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Discount Brokerage Weekly Roundup – June 20, 2014

It seems fitting to launch this week’s discount brokerage just ahead of the longest ‘day’ of the year. As the markets have proven yet again, the longs have it. Like the balance between day and night, however, there will inevitably be a shift. When that shift will happen, however, is anybody’s guess. For the moment, discount brokerages (north and south) are basking in sunshine, a thawing in investor attitudes towards participating in the market and hopefully not looking down.

This pre-summer solstice session of the weekly roundup features an interesting development and response to the high frequency trading stories unfolding in the US, a(nother) promotion launched by one of Canada’s independent online brokerages, news of expansion by an infrequent news maker as well as some interesting perspectives from Canadian investors on brokerages and DIY investing.

When the Market Gives You Lemons

Summertime and lemonade tend to go hand in hand. Of course, if you’re an online brokerage in the US, one of the biggest lemons that has been dealt to you has been the highly disruptive book ‘Flash Boys’ by Michael Lewis. The resulting debate on the benefits or harm that high frequency trading has (allegedly) caused for marketplace participants has quite literally put the squeeze on the stock prices of many US online brokerages.

This past week, however, as the US senate committee held proceedings investigating the practice of HFT, many online brokerages saw their stock prices rally – a sign that perhaps shorts (which had been on the rise for certain online brokerages) were starting to cover their positions.

An interesting twist in the HFT debate came via the form of an ad being run by Interactive Brokers. Specifically, Interactive Brokers’ CEO Thomas Peterffy took to the airwaves to specifically to tell clients and prospective clients that his firm ‘doesn’t trade against’ client orders. Check out the video below to see his take on why Interactive Brokers is saying “we’re one of the good guys”.

Welcome to Summer, eh?

While other brokerages are in somewhat of a holding pattern with regards to offering deals and promotions, Questrade recently launched yet another promotion aimed at acquiring new clients.

This past week, Questrade launched their ’25 free trade’ offer to coincide with the upcoming celebration Canada Day. The spin on this promotion: clients have until the end of 2014 to use the commission free trades (about 6 months). The deal is being offered to individuals making a deposit of $25,000 into a new Questrade account.

Qtrade Widens Network

In a slightly different approach to acquiring new clients, Qtrade Securities Inc decided to form a strategic partnership. Earlier this week they announced that they are working together with The Great-West Life Assurance Company and its subsidiary London Life in order to offer “to offer clients access to professional advice on securities including stocks and bonds through licensed investment advisors” as well as access to online brokerage services. Check out this article for additional details.

From the Forums

Comparing Brokerages

An uncommon comparison is the feature of this thread from the personal finance Canada section on Reddit. In it, a user is contemplating Questrade and CIBC Investor’s Edge. Hear what fellow readers had to say about the pros and cons of staying with CIBC or opening a Questrade account.

Don’t Hate the Game

There are definitely opposing opinions when it comes to investing. For those who decide to undertake the ‘DIY’ route, however, there can be moments where the voices of investing nay-sayers may be a cause for pause. In this thread, a younger investor shares their story of getting started in the market and asks for the community’s thoughts on why others look down on investing.

That does it for this week’s roundup. Even though tomorrow is officially the longest day of the year, many soccer fans have already seen that day come and go (sorry Spain and England!). However you decide to enjoy it, make it a safe and fun one! For our Quebec readers, bonne fête!



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