the remittance through bank counter or online banking by filling out the wire transfer application form. Please note that all information needs to be filled in English letters.

Deposit Fees and Arrival Time

Cross-border remittances incur certain fees, mainly including the sending bank’s handling fee and correspondent bank fee. The correspondent bank is the “transfer station” that passes funds between your remitting bank and the broker’s receiving bank, deducting a fee from it.

This correspondent bank fee is usually between $15 and $50, so the final amount you receive may be slightly less than when sent.

After completing the remittance, please keep the remittance voucher. Once the funds arrive, you can start your first US stock trade.

Trading Basics: Essential US Stock Rules to Know

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With funds in place, you can step into the real trading world. Before clicking the “buy” button, you must understand the basic “rules of the game” in the US stock market to help avoid many unnecessary mistakes.

US Stock Trading Hours and Major Exchanges

US stocks have fixed trading sessions and adjust based on daylight saving time and standard time. You need to schedule your trading according to Beijing time.

• Regular Trading Hours: US Eastern Time 9:30 - 16:00.
• Pre-Market and After-Hours Trading: You can also trade pre-market and after-hours outside regular hours, but trading volume is smaller and price volatility may be greater.

US stocks mainly have two exchanges:

1. New York Stock Exchange (NYSE): Long history, home to many large traditional companies and blue-chip stocks.
2. Nasdaq Exchange (Nasdaq Composite): Known for tech stocks, listing venue for many innovative and growth companies, such as Apple, Google, and Microsoft.

T+0 Trading and T+2 Settlement Mechanism

The trading and settlement mechanisms in US stocks differ greatly from A-shares; understanding these two points is crucial.

• T+0 Trading: You can buy and sell the same stock on the same day with no limit on times. This provides high flexibility. However, frequent intraday trading triggers the “Pattern Day Trader” rule. If you conduct 4 or more day trades in 5 trading days, your margin account assets must maintain above $25,000, otherwise trading privileges will be restricted.
• T+2 Settlement: After selling stocks, funds do not become available immediately. US stocks implement a T+2 settlement system. “T” refers to the trading day, “+2” refers to the second business day after the trading day. For example, if you sell stocks on Monday, the funds will complete settlement and be withdrawable on Wednesday.

Trading Units and No Price Limit

The trading threshold for US stocks is very friendly, but risks are relatively higher.

First, the minimum trading unit for US stocks is 1 share. This means you do not need to buy in “lots” (100 shares) like A-shares; even with just tens of dollars, you can buy one share of Google or Amazon stock and easily become a shareholder in a world-top company.

Second, the US stock market has no price limit. A stock’s price may rise or fall 20%, 50%, or even more in one day. This is both an opportunity and a challenge, requiring strict trading discipline, such as setting stop-loss points in advance, to avoid huge losses from emotional decisions.

Wall Street Today Recommendations: How Beginners Select Stocks and Handle Taxes

Once you are ready to trade, the next question is: What to buy? Facing thousands of stocks, beginners can easily feel lost. Don’t worry; Wall Street Today will provide clear stock selection ideas and answer your most concerned tax questions.

Start by Understanding the Three Major Indexes and Star Stocks

Before picking individual stocks, learn to read the market’s “thermometer”—the three major indexes. They are the Dow Jones Industrial Average, S&P 500 Index, and Nasdaq Composite Index. These indexes represent the overall performance of the US stock market.

For example, the S&P 500 Index tracks the performance of 500 large US listed companies, and its rises and falls well reflect market sentiment.

Wall Street Today Tip: Total return includes dividend distributions. As of December 8, 2025, the index showed strong market growth.

The driving force behind the indexes is those household-name “star stocks.” For example, the highest market cap companies in the Nasdaq Index include:

1. NVIDIA
2. Apple Inc. (Apple)
3. Microsoft
4. Amazon
5. Alphabet Inc. (Class A)

Understanding these companies can help you better grasp market dynamics.

Beginner Stock Selection Strategies: ETFs and Familiar Companies

For beginners, Wall Street Today recommends starting from two directions:

• Buy Index ETFs: Exchange-Traded Funds (ETFs) are like a “stock basket.” Buying one index ETF, such as SPY tracking the S&P 500 or QQQ tracking the Nasdaq 100, means investing in dozens or even hundreds of top companies with one sum of money. This effectively diversifies risk and avoids huge losses from a single stock crash. Historical data shows that long-term holding of mainstream ETFs usually brings steady returns.
• Invest in Companies You Know: Do you use an Apple phone every day? Do you often go to Starbucks for coffee? Starting with brands you are familiar with and like from daily life is an excellent beginning. Because you understand their products and business, research will be more intuitive.

Tax Essentials: W-8BEN Form and Dividend Tax

As a non-US resident, you need to know two core tax points.

First is the W-8BEN form. Brokers will require you to fill out this form when opening an account.

Its main purposes are:

• To declare your non-US tax resident status to the Internal Revenue Service (IRS).
• To qualify you for tax treaty benefits between your country/region and the US.

If you fail to submit or fill it out incorrectly, the broker may withhold up to 30% tax.

Second is tax types. For non-US residents, US stock investment taxes are very simple:

• Capital Gains Tax-Free: Profits from buying and selling stocks do not need to be taxed to the US government.
• Dividends Taxed: Dividends distributed by listed companies usually require 30% tax. If your W-8BEN form is effective and your region has a tax treaty with the US, the rate may be reduced (e.g., to 10%). Wall Street Today recommends carefully filling out this form.

You have now learned the four core steps for investing in US stocks: Choose a broker and open an account -> Prepare funds and deposit -> Learn core rules -> Start with familiar stocks or ETFs.

Wall Street Today reminds you again that investing always carries risks. It is recommended to start with small amounts, treat early investments as a learning process, and continue learning, such as how to read company annual reports (10-K).

Knowledge from books is shallow; true understanding comes from practice. Now, start by choosing a broker and take your first step in global asset allocation!

FAQ

Is there a minimum funding requirement for investing in US stocks?

In theory, no. US stocks can be bought in 1 share, so your minimum investment is the price of one share of the stock you want. You can become a shareholder in a top company with just tens of dollars.

It is recommended to invest small amounts initially, focusing on learning and experiencing the trading process rather than pursuing short-term returns.

What happens if I don’t trade for a long time after opening an account?

Most mainstream brokers will not close your account due to inactivity. However, some brokers may charge account management fees for long-inactive accounts with low assets.

Before opening an account, carefully read the broker’s fee description to understand related policies.

Can I directly buy US stocks with RMB?

No. You need to first exchange RMB into USD, then transfer the USD to your broker account through compliant channels. US stock trading and settlement use USD.

What is the Pattern Day Trader (PDT) rule?

If you conduct 4 or more day trades (buying and selling the same stock on the same day) in 5 trading days using a margin account, you will be marked as a pattern day trader.