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Jamaica’s stock exchange has shown impressive returns in recent years. The market’s benchmark Jamaican Stock Market, or JSE Index, composed of 37 stocks, increased by a whopping 300% over the past five years.
In 2018 alone, the index showed a return of 29%. This could be the reason that the number of people with accounts increased from 5% to 10% of the Jamaican population over the past five years.
Nevertheless, investors looking for the best online brokerage that offers services in Jamaica need to know a few things about the country’s financial sector and stock exchange before jumping in with both feet. Keep in mind that not all brokerages are created equal, so make sure to carefully consider your needs before you open an account with a broker.
Trading Stocks in Jamaica: What You Need to Know Before You Start
Despite recent stock market gains, Jamaica has experienced decades of low economic growth of less than one percent per year. The country’s services sector accounts for about 70 percent of GDP, with most foreign capital made through remittances, bauxite production and tourism. Economic growth in Jamaica also continues to be challenged by red tape, a high debt to GDP ratio, crime and corruption.
On the brighter side, Jamaica ranks 39th in overall economic freedom among other countries according to The Heritage Foundation. The country also placed fifth in the regional rankings for that metric in North America, coming in after Saint Lucia, Chile, the United States
Trading in stocks in Jamaica was limited to banks, lawyers and high net worth individuals before the establishment of the Kingston stock market in 1961 under the Bank of Jamaica. This evolved into the Jamaica Stock Exchange (JSE) several years later in February of 1969, which is privately owned and aims to develop a vibrant market in stocks and bonds in Jamaica.
The JSE is composed of several different markets. Companies that wish to list their securities on the exchange typically fall into one of these four categories: the Junior Market, the Main Market, the Bond Market and the U.S. Denominated Market.
In May of 2015, the JSE launched its online trading portal. The exchange makes its trading software available to member firms and their clients. The exchange opens for only three and a half hours a day for trading, which doesn’t affect the fact that the JSE is the best-performing stock market in the world.
Features to Look for in a Stock Trading Account
Many international brokers, such as Interactive Brokers, accept clients from Jamaica. You’ll need to open an account with one of the lesser-known Jamaican stock brokers registered as members of the exchange to trade shares listed on the JSE.
These 13 broker members or member dealers have all received the approval of the Jamaican Financial Services Commission (FSC) to execute orders for clients on the JSE. Since you can only trade securities on the JSE through a broker member, key considerations like regulatory oversight by the FSC and JSE exchange membership are consistent among any of the 13 Jamaican brokers.
The JSE hosts a trading platform for the exchange, which lets the broker members give their clientele access to use the exchange’s trading platform.
Even if the broker has its own trading platform, if you want to trade securities listed on the JSE, you must do it through the platform offered by the exchange or with a broker over the phone who then enters your order with the exchange.
Costs and Fees
Active trading could make commissions and fees add up. If you trade actively or even if you trade infrequently to invest, a broker’s commission and fee schedule could make a big difference to your net return.
Most full-service stock brokers give clients access to research resources, which they compensate for by charging higher commissions and fees.
Discount brokers offer the same execution services without the research and other premium offerings.
A good customer service department that pays attention to your needs and offers service beyond the trading week would be your best bet. The customer service staff of most stockbrokers in Jamaica can be reached via telephone and email.
Other services offered by stockbrokers can consist of trading in non-equity assets, such as bonds, currencies, commodities
Some large brokers even offer portfolio management, wealth management, banking and loan services. Make sure you ask about a broker’s additional services before opening an account if they are important to you.
The Best Stock Brokers in Jamaica
Our list includes an international broker that accepts clients from Jamaica and provides a venue for trading and investing in non-Jamaican markets around the world, as well as a selection of top local brokers from Jamaica from among the 13 broker members authorized to trade on the JSE.
TradeZero is an online broker and free stock trading platform that provides everything you need to successfully share and trade, including round-the-clock customer support. TradeZero provides four different trading state-of-the-art software programs with its services, a locator for sourcing shares for shorting, commission-free trades, and real-time streaming, to name a few of the features promoted on their website. The software is a unique and (potentially) affordable option for anyone interested in stock trading.
