How old do you have to be to trade stocks?
You can learn how to trade stocks at almost any age. In fact, teenagers can take a massive leap ahead of their peers with their finances by starting out so young. By adult-age, they can expect to be making huge results – and hopefully have accumulated an impressive personal capital.
However, there are many rules and regulations which could hold you back from learning as a teenager and getting a head start.
The first thing to note is that each country has its own laws on trading. In most, you need to be at least 18 years of age in order to trade in the stock market and open your own brokerage account. This certainly applies to the UK, Australia and India, but in the US, some states may stipulate that you need to be age 21 and over to trade or invest.
The good news is that most countries offer a legal loophole to help youngsters get on the trading ladder. Most allow under 18s the option to trade or invest providing they have the supervision or a parent or legal guardian.
Here, a parent is able to open an account for their child to trade with. The parent must have full custodial control of the account though, overseeing its general incomings and outcomings and managing its daily functions.
The parent must also make the physical trades – and is responsible for depositing money, ‘gifts’, into the account to trade with. The important thing to note is that children are prohibited from contacting any account brokers, but it does mean that teenagers are able to learn about the investment process and even begin building their own portfolio from as early as 13 years old in the UK.
In most countries, when the child turns of age (either 18 or 21), the account reverts into their name.
How to invest in the UK as a teenager
Not only are the UK laws advantageous for aspiring young traders, but there is a Junior ISA (JISA) which allows parents to invest in stocks and shares on their child’s behalf.
The JISA is highly regarded as one of the most efficient ways to save as parents will pay no income tax or capital gains on investments. With an allowance of up to £9,000 and a range of thousands of investment options, it is an enormously beneficial way to prepare for any child’s future. If the child already has a Child Trust Fund (CTF), then these funds can be merged and transferred into the JISA instead.
Again, once the child reaches 18, he or she has full ownership and access of this account.
What are the advantages in learning how to trade so young?
The sooner you begin to learn about trading and investing through a financial trading course, the better. Not only do you have more scope to accumulate wealth over time, but you have more space to make financial mistakes to learn from which aren’t entirely catastrophic to your livelihood.