E-Trade is going to let customers buy and sell stocks traded on global exchanges for $20- pilot project - Canada, France, Germany, Hong Kong, Japan and Britain. The rollout is expected to take two months before all customers have access, and could one day expand to 42 international markets. Stock exchanges in Asia have bounced to unprecedented highs and far outpaced Western markets

"Nobody can deny the world is becoming more interconnected, a more global community," said President and Chief Operating Officer Jarrett Lilien in an interview. "I think our competition is going to have to follow. This is going to be a fundamental part of investing."

Previously, retail investors who wanted to buy foreign stocks that were not listed on U.S. exchanges as American Depository Receipts had to call brokers and accept commission fees that topped $100. E-Trade will charge a $20 commission, and also give customers the ability to move U.S. dollar accounts into foreign currencies.

The launch unlocks thousands of stocks previously unavailable to online traders, and pressures top rivals Charles Schwab Corp. and TD Ameritrade Holding Corp. to make similar moves.

Until now, most average investors were pretty much restricted to owning mutual funds or electronically traded funds -- commonly known as ETFs -- with stocks from a particular market. Most retail investors have shied away from owning foreign stocks because there isn't as much research available to them, while funds tend to spread the risk.

Customers will also be able to buy and sell euros, pounds, yen, Canadian and Hong Kong dollars.

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There's a growing consensus on Wall Street that investors should diversify overseas, appropriating 25 percent of their portfolio to foreign investments. More and more Americans are sinking cash into mutual funds outside the U.S., where last year saw broad advances.