Month: April 2020

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Discount Brokerage Weekly Roundup – April 27, 2020

Here we are at almost the end of April and were it not for the intentional reminders as to the date, it certainly feels like the long day continues. Still, the goalposts matter. While dates aren’t moveable, it seems like other goalposts are being moved on DIY investors. Also, on the topic of goalposts, this post has some news of discount brokerages crushing their goals.

In this edition of the Roundup, we review an important development for DIY investors in which leveraged ETFs attached to the oil market have had to do some, um, creative maneuvering to stay liquid even though movement in oil appears to be grinding to a halt. From there, we flow into even more data from the online brokerage space on the scale and scope of activity by DIY investors entering into this market. As usual, we’ve collected chatter from investors online on Twitter and in the investor forums.

Consolidation Offers Little Consolation

There’s no denying it. These are bizarre times for even the most seasoned traders. This past week, with oil prices going negative to the tune of almost -$40 a barrel for WTI, the trading world was turned on its head, and with it, likely scores of DIY investors who sought to take advantage of the volatility swings in the price of oil via leveraged ETFs.

Alas, even the ETF providers could not stomach the volatility and certainly did not ever envision (or provision for) a world in which the price of oil could drop below zero. And yet, this is exactly what happened this past week.

One of the biggest Canadian names in the leveraged ETF plays for oil, Horizons ETFs, temporarily suspended new subscriptions for their BetaPro Crude Oil 2X Daily Bull/Bear products. In addition, the impacted ETFs (HOU/HOD) will no longer be set to double the daily performance of the underlying futures index they were tied to, but will instead correspond to 1X the daily performance. Finally, how they trade futures contracts is changing, with the underlying “roll dates” moving to the secondary futures contract month just 10 days into the primary contract.

Another big name in the leveraged ETF space, Direxion, had already taken measures to dial back their famous 3X leveraged products by 1X to now provide a leveraged exposure of 200% to a select set of indices.

As with the crypto and cannabis craze from 2018, the prospect of making lots of money in a short amount of time naturally pulls in speculators.

Products, such as leveraged ETFs, magnify the already volatile market movements, so “investors” get the possibility to make (or lose) significant returns in a short amount of time with the ease of buying or selling a stock. There is no need for any sophisticated transaction in a futures market: Just enter a ticker symbol with an online brokerage platform and go. Added to that, these leveraged ETFs can be part of a TFSA or RRSP, and the gains (or losses) can offer up the perfect storm of opportunity to grow wealth (or erode it) at a pace that far outstrips salary growth, high-interest savings accounts or even the moves in most individual securities.

It wasn’t just leveraged ETFs in the oil market that suffered catastrophic failures either. The popular United States Oil Fund (ticker USO), which is supposed to track the price of oil, has been decimated by the volatility in oil prices and last week initiated an 8-for-1 reverse stock split (aka consolidation) to boost the price per share.

Like some of its leveraged Canadian counterparts, the futures contract that the fund tracks has been pushed further forward, meaning that investors are betting on the price of oil much further into the future than they have historically with this kind of vehicle. There is some damning commentary coming out of the US for commodity-focused ETFs, and as such the “future” of these kinds of ETFs, especially those focused on oil, is highly questionable. The pessimism on these ETFs in the US market is high and growing, which portends bad news for the Canadian counterparts.

Ultimately, DIY investors interested in making a quick buck may roll the dice with a leveraged ETF without fully understanding the vehicle itself. This puts Canadian online brokerages in a bit of a conundrum. On the one hand, these ETFs generate substantial commission revenue, but on the other, their risk profile is not like that of other ETFs, and clients can be at serious risk of loss.

Some of the more spectacular losses that made the news include Interactive Brokers, which had to take almost a USD $90 million-dollar loss because several clients took heavy losses on their trading account, trading oil future contracts. And, investors in China who were able to trade individual barrels of oil found themselves on the hook for the negative price per barrel, meaning not only did they lose what they invested, they were exposed to the downside as well.

Although Canadian online brokerages are technically order-execution-only entities, the current COVID-19 fueled market conditions show that extreme volatility can take investors seriously offside, especially in some of the most popular products. The drastic maneuvers taken by the ETF issuers highlight the risks that ETFs themselves present to DIY investors – especially if they have leveraged ETFs within their stable. While providing advice on what is or is not an appropriate investment is not something online brokerages want to wade into, perhaps more visible warnings or tools that enable investors to easily discern risks seem like the prudent thing to be doing.

Putting the Pieces Together

There is a recurring theme to the data we’ve been reporting for the past several weeks: Now is a great time to be an online brokerage.

Updates from online brokerages on both sides of the border have been trickling in from various sources, including earnings reports, business updates and posts in various forms of reporting. The numbers continue to paint a picture where retail investors are flooding into the market in record-breaking numbers.

This past week, we learned a bit more about the scope of the DIY investor rush into the online investing market, as well as some insights and perspectives from leaders at several online brokerages who’ve commented on their business and business conditions.

Although we did mention them previously in last week’s Roundup, the largest online brokerage in the US, Charles Schwab, provided their spring business update this past week. This session provided additional colour on the numbers from the recent quarterly release as well as updates on where they’re forecasting for the remainder of the year. Of particular interest in this update was the scale and speed of the new account and asset growth. Schwab added 609K during Q1 of 2020, a 58% increase over the same period in 2019. Similarly, there was a 42% increase in net new assets, clocking in at USD $73.2 billion dollars.

Additionally, there was some interesting colour added to why cash balances were growing to the heightened levels. While during times of volatility, it was expected that cash would increase (e.g. investors may flee to cash for safety), what was curious was that it was more so a result of sales of fixed income assets rather than equities.

