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Discount Brokerage Weekly Roundup – June 6, 2014

Another day, another new high – wait is it déjà vu all over again? Impressively, the major stock markets feel like a Jeopardy champ on a bit of a hot streak. As this past week showed, however, even winning streaks can end when you bet big and bet wrong.

Self-directed investors as well as discount brokerages north and south of the border continue to benefit from stronger markets. In this week’s roundup we look at an interesting event that may be a sign of the shift in investor focus (at least for the near term), some discount brokers that appear to be raising the stakes going into the summer with deals and additional advertising, an interesting blip on a major US discount brokerage’s performance numbers and finally we roll through the Canadian investor forums to bring you some noteworthy conversations.

Digging for Better Times

In a sign of an evolving marketplace for Canadian investors, the Canadian Investor Conference put on by Cambridge House International took place earlier in the week. This was the first ‘diversified’ sector conference which featured companies and speakers from several major sectors including mining & exploration, technology and others.

This conference replaced the World Resource Investment Conference (WRIC) which typically would have taken place in June. The recent challenges faced by the junior mining and exploration sector have been no secret and thus an entire conference dedicated to a sector of companies that appear to be reigning in spending may have been a stretch.   As its replacement, however, the Canadian Investor Conference offered something familiar but also some very interesting new features.

Among the highlights of the conference were the lineup of interesting personalities from the technology & investment space, a showcase of non-public companies working on innovative tech/green tech initiatives and scheduled meetings with company reps. The Toronto version of the Canadian Investor Conference runs from September 25th to 26th.

New month, new deals

Although June is barely out of the gates, it didn’t take too long for the deals action to start heating up again. Earlier this week, Questrade re-launched their 3 months of unlimited trading offer, perhaps as other brokerages gear down for the summer. Individuals who deposit $50,000 or more are eligible for 3 months of unlimited trading. For those who deposit between $25,000 and $49,999, they may be eligible for two months of commission-free trading and for those who deposit $1,000 to $24,999, there is one month of commission-free trading up for grabs.

June is a big month for online brokerage deals with about half of the current offers set to expire by month’s end. Given that many Canadian brokerages are in the last half of their fiscal year, there’s likely to be a stronger push to meet targets for their year-end (October 31st) which could include quite a bit of promotional activity through the summer and into the fall.

Staying Top of Mind

Given the recent run up in the markets, it’s likely (based on historical behaviours) that many retail investors might be considering stepping back into the markets (if they haven’t already done so). For that reason, online brokerages, such as National Bank Direct Brokerage, will be looking to attract the attention of investors. We spotted an interesting video ad produced for NBDB which highlights the importance of staying current and top of mind amongst the assortment of online brokerage choices.

Trading Metrics

As per the usual cycle, Interactive Brokers recently reported their trading metrics for May 2014. Although most of the numbers on a year over year basis looked better, one stat in particular dipped enough to raise an eyebrow. Interactive Brokers reported 518,000 Daily Average Revenue Trades (DARTs) for May which was 10% lower than the prior month. Given where the markets have headed, whether this was ‘sell in May and go away’ or traders just riding the trend remains to be seen. Another very interesting data point (especially for the price shoppers) is the average commission per equity trade which came in at $2.07 – far lower than almost all brokerages offer here in Canada (even with the exchange rate).

From the Forums

Canadian investors appear to be busy enjoying the good weather rather than leaned over their computer screens. In this abbreviated forums scan, we showcase an interesting conversation between investors that started by requesting historical trading data from a particular brokerage.

The ability to pull historical data is very valuable for active investors however different online brokerages have different windows of time that a user can actually go back and retrieve data from. While better practice is to record one’s trading activities on a regular basis (either on a spreadsheet or software or (gasp) with paper), doing so can be laborious. Check out the link above to see what insight investors had to offer on getting the data of trades past.

That does it for this edition of the roundup. Enjoy the heat and sunshine this weekend – and remember the tips for sticking around long enough to enjoy many more great days involve some good risk management for the heat and sunshine (aka stay cool and wear sunscreen!).

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