- Traders seeking high transparency and mobility in a stock trading program
- Those attracted to commission-free trades
- Those seeking a free version of a high-quality trading program
- 24/7 live customer support
- Uses ZeroWeb technology, a powerful level 2 online platform with direct market access
- Mobile app allows users to access stocks and trade in real-time while on the go
- Enforces Pattern Day Trading restrictions (accounts need to maintain a daily equity balance of at least $25k)
- Mobile app could offer more features
FOREX.com is a one-stop shop for forex traders. With a massive range of tradable currencies, low account minimums and an impressive trading platform, FOREX.com is an excellent choice for brokers searching for a home base for their currency trading. New traders and seasoned veterans alike will love FOREX.com’s extensive education and research center that provides free, informative forex trading courses at multiple skill levels. While FOREX.com is impressive, remember that it isn’t a standard broker.
- MetaTrader 4 users
- Beginner forex traders
- Active forex traders
- Impressive, easy-to-navigate platform
- Wide range of education and research tools
- Access to over 80 currencies to buy and sell
- Leverage available up to 50:1
- Cannot buy and sell other securities (like stocks and bonds)
Interactive Brokers is a comprehensive trading platform that gives you access to a massive range of securities at affordable prices. You can buy assets from all around the world from the comfort of your home or office with access to over 135 global markets. Options, futures, forex and fund trading are also available, and most traders won’t pay a commission on any purchase or sale.
IBKR is geared primarily toward experienced traders and investors but now with the availability of free trades with IBKR Lite, casual traders can also acclimate to IBKR’s offerings.
- Access to foreign markets
- Detailed mobile app that makes trading simple
- Wide range of available account types and tradable assets
- Comprehensive, quick desktop platform
- Mobile app mirrors full capabilities of desktop version
- Access to massive range of tradable assets
- Low margin rates
- Easy-to-use and enhanced screening options are better than ever
- Trading platform may be intimidating for new investors
Though Australian and British traders might know eToro for its easy stock and mobile trading, the broker is now expanding into the United States with cryptocurrency trading. U.S. traders can begin buying and selling both major cryptocurrencies (like Bitcoin and Ethereum) as well as smaller names (like Tron Coin and Stellar Lumens).
eToro offers traders the opportunity to invest their assets into premade portfolios or cryptocurrencies, similar to services offered by robo-advisors through traditional brokers. Though eToro isn’t a one-stop-shop for everything an investor needs, its easy-to-use platform and low spreads is a great way to enter the cryptocurrency market.
- International Forex/CFD Traders
- New cryptocurrency traders looking for an easy-to-use platform
- Traders who want to buy and sell cryptocurrencies on-the-go
- Simple platform that is easy to master
- CopyTrader feature that allows new traders to copy the same strategies used by professionals
- Virtual dummy account that gives you $100,000 to practice trades
- U.S. traders currently limited to cryptocurrencies
- Only 15 major coins available to trade
A fully regulated broker with a presence in Europe, South Africa, the Middle East, British Virgin Islands, Australia and Japan, Avatrade deals with mainly forex and CFDs on stocks, commodities, indexes, forex, cryptocurrencies, etc. This brokerage is headquartered in Dublin, Ireland and began offering its services in 2006. It offers multiple trading platforms and earns mainly through spreads.
- Advanced traders
- Traders looking for a well-diversified portfolio
- Controlled by regulatory agencies of multiple countries
- Choice offered in terms of trading platforms
- Support available in 14 languages and trading platforms in 20 languages
- Practice/demo account available for trying out
- Breadth of trading assets
- Does not accept customers from the U.S. as it isn’t regulated in the U.S.
- Transferring funds to the account may take up to five days; withdrawals could take up to 10 days
Start Trading Today
Despite its status as the best performing stock market in the world, not one JSE stock can be found in U.S. exchange-traded funds — not even in emerging market funds. Perhaps the time to begin trading in this relatively obscure stock market has arrived.
Also, the sale of JSE broker Barita last year resulted in a windfall for its investors. This could suggest the scale of future opportunities for making money in the rapidly rising Jamaican stock market.
Frequently Asked Questions
What factors should you consider when working with a Jamaican stockbroker?
You should look at the fees, research, service and trading platforms.
Can you do online trading in Jamaica?
You can trade through a broker with access to the Jamaican markets.