Cashing in on Americans' appetite for overseas investments, Fidelity Investments is expanding its online-brokerage services to allow investors to trade foreign stocks and currencies directly beginning on Thursday. The firm says this will result in cheaper and faster trades for more investors.

Many brokerage firms do make it possible for investors to buy foreign stocks, but investors usually have to go through a broker, which can add extra fees and slow down the transaction. Typically, U.S. investors buy shares of overseas companies through mutual funds, unless they buy a foreign company that lists its shares on a domestic exchange as American Depositary Receipts.

Fidelity's announcement comes at a time when investors have been taking cash off the sidelines and putting more of it into overseas investments, particularly emerging markets. "We're seeing a significant shift toward this type of opportunistic investing — taking advantage of a falling dollar and a foreign-exchange play and a greater confidence that the markets are going to be supported," says Robert Adler , head of Lipper FMI, Americas, a unit of Thomson Reuters PLC.

More firms are now making it possible to trade foreign stocks in much the same way they would trade U.S. stocks. In Fidelity's case, investors can now trade online in 12 markets and eight currencies — using either U.S. dollars or local currencies — from one brokerage account. Brokers and financial advisers will also get access to direct trading in 25 markets and 16 currencies. Retail customers' online trading commissions — which are paid in local currencies — could drop by nearly half to $30 or less with some trades. Previously, investors typically had to call a Fidelity representative if they wanted to trade a foreign stock.

Interactive Brokers Group Inc. — whose brokerage unit is aimed at active and professional traders — already offers direct foreign trading in 18 markets. It plans to add trading in Italian shares later this month and Brazilian shares by year end. E*Trade Financial Corp. upgraded its site in 2007 to allow investors to trade individual foreign shares online in their local currencies in six key markets.

Ross Calvin of Albuquerque, N.M., started trading foreign stocks at Interactive Brokers after concluding that future economic growth will be concentrated overseas. "The way I see the world, the U.S. is the largest debtor nation in history," says the 27-year-old investment analyst. As the U.S. pays for new projects by printing new money, he figures that the purchasing power of the dollar will be further eroded, which will also translate into more growth overseas.

But the expanded access raises questions about the suitability of foreign stocks for U.S. investors. Information on foreign companies may not be as easily available as on American companies, and Americans could find different standards in areas such as accounting and regulation. Investors also risk seeing the value of their investments fall if the U.S. dollar strengthens against that country's currency.

Fidelity says it has beefed up its foreign-stock coverage by adding additional research, company-specific news and real-time foreign quotes as well as other online tools. TD Ameritrade Holding Corp. recently relaunched its online research center to include more research on global markets, while Charles Schwab Corp. last year expanded its international research. The Securities and Exchange Commission, meanwhile, proposed a rule last year that could make it easier for investors to trade foreign stocks.

For now, Fidelity's new service will be available only to those who make more than 120 trades a year and have at least $25,000 at the firm, or those who have at least $1 million at the firm. "It's designed for more active, more engaged customers" with an interest in foreign markets, says James Burton , president of Fidelity's retail brokerage business, although he adds that the company could expand to more customers.

Write to Jane J. Kim at jane.kim@wsj.com