Introduction
International students are those who come to the UK for study purposes either part-time or full-time. It is generally called a Tier 4 visa. The growing economy of the world is a great opportunity for international students to build their wealth by trading and investing in worldwide stocks and the cryptocurrency market. However, it is crucial to know can tier 4 visa holders are legally allowed to engage in this type of activity. So, this comprehensive guide will help you to make sure you are well-informed and ready to start the investing journey by exploring all the aspects of trading and investing for international students.
Understanding the fundamentals of Stocks and Cryptocurrency market.
What is Stock Trading?
Stock is one of the types of financial assets which represents a fraction of a company’s ownership. Stock trading indicates the buying and selling of the shares of the publicly traded company operated by the stock exchange.
For example, many companies are listed on the London Stock Exchange with their own share price. If you buy the shares of Lloyds Bank in 45 p and after 6 months, if you sell the same share in 100 p, then the difference between the price of buying and selling that is 55 p is your profit within 6 months’ timeframe. It can be profit or loss as the share price fluctuates from time to time.
Therefore, the act of buying and selling stocks is also referred to as stock trading.
What is Cryptocurrency Trading?
Cryptocurrency is digital or virtual money which is built based on blockchain technology to use over the internet. Bitcoin, Ethereum, Tether, Solana are some of the popular cryptocurrencies.
Cryptocurrency trading also refers to the act of buying and selling the cryptocurrencies through an exchange and it is speculated on cryptocurrency price fluctuations via a CFD account.
Key Differences Between Stocks and Crypto
The major difference between stocks and Crypto is stocks are based on real-world entities that provide products or services while Crypto is highly speculative which is driven by demand supply and sentiments of the market.
On the other hand, stocks are the ownership of the company whereas crypto is just software built by using blockchain technology.
Overview of International Student Visas in the UK
Types of Visas for International Students
As per the UKVI rules, The UK offers Students visas commonly for pursuing higher education in the UK from different parts of the world. It is replaced by a Tier -4 Visa. Furthermore, after completing the course successfully, students can apply for a 2-year postgraduate work visa.
Specifics of the Tier 4 Visa
Tier 4 visa is intended for all full-time or part-time students enrolled in reputed UK universities. It has its own limitations and restrictions in working hours, type of work and financial activity. So, before diving into the investing and trading journey of stock and crypto markets, it is essential to understand the limitations and constraints of the tier-4 visa.
General Work Restrictions for Visa Holders
According to UKVI regulations, it has been stated that Tier – 4 visa holders are permitted to work up to 20 hours per week during their term time and full hours during their vacations.
Besides this, starting a business and being self-employed is restricted for this kind of visa holder. So, it is essential to distinguish between personal investing and self-employment is crucial to figure out the nature of the trading activities that might be included in self-employment categories.
Regulations and Permissions
Legal Framework for Trading as an International Student
If investing in equities and cryptocurrency does not violate any visa requirements, overseas students are permitted to do so under UK law. Although active trading that might be considered corporate management is prohibited, personal investment is generally acceptable.
Can International Students Trade Stocks and Crypto in the UK?
International students are allowed to trade stocks, but only as long as they are making personal investments. They must make sure that their trade doesn’t resemble a commercial endeavour, as that would be against the rules of their visa.
The better and safer way for the students is to invest in stocks and cryptocurrencies for the long- term instead of trading frequently.
Financial Market Access for Students
How International Students Can Access UK Stock Markets
Nowadays it is easy to get access to the UK stock market via brokerage accounts and there are many online brokers which provide various online platforms which are easy and user-friendly for trading and investing purposes.
Accessing Cryptocurrency Exchanges in the UK
To get into the journey of trading cryptocurrencies, one must create an account on cryptocurrency exchanges. Trustworthy platforms such as Coinbase, Binance, and Kraken are extensively utilized and provide ample tools to assist novices in getting started.
Setting Up for Trading
Opening a Brokerage Account as an International Student
Normally, opening a brokerage account involves providing identification, proving where you live, and occasionally a minimum deposit. The broker that students select must provide strong customer service and support for clients from throughout the world.
Choosing a Reliable Crypto Exchange
When choosing a cryptocurrency exchange, it’s important to consider aspects like security, transaction costs, user-friendliness, and the variety of cryptocurrencies offered. Strong security protocols and regulatory compliance make exchanges more desirable.
Necessary Documentation and KYC Processes
Both stockbrokers and crypto exchanges require Know Your Customer (KYC) processes. This includes providing identification documents, proof of address, and sometimes additional information to comply with anti-money laundering (AML) regulations.
Understanding Trading Platforms
Best Trading Platforms for Stocks
There are many online trading platforms used for trading and investing in stocks. Among all, I prefer Etoro and Trading 212. I use Etoro to buy stocks regulated by the New York Stock Exchange like because it has an easy user-friendly interface, all the fees and commissions are cheaper and can use it Etoro account which has no exchange fee of the currency. And use Trading 212 and free trade to buy UK stocks.
Top Crypto Trading Platforms
For crypto, the different platforms like Binance, Coinbase, and Kraken are highly regarded. Among them, Binance is the best option considering its fees and commission. They provide extensive trading options, strong security features, and educational content to help users navigate the crypto space.
Risk vs. Rewards of the trading stocks and crypto market.
Being an international student in the UK, it is also crucial to know the risks and rewards of trading stocks and crypto. As we all know, money is very challenging to earn and manage our money during the period as students. So, we must think about long-term investment rather than short-term trading.
The wisest decision is to invest 20- 30 % of your income in stocks which are fundamentally very strong. Also, you must calculate your risk appetite before trading and investing because it is mentioned that more than 85-90 % of traders lose their money.
I suggest to all international students to invest in stocks and crypto for the long term and use the power of compounding to build their wealth. And diversify your portfolio to 20-30% by crypto and 70-80% by stocks.
Conclusion
Summary of Key Points
It is possible for overseas students studying in the UK to trade stocks and cryptocurrencies as long as they comply with visa requirements. Success requires controlling risk, staying up to date on legal developments, and having access to trustworthy platforms.
Encouragement and Final Thoughts for Aspiring Student Traders
A satisfying and instructive experience might come from starting a trade path as an international student. You can successfully manage the financial markets if you have discipline, cautious planning, and an open mind. Stay curious, stay informed, and happy trading!
References
References
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Lahari. (2024, June 19). Can international students trade stocks in UK. Analytics Insight. https://www.analyticsinsight.net/tech-news/can-international-students-trade-stocks-in-uk
Lsbu. (n.d.). LSBU. https://myaccount.lsbu.ac.uk/s/article/Can-I-work-as-self-employed-while-on-a-Tier-4-visa-1624446389994
Student visa. (2014, January 29). GOV.UK. https://www.gov.uk/student-visa
Ukcisa. (n.d.). UKCISA – international student advice and guidance – Studying in the UK?. https://www.ukcisa.org.uk/blog/6257/A-working-definition
What is the stock market? (n.d.). IG. https://www.ig.com/uk/investing-need-to-knows/what-is-the-stock-market