Another area that Schwab provided more detail on was the trading volume as well as the increase in volume from customer service touches. Despite the spike in business, the retail call volume was only 16% higher for Q1 2020 compared to Q1 2019. On the digital side, there was a 30% increase in digital logons across both mobile and online. This particular point about increased outreach of clients is interesting to compare against the Canadian experience; assuming that Canadian online brokerages are seeing comparable volume increases for calls, it is remarkable to hear the level of complaints and delays for such a modest spike in call volume. Again, this is simply an assumption based on the US market as a proxy for Canadian discount brokerages, so the increase in Canada could be substantially different.

At the other end of the spectrum of the online brokerage space in the US – at least as far as size and age is concerned – is news from Robinhood. This past week, this “millennial”-leaning online broker appeared on CNBC’s Mad Money and spoke to Jim Cramer about the state of the online investing marketplace and Robinhood’s place against the backdrop of consolidation. While there were several interesting points in this discussion, co-CEO Vlad Tenev shared a list of the top 10 stocks being purchased via Robinhood in March. These included:

  • Inovio
  • Ford
  • American Airlines
  • Boeing
  • Carnival Corp.
  • General Electric
  • Microsoft
  • Disney
  • Aurora
  • Tesla


While the trading volumes (up threefold) in March and the net deposits (up 17x compared to Q4 2019) are largely consistent with what other brokerages in the US have stated, what was perhaps the greatest insight from that interview was that Robinhood, according to Tenev, captured over 50% of new account opens at online brokerages in the US. Yes, that’s not a typo. Despite stumbles at the beginning of March with trading outages, Robinhood managed to secure more account opens than all of the major online brokerages in the US combined.

With all of the data in the US online brokerage space pointing to a phenomenally busy March and Q1, it was refreshing to see some details on the Canadian space shared from BMO InvestorLine president Silvio Stroescu in a great piece from Wealth Professional that appeared last week.

Contained in that commentary on how BMO’s wealth management team has been navigating the crisis, there were also some interesting quantitative components. For example, new account openings trended about three times higher than seasonal peaks in January and February. Daily trading volumes clocked in at two and half times higher than trends, and fund transfers were up to 10 times higher than in the past.

It wasn’t just the quantitative context that was shared either. Insights on the difference in behaviour between millennial investors and “Gen X” was also curious to see and lines up in many ways with what has been playing out in the data from the US online brokerage market. For example, millennial clients “added more cash to their accounts and bought into the market more aggressively than older peers.” In contrast, Gen X and baby boomers sold assets to build up liquidity reserves, something that was also reflected in the Schwab data.

Despite the massive economic shock taking place in countries across the globe, the data from online brokerages in both Canada and the US provides some suggestion as to why stock markets are as high as they are. Clearly there are pools of buyers, many of them younger investors, who are flooding into the stock market to take advantage of the volatility in hopes of picking up stocks that can help them boost their portfolio sizes.

Although many online brokerages have had to learn on the fly as to how to operate remotely and withstand surging demand, for the most part they have been able to do so successfully. For Canadian online brokerages in particular, if the data points from BMO InvestorLine are extended to the industry in Canada as a whole, higher commissions weren’t enough of a hurdle to dissuade many Canadian investors from making record high numbers of trades and thus generating a watershed of earnings for the Canadian discount brokerages.

Given the boost to earnings, it begs the question going forward as to where the added revenues will be deployed to next.

One hint was offered by Stroesco at the end of the piece, where he stated that “In the new context, investors will be seeking and willing to consume more financial advice in their digital travels, with a vested interest and more scrutiny on value created.”

While difficult to pin down exactly where things are going to head to next, the clear signal from across the online brokerage space is that there is a strong endorsement that there are clients still willing and excited to trade, even in the most bizarre of times.

Discount Brokerage Tweets of the Week

From the Forums

Back and Better Than Ever?

An anxious Redditor takes to the forum to pose the question of whether or not this current situation signals a “Great Depression 2.0.” A discussion weighing the current data around COVID-19 and the capital markets against past recessions ensues in this post.

Squaring Up

In this post, a forum user unsatisfied with his money manager’s actions in the lead-up to the COVID-19 pandemic takes to the forums to ask about the possibility of “Shorting the Box.”

Into the Close

The perennial challenge to traders is that data becomes available at the “hard right edge” of the chart. Moving through the upcoming week will be an interesting proposition for DIY investors. On the one hand, the historic movements in the oil market cannot be ignored, and on the other, the stock markets are already pricing in the world moving on. These are bizarre times to be sure, but it looks like the first one returning to working as usual is the “invisible hand” of the market – let’s hope it still has enough sanitizer left to make it through the next week. Stay safe and healthy!

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Discount Brokerage Weekly Roundup – April 20, 2020

Another week gone by; however, the metrics that matter aren’t hours and seconds, it seems. Tests, cases, and, unfortunately, deaths are part of a grim set of metrics that serve as the very human backdrop to everybody’s new normal. While it’s harder to distance ourselves from the news than it is from one another, what is clear is that markets and online brokerages are pressing forward albeit in surges and stumbles.

In this edition of the Roundup, we continue to track data on the surge in interest by DIY investors to step into the markets, with new information shedding light on what is also likely happening here in Canada. From there, we take a look at how Canadian discount brokerages of various stripes are walking the tightrope of advertising during the time of COVID-19. As usual, we serve up the latest DIY investor comments from Twitter and the investor forums.

Inflection Points: Earnings Data Shows Trading Surge at Online Brokerages

Of the many letters being thrown around during the COVID-19 crisis, the one that seems to capture many themes concurrently is the letter V. For online investors (and by extension online brokerages), the two variations of V that matter are volatility and volume. Stock market volatility during March has been unprecedented and volume of trades executed equally so. The next V that might come into play is the shape of the recovery, which many speculators are hoping will be swift and sharp.

