Top 5 offshore brokers for day trading in the USA

Top 5 offshore brokers for day trading in the USA

Back in the 1980s, you might have been best off day trading from a boat in international waters. Today, thanks to the web and smartphones, it’s much more manageable. For day trading, most offshore brokers are based either in the US or in an offshore country with favorable tax climates like Ireland or Luxembourg.

Many larger offshore brokers have agents in the US who are authorized to trade on behalf of clients. Instead of being directly registered with the SEC, they are licensed by a state regulator and chartered to operate as a bank or trust company.

This arrangement gives them an extra layer of protection from the SEC and allows them to do business in states like New York.

So, where can you go online today to trade stocks and options? Here’s our list:

Interactive Brokers (IB)

If you’re looking for an alternative to the big Wall Street brokers, Interactive Brokers might be a good option. This well-established brokerage firm is based in Greenwich, CT, and offers over 500 international markets.

It allows day and swing traders to trade stocks and options and has a strong focus on technology.

ThinkOrSwim

This online broker is owned by TD Ameritrade, which runs one of the best discount brokers in the US.

ThinkorSwim users can trade stocks, options, futures, and forex from inside their same primary platform that has been criticized as being “ugly” but quite powerful.

If you’re starting as a day trader, ThinkOrSwim might be an excellent place to look.

TradeKing

While this discount broker is based in Miami, it has a strong East Coast and Midwest presence with special offices in New York and Boston.

It’s more of a “general investor” type of brokerage firm, which allows you to trade more than 5,000 stocks and ETFs for free if you make less than four trades per quarter.

Options trading is more expensive though it does allow you to create deep out-of-the-money options trades (don’t do this unless you know what you’re doing).

TradeStation

Like IB, TradeStation is a full-service brokerage that provides trading platforms for active traders and “long-term investors.”

One of the reasons we think it’s worth a mention is that it does offer free trading for US investors, and this might be something you want to look into since you can’t day trade from inside the US.

Scottrade

Scottrade is a significant discount broker with over $4bn in assets under management. It has strong balance sheet strength and is backed by two prominent financial institutions (JP Morgan Chase).

If you need to open up an IRA account because you trade options, then Scottrade might be the best option for you, even if it does charge a bit more than some other options brokers.

In summary, don’t think of offshore online trading as a way of getting out from the clutches of the SEC. Instead, it would be best if you thought of it as a way to increase your trading opportunities.

Furthermore, some brokers offer US citizens the chance to trade on margin using OTC stocks and options – this is something you’d never be able to do if you were tempted by how easy it sounds to “day trade from home.”

Did you know?

We make courses that can help you learn how to trade and develop trading skills whether you are just starting out as a beginner or have been trading a long time.

Check out our Course Academy to see how you can learn how to develop into the trader you’ve always wanted to be.

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