Options Trading On Canadian Securities

Options trading on canadian securities

Most Americans don't have a clue where they can go to buy and sell Canadian equities.

I know this because of the massive number of emails I get asking for help trading Canadian stocks.

So I decided to put together this report to point investors who are interested in buying Canadian equities in the right direction...

Today, the majority of U.S.

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citizens trade stocks online through brokers like AmeriTrade, Fidelity, and Scottrade. And for the most part, these brokers won't allow Americans to trade Canadian stocks.

If a Canadian company has a U.S.

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listing, then buying and selling it are no problem. But the percentage of Canadian companies that are actually listed on an American exchange is very low.

Options trading on canadian securities

If you want to trade Canadian stocks that don't have a U.S. listing, you need to open an account with a new broker.

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If you do not wish to open an account with a broker, then there are several online trading sites available that allow you to purchase or sell stocks on a Canadian exchange.

In my years of trading experience in the Canadian market, I have found several online trading sites that accommodate different needs.

I want to quickly tell you about a few that I usually recommend...

PennTrade

PennTrade is an easy­-to -use broker that a lot of readers like to go through, even though they're a bit pricey.

Their commission is a hefty $29.95 per trade. However, to offset this commission Penntrade offers several sweet incentives that you should take into consideration when choosing an online broker.

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They have no extra charges for market orders, limit orders, large volume, small volume, or stocks under $1.00 — plus every tenth trade is free.

A small "activity assessment fee," related to Section 31 of the Securities and Exchange Act of 1934, applies on sell transactions.

The rate through March 27, 2013, is $22.40 per million, or about two cents per $1,000 of sale proceeds. This rate is adjusted annually by the SEC and posted on its website.

PennTrade requires only $500 to open an account, which can be met with cash, equivalent securities or any combination of the two.

For more information on PennTrade, check out their website at www.PennTrade.com.

Interactive Brokers

Interactive Brokers is another firm that readers like because they allow U.S.

citizens to economically trade Canadian equities, stocks from eight other countries as well as FOREX and bonds.

The commission on Canadian trades is only one cent (Canadian) per share traded, with a minimum commission of CAD1.00 and a maximum commission of 0.5% of the trade value.

Check out some of the commission fees below.

CountryTierCommissions

Minimum per Order

Maximum per Order

United States

 

  
AllUSD 0.005 per shareUSD 1.000.5% of trade value
Non-Smart Routed API orders <= 500 SharesUSD 0.013 per shareUSD 1.300.5% of trade value
Non-Smart Routed API orders > 500 SharesUSD 0.008 per shareUSD 1.300.5% of trade value
VWAP ordersUSD 0.01 per shareUSD 1.000.5% of trade value

Belgium

All0.1% of trade valueEUR 4.00EUR 29.00

 

France

Euro-denominated0.1% of trade valueEUR 4.00EUR 29.00
USD-denominated0.1% of trade valueUSD 5.00USD 42.00

Germany

SWB0.12% of trade valueEUR 6.00None
FWB0.1% of trade valueEUR 4.00EUR 99.00
Xetra - ETFs0.1% of trade valueEUR 4.00EUR 29.00
Xetra - Stocks0.1% of trade valueEUR 4.00EUR 99.00

Netherlands

Euro-denominated0.1% of trade valueEUR 4.00EUR 29.00
USD-denominated0.1% of trade valueUSD 5.00USD 42.00

Sweden

All0.1% of trade valueSEK 30.00SEK 300.00

Switzerland

All0.1% of trade valueCHF 10.00None

United Kingdom

Up to GBP 50,000 Trade ValueGBP 6.00GBP 6.00GBP 6.00
>GBP 50,000 Trade ValueGBP 6.00 + 0.05% of incremental trade value>GBP 50,000GBP 6.00GBP 29.00
LSE International Order BookUSD 0.05% of trade valueUSD 5.00None

Japan
All0.10% of trade value

SGD 3.00

(USD 2.50)

N/A

For a full list and more information on Interactive Brokers' commission fees, click here.

Interactive Brokers offers all the same standard trading tools that you would expect from AmeriTrade or any other big name online broker.

For more information on Interactive Brokers, check out their website at www.interactivebrokers.com.

Here is some information on two more brokers that will allow you to trade Canadian stocks, though I am less familiar with these companies:

CIBC Investor's Edge

CIBC charges $28.95 for trades up to 1,000 shares in U.S.

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or Canadian equities. The majority of mutual funds available through CIBC can be purchased without front­-end loads.

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As long as you keep $10,000 in your non­registered account, you won't have to pay any maintenance fees. They also provide a nifty commission calculator that you can access here.

For more information on CIBC Investor's Edge, check out their website at www.investorsedge.cibc.com.

Questrade

Questrade replaced eNorthern in 2008.

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This site offers democratic pricing with commissions at 1 cent per share, and a minimum of $4.95 and maximum of $9.95. No minimum balance is required, but a number of additional fees might be tacked on.

Options trading on canadian securities

Questrade has fees for phone trades and partial fills, and data fees, SEC fees, and Exchange and ECN fees may apply. There is also a $5 flat per-day commission on any day you trade a USD security in your RESP.

For more information on Questrade, check out their website at www.questrade.com.

Other brokerages that readers have sent in include:

One last option...

I know there are many people who still feel uncomfortable trading stocks online and prefer to do it the old-fashioned way.

Options trading on canadian securities

If this sounds like something you're interested in, then I recommend going through Canaccord Capital Corp.

We have established a contact for readers who are interested in buying Canadian stocks this way. Contact Mike Bruin through his email address at [email protected] You can also call Mike toll ­free at 800.663.8061 (ext.

Options trading on canadian securities

7438), or directly at 604.643.7438.

Well, there you have it: a brief rundown of options for buying Canadian stocks. They are all pretty much the same — give or take a few dollars or cents on flat fees and commission rates — but be sure to do your due diligence to find the broker that fits your personal trading style.

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