Earlier this month, Interactive Brokers reported a sharp increase in the number of online discount brokerage accounts opened – an eye-watering 22% increase compared to last year. This past week, another (arguably the most) important online brokerage in the US, Charles Schwab, reported its earnings. Though it did not meet estimates on the earnings front, tucked inside the earnings announcement were two very incredible facts. The first is that trading volumes in March represented 27 out of the 30 highest trading volumes of all time for this massive online brokerage. Daily average revenue trades (or DARTs) clocked in at 1.54 million, a 98% increase for the quarter. The second important piece of information contained in that earnings announcement is the tsunami of account openings – over 280K new online brokerage accounts opened in March alone and bringing the total number of online investing accounts to 609,000 accounts for the quarter and a total of 12.7 million.

Additional data from Robinhood, the firm that was the proverbial straw which took the price of commissions for trading in the US ultimately down to zero, also crossed the radar last week. The data reported that their daily trading volume was threefold higher in March compared to Q4 of 2019 and they attracted a tenfold increase in net deposits which ultimately led to revenue of USD $60 million in March, triple what they had made in February. Indeed, these numbers helped bolster the case for Robinhood to be raising USD $250 million, which puts their valuation at USD $8 billion.

While Canadian markets are different than in the US, one reasonable inference to draw is that Canadian discount brokerages have seen a similar spike in their business that likely rivals anything they have ever experienced – including the crypto and cannabis surges of 2018.

Unlike the online brokerage markets in the US, most Canadian online brokerages have yet to drop their commission fees substantially and as a result, have likely generated significant commission revenues from heightened trading activity.

Indeed, until the return to work fully takes shape in Canada and the US, the likelihood of stock market volatility is going to remain high, which is great news for active traders and some of the speculators being pulled into the markets in search of a quick return. It is also great news for online brokerages in Canada who stand to benefit from the increased trading activity. The exact letter that defines the recovery – whether it’s a V, U, W or L – will determine what spells success or failure for the near term.

Online Brokerage Advertising in the Age of COVID-19

The data gathered from online brokerage activity over the past several weeks has validated the immense interest in trading online. For Canadian discount brokerages, the ‘usual’ playbook during predictable times of investor interest is to advertise. After all, if people are out looking for an online brokerage account or interested in trading, it makes sense to be visible.

These are unusual times, however, so it is interesting to see how online brokerages are wading into the ‘marketing’ efforts during this tenuous time of ‘doomscrolling’ and massive social media content consumption.

For the moment, three Canadian online brokerages that have been spotted advertising on Facebook and/or Instagram are Qtrade Investor, Scotia iTRADE, and TD Direct Investing.

A quick scan of the ads show something interesting – that both Scotia iTRADE and TD Direct Investing are featuring female protagonists as the DIY investor. In the case of Scotia iTRADE, they opted to push their campaign from the fall of 2019 which featured “self-starters” – essentially entrepreneurs who also were notable social media personalities to boost the brand with a younger audience. By comparison, TD Direct Investing also took a much more contemporary view of a DIY investor, not sitting at home but out and about on their phone.

During this current state of affairs, both bank-owned brokerages’ ads seem to strike a similar tone but neither quite give a nod to the current sentiment. In contrast, Qtrade Investor’s ad is simple and strikes a thankfully positive tone to the long list of bad news stories and jarring autoplay videos. Pleasant clouds and blue skies are almost a setup for what seems like a travel ad, but nonetheless set a backdrop for a compelling message proving the point that sometimes less is more, including on social media. More importantly, it seems like an astute “read the room” move.

Another small blip on the radar this week was the move by Virtual Brokers to tweet out an investor education piece to help explain some investing basics. Normally a tweet by an online brokerage doesn’t really seem newsworthy; however, in this particular context it is the first post by Virtual Brokers in some time, so the timing and the content are interesting, especially against the backdrop of what is likely a pick up in DIY investor interest.

That said, the push to advertise or broadcast content on social media is not without some degree of risk. There continues to be negative consumer sentiment about the experience of wait times to get in touch with online brokerages here in Canada, especially for the resolution of issues that require a phone call. A case in point is this post by Questrade on Twitter, which managed to get a pointed response focusing on wait times.

And they are not alone. A scan of the tweets of the week continues to reveal cringe-worthy wait times to talk to an online brokerage that references brokerages that are actively advertising at this time and those that aren’t. Even the most astute marketing team coming into the crisis couldn’t escape the fundamental requirement to have the product fulfill the promise of reliability. Wealthsimple Trade continued to experience system and trading issues last week, creating its own doomscrolling feed of unhappy campers.

There’s no doubt the level of interest for DIY investors to start trading in the market has surged. As many investors have rushed into opening new accounts and many existing account holders have been more active than in some time, systems are starting to show their strain. For Canadian online brokerages, the difficulty is to make sure their systems are stable enough to handle the flood of interest.

With that in mind, we anticipate more online brokerages might start leaning into their advertising programs on social media, and some with promotional offers, to get the right kind of attention at a moment when DIY investors are hungry for some good news.

At the moment, markets seem to have found their footing – a situation that could change at any point. Here’s hoping several Canadian online brokerages start to find theirs.

Discount Brokerage Tweets of the Week

From the Forums

(Mis)Take Your Time

A forum user who received both EI and CERB asks what to do with the money while the mistake is sorted. Fellow Redditors offer advice and their experience with current COVID-19 related funding in this post.

Time to Think Again

After 20 years of investing, a user takes to the forums to lament the current state of their portfolio in this post. Commentators offer their insight into the current markets as well as how the poster might realign their goals with their investment strategy.

Into the Close

Were it any other time, the horrific news of a mass shooting in Canada would be the only terrible story the country has to digest. Against the backdrop of the COVID-19 stories, this makes this senseless act of violence even more heartbreaking and amplifies the heroics of first responders. It is truly shocking. Our deepest condolences to the families of those who lost a loved one in this tragedy – we are thinking of you and sending you wishes for strength.

