How to Invest in the Spanish Stock Market

The Spanish stock market is dominated by three major indexes: the Barcelona Stock Market, the Madrid Stock Market and the MEFF, also known as the Spanish Financial Futures and Options Exchange. The Barcelona and Madrid stock markets are industrial indexes similar to the New York Stock Exchange, while the MEFF is recommended for experienced investors looking to trade Spanish derivatives.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Financial adviser (recommended)
• Capital to invest
• Properly licensed stockbroker

1. Shop around among the major brokerages to find the most advantageous terms on a trading account that allows you access to international markets.
2. Follow your financial adviser's advice regarding the amount of start-up capital you'll commit to your brokerage account. With the relative volatility of the stock market, you're wisest not to put all your eggs in one basket.
3. Use the same procedure to research stocks as you would use if you were investing in the U.S. stock market. If you're a neophyte in the world of stock trading, it is essential that you take the time to educate yourself on the inner workings of the stock market before you attempt to invest in it. A large number of informative books on the subject are readily available at book retailers, as well as online.
4. Decide on a stock you want to invest in after you have spent some time getting to know the Spanish economy and have attained a good working knowledge of the principal players in the Spanish stock exchanges. Just as with domestic stocks, you should work with your financial adviser to find undervalued shares with a strong potential upside.
5. Have your brokerage place a buy order on shares of the Spanish company you've chosen to invest in. Typically, your domestic stockbroker will have to forward your request to a Spanish broker licensed to buy and sell shares on the Spanish exchanges to complete your order.
6. Use the official website of the Spanish exchange your company is listed on to track its day-to-day performance. The process of selling your shares will be the same one used to buy them: your broker will forward your request to Spain, and it will be filled there.

Tips & Warnings

• Inquire at a major brokerage or financial services firm to find a financial adviser with experience investing in the Spanish stock market.
• It can be difficult to pinpoint a purchase or sale price in overseas markets because of the slight delay you'll experience while your buy or sell request is routed through a licensed Spanish broker. Overseas and international markets are not recommended for day traders.