Last updated: 22nd Jan 2026
ASX stock gains have been moderate, with most ASX200 indexes recording 10-15% over the past few years. The NASDAQ, meanwhile, has been ripping along (gaining over 30% across the same timespan), tempting many Aussies to buy US shares.
Unfortunately, many Australians feel intimidated by the prospect of buying US stocks.
I was the same.
This is why I created this quickstart guide, based on my own personal experience.
My portfolio is roughly 80% US stocks, and I have exposure to most Magnificent Seven megacaps, so I have a considerable amount of exposure to the US share market.
Here’s the process I follow to buy US stocks – I hope it helps you save time.
| Key Takeaways: |
|---|
| The US inflation has eased, and the Fed has continued to cut rates, helping support confidence in equity markets. |
| US share investing carries platform and currency risks. |
| You must submit the W-8BEN form to qualify for the 15% dividend tax discount. |
| I offer comprehensive guides to stock trading platforms that sell US shares (see below). |
1. Understand How US Share Ownership Works.
The legalities around owning US shares differ from those for Australian-listed stocks.
Australian shares are usually traded under the CHESS sponsorship arrangement.
Your purchases are recorded directly on the ASX – in your name.
US-listed shares, in contrast, are held under a custodial brokerage arrangement.
(Related: How To Avoid Brokerage Fees When Buying Shares).
Rather than being registered in your own name, the shares are held by a custodian (i.e., the share trading platform) on your behalf.
The platform is the legal owner, but you retain full beneficial ownership.
Under this model, you:
- Are entitled to all dividends and capital gains generated by the shares.
- Decide when to buy or sell.
Important!
People get their knickers in a knot over this issue. Yes, the custodial model technically exposes you to insolvency risk. If the platform goes bust, you could lose access to your funds. On the other hand, avoiding this risk means paying an opportunity cost by not investing in the US market.
2. Don’t Forget About Currency Risk.
Many would-be investors don’t know about it – and get caught offguard.
Let me illustrate the risk with my own personal example.
- I decided to buy AU$10,000 of Microsoft stock.
- My share trading platform converted AUD to USD at (then current) rate of 0.61.
- After FX and brokerage fees, I opened an MSFT position for US$6,000.
A few years passed.
Microsoft CEO Satya Nadella made a few great decisions and my MSFT stock gained 25%. I was up by US$1,500 – and my total MSFT position was now US$7,500.
I was feeling great about myself.
Should I spend it on a new Longines watch that I always wanted? Or maybe surprise my wife with a holiday?
I logged back into my share trading platform and closed my entire US$7,500 MSFT position.
A couple of days later, the money hit my Australian bank account.
I looked at the number, but couldn’t believe it.
AU$9,950.
What the hell?
How could I LOSE $50 after investing my money for several years, and gaining 25%?
I wasn’t aware that geopolitical turmoil had weakened the USD against the AUD, changing the exchange rate from 0.61 to 0.75.
By the time I paid the spreads and brokerage fees, I made a net loss.
Important!
By the time I accounted for inflation (hovering at 3.5% p.a.) and the compounding opportunity cost of this “investment”, I estimated my total loss at around AU$3,500.
Investors avoid outcomes like mine by timing not only the entries and exits from their US share positions, but also their subsequent conversions from USD to AUD.
Although the AUD/USD currency pair is relatively stable, it has experienced several volatile moves over the past 15 years.
Did you Know?
Some share traders hedge currency risk by investing in hedged EFTs (e.g., VGAD) or by borrowing the currency they wish to transact in via the trading platform.
3. Learn Tax Rules For US Shares.
Investing in US stocks means additional tax responsibilities:
- If you get a dividend, the US Treasury will want to tax you at 30%.
- Because the US and Australia have a tax treaty, you can cut your dividend tax to 15%.
- You must submit a W-8BEN form with your broker to activate the tax discount. Without it, US dividends may be taxed at 30%.
- You must declare all gains and pay capital gains tax in Australia. ATO treats them identically to your usual capital gains (e.g., on Australian property and shares).
Important!
You must accurately track the Australian dollar value of every transaction. This includes all entries to and exits from a position, as well as any dividends you receive, using the correct FX rate at the time. Some brokers (e.g, Interactive Brokers) generate reports that handle this well. Others (e.g., eToro) allow you to upload reports from portfolio tracking tools such as Sharesight.
3. Choose The Best Trading Platform For US Shares.
If you’re like most people, you’ll start by checking if your existing ASX brokerage offers international share trading.
That’s a convenient option – but likely to be an expensive one.
Australian banks charge a combination of an FX fee and a brokerage. This is not unusual, but their fees tend to be um, ambitious.
CBA, for example, charges 0.55% currency conversion fee and 0.12% brokerage fee.
In practical terms, investing AU$10,000 into the US market with Commsec means getting a $67 haircut on the way in:
- $12 brokerage
- $55 FX
Important!
Exiting the position also triggers brokerage and currency conversion fees.
I became obsessed with finding the best share trading platform, so I wrote a few comprehensive guides on this topic:
4. Set Up Your Share Trading Account Correctly.
Get ready for the mind-numbing part. But you already knew it was coming, right?
Signing up to trading platforms is no longer as painful as a dentist visit, but you’ll still need to satisfy their KYC and anti-money-laundering requirements.
Here’s what you’ll need:
- Name, date of birth (e.g., passport or driver’s license).
- Tax File Number (TFN).
- Bank account details.
- Utility bill or another document that shows your address.
- Completed W-8BEN form, as required by US tax authorities
5. Don’t Forget About Weird Trading Times.
Once your brokerage account is set up, you’re free to buy US shares.
The catch is that the US market is open while Australia is sleeping.
Specifically:
- When AEDT is in effect: 11:30pm – 6:00am (roughly October to March).
- When AEST is in effect: 12:30am – 7:00am (roughly April to September).
Trades placed outside these hours will queue and execute when the US market opens.
Yes, this can be frustrating.
Some investors choose to stay up and place trade during live market hours, so they get the real-time share price.
When you’re ready, fund your account, convert AUD to US (you may need to wait for a day for the funds to arrive), search for the ticker symbol of the asset you want to purchase, and confirm the trade.
Disclaimer.
The information presented here is general in nature and does not endorse any investment product, market, provider, or service. It is not intended as financial advice or a recommendation to trade – or not to trade. Trading futures, shares, ETFs, options, CFDs, and forex involves a high level of risk and may result in significant losses, particularly when leverage is used. Past performance does not guarantee future results. Before trading, consider whether the product is appropriate for your circumstances and seek independent professional advice. Refer to the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) on the provider’s website.
Steven
Nelson says:
I attempted to use the “hack” to dodge conversion fees, but sadly after converting AUD to USD on a Wise account, there doesn’t seem to be a way to deposit that money into eToro; i.e. eToro recently disabled Wire transfers and Wise doesn’t support SWIFT transfers for sending USD to a bank in the US?
John Keys says:
CMC Invest are an abysmal in turning around new accounts.
Over 1 month to setup up an account with an investment trust, and still waiting. I was promised 5 business days.
Reg Watson says:
Given that China’s economy is going down the toilet how the heck do we expect an appreciation of the Aussie in 2024 ? We are tied to China.
Regular citizen says:
Unless you can see into the future or time travel, try to refrain from predicting a stronger AUD. It’s now Dec 2025 and contrary to all you top earning ‘economists ‘, the AUD ain’t shit.