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Discount Brokerage Weekly Roundup – April 13, 2020

For DIY investors, last week’s market bounce is sure to put a spring back into their step, even though stocks are trading well below their levels from just a few weeks ago. Nonetheless, with the fear gauge falling and DIY investors hoping to find treasures in the market, one spoiler to that momentum is that technology and capacity issues are making access to trading online more challenging than anyone wants.

In this edition of the Roundup, we focus in on yet another series of outages and interruptions that took place at Canadian online discount brokerages last week and what that could signal for the industry in the post-COVID-19 era. From there, we highlight a couple of interesting virtual developments set to take place later on in the month that might offer additional guidance on where online brokerages in the US might look to next when trying to navigate the impact that Coronavirus is having on markets. As always, we’ll look to some rather colourful commentary on Twitter and in the investor forums to close things out.

More Outages at Online Brokerages

Markets have continued their volatile dips and surges, and while this past week has seen many stocks rebound, DIY investors yet again have found themselves subject to outages and interruptions of service at Canadian online brokerages.

This time it was a series of outages at CIBC Investor’s Edge, BMO InvestorLine, TD Direct Investing and Wealthsimple Trade that hampered the ability of DIY investors to trade and angered enough of them to the point where they posted their struggles directly onto Twitter.

Last month, there was a feature piece in the Financial Post about Canadian discount brokerages suffering from outages and complaints from active investors who were either sidelined by not being able to log in or trade.

While it is true that technology can occasionally fail, the timing couldn’t be worse. The compounding effects of site outages during heightened volatility, as well as surges in call volume, mean that DIY investors are ultimately left with no viable options other than to wait out whatever interruption or disruption they are facing. A quick scan of the tweets of the week below showcases some of the scarier wait times and frustrations experienced by DIY investors encountering these current trading conditions.

Although there are currently some very major issues taking the spotlight, the recurring issues with uptime and stability will ultimately attract the attention of media and, from there, regulatory agencies. At the very least, DIY investors ought to be aware of what kind of service experience they can expect from an online discount brokerage, not just in terms of wait times or features (like a call back), but also in terms of uptime and platform outages.

The COVID-19 pandemic has shown that governments and industries are capable of moving remarkably quickly when required. With the shift in conversation about COVID-19 starting to move towards describing ‘the new normal’ and life after the peak has passed, there will hopefully be a conversation about better equipping service and systems to contend with surges in traffic and requests. There will undoubtedly be changes that will be put in place and it would be wise for the industry as a whole to use the opportunity to mobilize around continuity and surge protection.

For now, the message to active DIY investors being relayed by the delays and outages is sadly this: beware of your online discount brokerage, it may not be there when you need it. Plan accordingly.

Online Brokerages Navigating COVID-19

When it comes to DIY investing, one of the more interesting things that being a shareholder entails, regardless of size, is the stockholders’ meeting. Of course, now that meeting in person is a non-starter for a variety of companies, the annual general meeting is going online. The combination of investors being sequestered at home and the online availability of these meetings could make for interesting times ahead. At the very least, it may provide a palette cleanser from a binge watch series on Netflix or Amazon Prime.

For the online discount brokerage world, we’ll be keeping an eye on Interactive Brokers, who has their annual meeting on April 23rd, to see what interesting announcements and questions might arise at that time.

Another interesting development coming out of the US will be from the largest online brokerage, Charles Schwab, as they are set to provide their spring business update on April 21st.

Already here in Canada, the largest banks have held their annual general meetings virtually to maintain social distancing protocols. In the Q&A sections, for example, it has been valuable to hear from the senior leadership with regards to the current COVID-19 generated crisis and to get a sense of where their priorities are on a number of key issues.

Discount Brokerage Tweets of the Week

From the Forums

(Mort)Gauging the Market

A Redditor asks whether paying their mortgage faster is better than investing in the current market in this post. Fellow users give their advice on how they should define their goals and the different decisions that they can make with those goals in mind.

Down the Habit Hole

In this post, Redditors discuss how the recent market downturn has impacted their investing habits. Different users lay out their plans and potential outlooks for the coming year.

 

Into the Close

That brings another edition of the Roundup to a close. This one was a little shorter than normal (just like last week!). However, as many Canadian online brokerages are finding their footing with transitioning many systems to remote operation and getting a handle on the flood of interest, we expect more activity to be unfolding in the weeks to come. In the meantime, a deal reached on oil production cuts by OPEC(++) will be yet another reason to expect a volatile week ahead. Have a safe, healthy, and profitable week!

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Discount Brokerage Weekly Roundup – April 6, 2020

April has finally arrived. As much as the year is moving quickly, it simultaneously feels like it is moving incredibly slowly. As with the reality in markets, any bit of information about where things go next with the COVID-19 crisis is highly prized.

In this edition of the Roundup, we wade into the shallow deals and promotions pool to start April – in spite of record online investor interest in trading online. From there, we shine a spotlight on a major Canadian discount brokerage that looks like they will once again shake up the features offered by other online brokers. We close out this edition of the Roundup with highlights from investor forums and chatter from the Twitterverse.

New Month, Familiar Deals

It’s the start of a new month. Not just any month either – the one month in the year that typically starts off with some good humour. Alas, the lack of new discount brokerage deals or promotions to kick off the month is no joke.

Like the markets themselves, there has been a considerable pullback in the number of brokerages participating in the most appealing deals and promotions categories: cash back and commission-free trading offers.

If we were in ‘normal’ times, this situation might not seem as unusual after the post-RRSP deadline push. After all, it is expected that leading into that deadline, investors are already actively thinking about their money and investments.

That said, these are not normal times at all.

Despite what is clearly the grimmest economic picture many of us have ever lived through, for Canadian online brokerages, what should normally have been a very slow period in April has turned into one of the busiest seasons on record.

Likely a result of the unprecedented volatility, many folks self-isolating and therefore working from home, and with only so much streaming content to be viewed, means that there is now attention being put on stocks and trading online in volumes that likely exceed the Great Financial Crisis. What is very different now, however, is the scale and scope of impact to the economy from the measures being taken by countries across the globe to flatten the curve on COVID-19 spreading.

With so many prized stocks now on a literal fire sale, bargain hunting investors have been rushing into the market through the door that is the online brokerage. Normally, when Canadians are this interested in trading stocks, online brokerages ramp up their offers and incentives. To reiterate – these are not normal times – and one clear indicator of that is the lack of promotional offers that have been deployed for DIY investors.

Nobody wants to be seen to be taking advantage of a crisis, however, and the conundrum for Canadian online brokerages is this: do nothing about reducing fees/commissions at this time or lowering barriers for folks getting into the markets, then ‘business as usual’ could be like profiteering. Conversely, launching a promotion that would be talk up getting into the most volatile market ever could seem remarkably tone deaf.

What is becoming clear in the COVID-19 pandemic is that major brands are stepping up to help in whatever ways they can. Apple is stepping up to make 1 million face shields a week. Tesla is building ventilators. Breweries and even Louis Vuitton are making hand sanitizer. As “order execution only” entities, the single best goodwill gesture for Canadian discount brokerages to offer to Canadians would be waiving of commission or administrative fees – especially for low balances or inactivity – and especially to those seeking financial relief.

In these far-from-normal times, a rethink is required on what brands stand for and mean in the face of this collective crisis. Normally a deal or promotion is intended to appeal to new clients. Perhaps this is the moment when it would be appropriate to consider promoting the infectious kindness that shows we’re all in this together and that even small acts of kindness can go a long way.

RBC Direct Investing Takes Trading Quotes to the Next Level

It’s one thing to be making investment decisions in a volatile market – but for many active investors, it’s a must to be able to see where there are areas of demand or supply when trying to fine-tune a decision to buy or sell. The stakes are much higher when actively investing, so getting the most accurate and up-to-date information on market prices are key. Enter the world of streaming and in-depth quotes.

Late last year, RBC Direct Investing enabled free Level 1 real-time streaming price quotes for TSX and TSX Venture equities and ETFs. This past week, RBC DI rolled out what is arguably one of the best data features after real-time streaming Level 1 quotes: free streaming Level 2 quotes for TSX and TSX-V listed stocks and ETFs.

For DIY investors, and the online brokerage space here in Canada, it is hard to overstate the value this brings to investing online.

Level 2 quotes, also known as depth of market, can cost over $100 per month, and while the new feature from RBC Direct Investing does not bring with it a top-tier trading platform, the value here is hard to overlook.

The table below compares the prices per month that streaming Level 2 quotes would cost at comparable online brokerages in Canada and it is evident that this feature is anything but cheap.

Online Brokerage Trades per Month (TPM) or Trades per Quarter (TPQ) to Waive Quote Fees Quote Fees without Activity Waiver
BMO InvestorLine 25 (TPM); 75 (TPQ) $125/mo
Disnat Direct (Desjardins Online Brokerage) 20 (TPM); 60 (TPQ) $95/mo
National Bank Direct Brokerage 100 (TPM); 300 (TPQ) $148/mo
Questrade 81 (TPM); 243 (TPQ) $89/mo
Scotia iTRADE 10 (TPM); 30 (TPQ) $79.95/mo
TD Direct Investing 10 (TPM); 30 (TPQ) $69/mo
Virtual Brokers $99/mo

 

It is important to once again point out, however, that the prices for this streaming data option at other online brokerages referenced above usually come bundled with a sophisticated trading platform with many more bells and whistles for fast trade execution and charting capabilities than does the web experience at RBC DI.

That said, most of those Canadian discount brokerages referenced above waive some, most, or all of the data fee only when a minimum trading activity or asset deposit threshold is reached. So, the standard offering of the RBC Direct Investing streaming Level 2 quote is of particular appeal to investors who don’t mind the web interface and who can’t or don’t want to constantly have to trade to maintain an activity threshold. Of course, spending on commissions to get a “free” data feed doesn’t quite add up as a winning strategy but that is exactly the position DIY investors would be in at most brokerages.

For everyday investors, free streaming Level 2 quotes may or may not be something that is widely accessed, but for those investors who appreciate the added window into areas of potential pricing support or resistance, this is a very useful feature. In particular, as volatility increases in many illiquid stocks and bid/ask spreads widen, placing market orders can end up in overpaying for a security, and placing a limit order without knowing what else everyone is either selling or buying at puts investors at a significant information disadvantage.

While not quite the bombshell of dropping commission prices, RBC Direct Investing has unquestionably raised the bar considerably for other Canadian online brokerages, especially their bank-owned brokerage peers.

The standard web-based browser experience now including streaming Level 2 quotes means that other online brokerages will have to work harder to adjust their value proposition to a somewhat active or sophisticated investor. Even with so much attention being drawn away from online brokerage features these days, it’s safe to say RBC Direct Investing’s position in the online brokerage race just leveled up.

Discount Brokerage Tweets of the Week

From the Forums

The Best Bet

A Redditor puts forward the question of whether anyone is betting against the market in anticipation of a crash in this post. Fellow forum users go back and forth on the merits of buying inverse ETFs and their plans for the coming weeks and months.

The Long Game

A new investor turns to the forum for advice on how to make sound investments for the long term while the market is still reeling from the impact of COVID-19. In this post, Redditors give advice on how to set up the right portfolio and think beyond the immediate market.

Into the Close

Despite the wild swings in the market, the biggest and most important stories that need to be told are the ones of the brave frontline workers putting themselves in harm’s way and fighting COVID-19, or those mobilizing what they can to push back this sweeping contagion. Thank you to everyone fighting the good fight.

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Discount Brokerage Deals & Promotions – April, 2020

*Updated April 7* It’s finally April and, after the unprecedented changes and challenges that have unfolded over the past month, we would love to say that current world events are nothing but an April Fool’s Day joke gone wrong but sadly, that isn’t the case. 

To start off the month, online brokerages have opted to stick to tried-and-true offerings, perhaps as a result of the air of uncertainty and instability that currently looms over the markets. 

Even with volatility and turbulence rocking the markets in the past month, which has rightfully left many investors feeling panicked, there has been an emergence of risk-taking investors who have been trying to hastily enter the markets in hopes of making fast money or picking up assets at low prices. 

That said, investors should be prepared to wait. Increased interest and call volumes have put a strain on online brokerage technical systems and client service teams – here’s hoping there’s some good music to pass the time on hold.

For investors who are keen on moving fast and stepping into the present market, scroll on to review the current deals and promotions activity from Canadian discount brokerages this month.

Expired Deals

Two deals officially concluded at the end of March. The first was RBC Direct Investing’s promotion that offered 25 commission-free trades with the opening of a new account, which ended on March 27th.

Another deal that expired in March was Qtrade Investor’s cash back promotion, which officially concluded on March 31st. If cash back promotions are what you’re in the market for, though, be sure to scroll down to the table below for similar offerings.

Extended Deals

No extended deals to report at this time.

New Deals

*Update: Apr. 7 – This month, we’re introducing a new category of deals to the tables below: offers for young investors. Whether for yourself, or for someone you may know, this is a great resource for younger investors who may be looking to get started in the markets. It is worth mentioning that different online brokerages have different definitions of what a “young investor” means, so be sure to check to see if you qualify. 

CIBC Investor’s Edge offers special student pricing of $5.95 per trade if you already have an eligible CIBC Account for students, plus save on annual account fees. Scroll down for more details.

Investors within the age range of 18 to 30 are eligible for two current deals. The first is the Broker@age 18-30 promotion from Desjardins Online Brokerage (Disnat), which they’ve stated is “the perfect starter kit to help you invest in the markets.” The second promotion available for investors within this age group is the special Young Investor Pricing offered by Qtrade Investor. For more details, see the tables below. 

Investors who are up to 26 years in age are eligible for two promotions. At Scotia iTrade, young investors can save on administration fees with their Young Investors Offer. At Virtual Brokers, clients in this age range can take advantage of their zero account administration fee offer. See tables below for more details. 

National Bank Direct Brokerage is offering a reduced pricing structure for young professionals and students of various fields. Scroll down to discover which fields are eligible.

Finally, RBC Direct Investing is offering to waive the account maintenance fee for clients who currently have or had an RBC Student Account (within the past five years) with them. More details in the tables below.*


Discount Brokerage Deals

  1. Cash Back/Free Trade/Product Offer Promotions
  2. Referral Promotions
  3. Transfer Fee Promotions
  4. Contests & Other Offers
  5. Digital Advice + Roboadvisor Promotions
  6. Offers for Young Investors

Cash Back/Free Trade/Product Offer Promotions

Company Brief Description Minimum Deposit Amount Commission/Cash Offer/Promotion Type Time Limit to Use Commission/Cash Offer Details Link Deadline
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive $88 in commission credits (up to 17 commission-free trades). Use promo code SPARX88 when signing up. Be sure to read terms and conditions carefully. $1,000 $88 commission credit 60 days Access this offer by clicking here: $88 commission-credit offer . For full terms and conditions, click here. none
Open and fund a new account (TFSA, Margin or RRSP) with at least $1,000 and you may be eligible to receive 5 commission-free trades. Use promo code 5FREETRADES when signing up. Be sure to read terms and conditions carefully. $1,000 5 commission-free trades 60 days 5 commission-free trade offer December 31, 2020
Scotia iTrade Open and fund a new Scotia iTrade account to be eligible for up to $1,500 in cash back and $6.99 commission pricing, or up to 500 free equity trades. The amount of cashback and free trades are dependent on the funding of your account. Take a look at the offer details link for further information. $5,000 Cash + discounted commissions, or free trades. $6.99 trades available until June 30, 2020; Cash or commission rebate for free trades available until July 31, 2020. iTrade Offer Details February 29, 2020
Open a new RBC Direct Investing account by March 27th and you may be eligible for 25 commission-free equity and ETF trades. You must deposit or transfer $5,000 in your account by May 8th, 2020 to be able to use this promotion. Make sure that the offer code MFTC2 is applied during account opening. As always, be sure to take a look at the terms and conditions for further details. $5,000 25 commission-free trades 1 year Commission-Free Offer Details March 27, 2020
Open and fund a qualifying new or existing account at TD Direct Investing with at least A) $15,000; B) $25,000; C) $100,000; D) $250,000 or E) $500,000 or more and you may be eligible to receive a cash back reward up to A) $100; B) $200; C) $300; D) $500 or E) $1,000. Use promo code RSPCash20 when applying online. Be sure to read full terms and conditions. A) $15,000 B) $25,000 C) $100,000 D) $250,000 E) $500,000 A) $100 B) $200 C) $300 D) $500 E) $1,000 Cash back will be deposited by Aug. 16, 2020. TD Direct Investing Promotion March 03, 2020
Open and fund a new qualifying account with at least $25,000 and you may qualify for one month of unlimited commission-free trades and up to one month free of an advanced data package. Use promo code ADVANTAGE14 when opening a new account. Be sure to read terms and conditions for full details. $25,000 commission-free trades for 1 month + 1 month of advanced data. 1 month Active Trader Program December 31, 2020
When you transfer funds from another account into a CIBC Investor’s Edge account with assets worth at least A) $25,000; B) $50,000; C) $100,000, you may be eligible to receive A) $100; B) $200; or C) $400 in cash back. A) $25,000 B) $50,000 C) 100,000+ A) $100 B) $200 C) $400 Cash back will be deposited between May 18 – September 17, 2020. CIBC Cash Back Offer Details March 4, 2020
Open and fund a new Qtrade account with at least A) $25,000; B) $50,000 C) $100,00; D) $500,000; E) $1M or D) $2M+ in new assets by March 31, 2020 and you may be eligible to receive a cash bonus of A) $75; B) $150; C) $400; D) $800; E) $1,500 or F) $2,000. Individuals who contribute more than $1,000 through pre-authorized contributions by December 31, 2020 may also be eligible to receive an extra $50. Use promo code QTRADECASH at sign up to qualify. Be sure to read full terms and conditions for more details. A) $25,000 B) $50,000 C) $100,000 D) $500,000 E) $1M F) $2M+ A) $75 B) $175 C) $400 D) $800 E) $1,500 F) $2,000 The cash award will be credited to your cash/margin account in the week of October 30, 2020. Qtrade Investor Q1 2020 Cash Back Offer March 31, 2020
BMO InvestorLine Open a new qualifying account at BMO InvestorLine with new assets worth at least A) $50,000; B) $100,000; C) $250,000; D) $500,000 or E) $1M+, and you may be eligible to receive a cash back reward of up to A) $250; B) $450; C) $800; D) $1,000 or E) $2,000. Use promo code SPARXCASH when registering to qualify. Be sure to read full terms and conditions. A) $50,000 B) $100,000 C) $250,000 D) $500,000 E) $1M+ A) $250 B) $450 C) $800 D) $1,000 E) $2,000 Cash back will be deposited week of December 14, 2020 BMO InvestorLine Cash Back Offer Details June 1, 2020

Expired Offers
Last Updated: Apr. 01, 2020 15:44PT

Referral Promotions

Company Brief Description Minimum Deposit Amount Incentive Structure Time Limit to Use Commission/Cash Offer Deposit Details Link Deadline
Refer a friend to Questrade and when they open an account you receive $25 cash back and they receive either A) $25; B) $50; C) $75; D) $100; or E) $250 depending on the amount deposited amount. Enter code: 476104302388759 during account sign up to qualify. Be sure to read the terms and conditions for eligibility and additional bonus payment structure and minimum balance requirements. A) $1,000 B) $10,000 C) $25,000 D) $50,000 E) $100,000+ $25 cash back (for referrer per referral; $50 bonus cash back for every 3rd referral) For referred individuals: A) $25 cash back B) $50 cash back C) $75 cash back D) $100 cash back E) $250 cash back Cash deposited into Questrade billing account within 7 days after funding period ends (90 days) Refer a friend terms and conditions Code Number: 476104302388759 none
Scotia iTrade If you refer a friend/family member who is not already a Scotia iTRADE account holder to them, both you and your friend get a bonus of either cash or free trades. You have to use the referral form to pass along your info as well as your friend/family members’ contact info in order to qualify. There are lots of details/conditions to this deal so be sure to read the details link. A) $10,000 B) $50,000+ A) You(referrer): $50 or 10 free trades; Your “Friend”: $50 or 10 free trades (max total value:$99.90) B) You(referrer): $100 cash or 50 free trades; Your “Friend”: $100 cash or 50 free trades (max total value: $499.50) 60 days Refer A Friend to Scotia iTrade tbd
If you (an existing Qtrade Investor client) refer a new client to Qtrade Investor and they open an account with at least $1,000 the referrer and the referee may both be eligible to receive $25 cash. See terms and conditions for full details. $1,000 $25 cash back (for both referrer and referee) Cash deposited at the end of the month in which referee’s account funded Refer A Friend to Qtrade Investor none
You can send an invitation link from your Interactive Brokers profile to friends or business contacts for a chance to receive up to $200 reward for each successful referral. The referee needs to maintain $10,000 or more in their account. Please read the full terms and conditions. $10,000 Your can get 30% of the commission generated by each referred account for up to $200.00. Referred clients must maintain at least $10,000 or USD equivalent in their account. 1 year from the account opening date. Interactive Brokers Referral Program none
BMO InvestorLine If you (an existing BMO InvestorLine client) refer a new client to BMO InvestorLine and they open an account with at least $5,000 the referrer and the referee may both be eligible to receive $50 cash. To qualify the referee must use the email of the referrer that is linked to their BMO InvestorLine account. See terms and conditions for full details. $5,000 You(referrer): $50; Your Friend(referee): $50 Payout occurs 45 days after minimum 90 day holding period (subject to conditions). BMO InvestorLine Refer-a-Friend January 5, 2021

Expired Offers
Last Updated: Apr. 01, 2020 15:55PT

Transfer Fee Promotions

Company Brief Description Maximum Transfer Fee Coverage Amount Minimum Deposit Amount for Transfer Fee Eligibility Details Link Deadline
Move your brokerage account to Questrade and they’ll cover the transfer-out fee up to $150. $150 n/a Transfer Fee Promo none
Transfer $15,000 or more to RBC Direct Investing and they will pay up to $200 in transfer fees. $200 $15,000 Transfer Fee Rebate Details none
Transfer $15,000 or more into a new HSBC InvestDirect account and you may be eligible to have up to $152.55 in transfer fees covered. $152.55 $15,000 Confirmed via email contact with HSBC InvestDirect Rep. Contact client service for more information. none
Transfer $15,000 or more to Qtrade Investor from another brokerage and Qtrade Investor may cover up to $150 in transfer fees. See terms and conditions for more details. $150 $15,000 Transfer Fee Rebate none
Transfer $20,000 or more to a National Bank Direct Brokerage account and they will pay up to $135 plus taxes in transfer fees. $135 $20,000 Transfer Fee Rebate none
Transfer at least $25,000 or more in new assets to TD Direct Investing when opening a new account and you may qualify to have transfer fees reimbursed up to $150. Be sure to contact TD Direct Investing for further details. $150 $25,000 Transfer Fee Promo Contact client service for more information (1-800-465-5463). none
Transfer $25,000 or more into a CIBC Investor’s Edge account and they will reimburse up to $135 in brokerage transfer fees. Clients must call customer service to request rebate after transfer made. $135 $25,000 Confirmed with reps. Contact client service for more information (1-800-567-3343). none
BMO InvestorLine Open a new qualifying account with BMO InvestorLine or fund a qualifying existing account and you may be eligible to have transfer fees covered up to $200. Contact client service for more details. $200 Contact client service for more information Contact client service for more information (1-888-776-6886) none

Expired Offers
Disnat Desjardins Online Brokerage is offering up to $150 to cover the cost of transfer fees from another institution. To be eligible, new/existing clients need to deposit $10,000 into a Desjardins Online Brokerage account. You’ll have to call 1-866-873-7103 and mention promo code DisnatTransfer. See details link for more info. $150 $10,000 Disnat 1% Commission Credit Promo January 8, 2020
Last Updated: Apr. 01, 2020 15:47PT

Other Promotions

Company Brief Description Minimum Deposit Amount Required Details Link Deadline
Submit your information via the Hardbacon website to be referred to National Bank Direct Brokerage. Open and fund a qualifying account and you may receive up to 20 commission-free trades and discounted trading commissions. Be sure to read full terms and conditions. n/a Hardbacon Free Trade Promo none
Disnat Desjardins Online Brokerage is offering $50 in commission credits for new Disnat Classic clients depositing at least $1,000. See terms and conditions for full details. $1,000 Broker@ge 18-30 Promotion none
Scotia iTrade Scotiabank StartRight customers can receive 10 commission-free trades when investing $1,000 or more in a new Scotia iTrade account. Trades are good for use for up to 1 year from the date the account is funded. Use promo code SRPE15 when applying (in English) or SRPF15 when applying in French. Be sure to read full terms and conditions for full details. $1,000 StartRight Free Trade offer none

Expired Offers
Last Updated: Apr. 01, 2020 15:49PT

Digital Advice + Roboadvisor Promotions

Robo-advisor / Digital advisor Offer Type Offer Description Min. Deposit Reward / Promotion Promo Code Expiry Date Link
Discounted Management Open and fund a new Questrade Portfolio IQ account with a deposit of at least $1,000 and the first month of management will be free. For more information on Portfolio IQ, click the product link. $1,000 1st month no management fees KDKFNBBC None Questrade Portfolio IQ Promo Offer
Cash Back Open and fund a new or existing SmartFolio account with at least $1,000 and you could receive 0.5% cash back up to $1000. Use promo code PROMO1000 when opening a new account. See terms and conditions for full details. This offer can be combined with the refer-a-friend promotion. $1,000 0.5% cash back to a maximum of $1000. PROMO1000 January 2, 2020 SmartFolio Cash Back Promo
Discounted Management Open a new account with BMO SmartFolio and receive one year of management of up to $15,000 free. See offer terms and conditions for more details. $1,000 1 year no management fees STSF April 30, 2019 SmartFolio New Account Promotion
Cash Back – Referral BMO SmartFolio clients will receive $50 cash back for every friend or family member who opens and funds a new SmartFolio account. Friends and family referred to SmartFolio will receive $50 cash back for opening and funding an account, plus automatic enrollment into SmartFolio’s mass offer in market at the time. See offer terms and conditions for more details. $1,000 $50 cash back (referrer) $50 cash back (referee) Unique link generated from SmartFolio required. None SmartFolio Website
Transfer Fee Coverage Transfer at least $25,000 into Virtual Wealth when opening a new account and you may be eligible to have up to $150 in transfer fees covered by Virtual Wealth. $25,000 up to $150 in transfer fees covered None None Contact customer service directly for more information.
Last Updated: Apr. 01, 2020 15:54PT

Offers for Young Investors

Brokerage Offer Type Eligible Age Range / Client Segment Offer Description Min. Deposit Expiry Date Link
Student Pricing Clients with CIBC Smart™ Account for students $5.95 per trade and zero annual account fees not required None CIBC Student Pricing
Broker@ge 18-30 18-30 years old investors Benefits: * 5 free transactions (Minimum deposit of $1,000 required) * No inactivity fees * No asset minimum to maintain for free registered accounts * Exclusive events * Disnat Mobile App $1,000 None Broker@ge 18-30
Offers for professionals & Students Students in selected fields of study Professionals and students in the below fields can benefit from a reduced pricing structure: * Engineering students * Legal, accounting and business students * Healthcare students * Health sciences students * Nursing students Benefits: * $5.95 commission on equities * $0 commission on ETFs * $0 annual administration fee not required None NBDB Student Pricing
Young investor pricing 18-30 years old investors Benefits: * $7.75 commissions for stock and ETF trades * No account minimums * No quarterly admin fees min. $50 a month through pre-authorized contributions. None Young Investor Pricing
Waiver of account maintenance fee Clients who have RBC Student account, currently or in the past 5 years. The Maintenance Fee ($25 per quarter) is waived, regardless of the account balance. not required None Zero Account Management Fee
Young Investors Offer Clients below 26 years old Low activity account administration fee and the RSP account administration fee are waived. not required None Young Investors Offer
Zero Account Administration Fee Clients below 26 years old The account administration fee ($24.95 per quarter) is waived. not required None $0 Account Administration Fee
Last Updated: Apr. 01, 2020 15:54PT