Category: Discount Brokerage News

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – August 15, 2014

As much as investors and traders alike are beholden to the hard right edge of a chart, there’s something precarious about staring back at a trend line breaking behind you. Despite the possible gloom (for the longs) in stock markets that accompanies a break of an upward trend, Canadian discount brokerages may be experiencing the beginning of a series of new trends. Of course, the funny thing about trends is that it’s often tricky to know just when you’re in or out of one.

In this week’s roundup we take a look at a number of ‘trendy’ stories including a feature upgrade from one of the bank-owned online brokerages, the positive boost that US brokerages are getting, and an interesting growth story investors may want to put on their radar. Of course we’ll cap this week’s roundup with a couple of interesting threads from the Canadian investing forums.

A Platform for Change

Two points a trend does not make – or does it? A developing story we’ve been tracking has been the interest Canadian online brokerages have been paying to trading platforms and user experience. As we reported in last week’s roundup, the announcement by Sterling Trader wanting to expand into Canada is probably just the tip of a platform iceberg floating towards Canadian self-directed investors.

This past week, Scotia iTrade announced upgrades to its mobile platform on Android and Blackberry as well as feature enhancements for its iPad app.

According to their announcement, the new features for the Android and Blackberry apps include fundamental data and analyst ratings, level 2 quotes for Canadian securities upon order entry as well as enhancements to dividend plan-related products.

With the dust on the pricing war having settled (at least for the moment), it’ll be interesting to see which areas brokerages pick to differentiate themselves on. For now it seems like platforms are a good bet as we’re aware of at least two other major online brokerages that have significant platform upgrades coming in the near future. Stay tuned.

US Discount Brokerages Catch a Bid

A couple of interesting announcements came from the US online brokerages E*trade, TD Ameritrade and Schwab this past week.

What stood out amongst the mixed news of July trading performance and earnings numbers from the US-based brokerages was the initiating of buy ratings on giants Schwab and TD Ameritrade by Deutsche Bank.

The comments by analyst Brian Bedell point to a thesis of strength based on the combination of diversified revenue streams and potential market volatility that may accompany interest rate hikes.

Reading between the lines, winning the brokerage game (at least in the near term) seems to be about offering more than just trade execution – something that non-bank owned brokerages may have to think through carefully here in Canada.

Exchanges Welcomed

When most DIY investors think of the stock market in Canada, they immediately think of the TSX and perhaps the TSX-Venture. Over the past 12 years, however, there has been another Canadian exchange – the Canadian Securities Exchange (CSE) – that has been steadily growing.

While awareness and coverage of the CSE has been muted, 2014 looks to be a breakout year. The CSE is experiencing its best year yet in terms of new listings and trading volume. And, where companies go, investors both big and small have followed.

The latest figures from July (as well as from June) are worth looking at as they point towards a marketplace that is gradually working towards a rally.

Many of the newest additions to the CSE are junior companies. When the recent activities at the CSE are juxtaposed with TSX-V performance, however, the picture of a junior market undergoing some kind of  longer term consolidation seems apparent. (For another even more interesting spin on what’s going on in the junior space, the latest Tickerscores piece on Junior Gold miners is worth a read)

2 year chart on S&P/TSX Venture Index

From the Forums

Registered Accounts on the Spot

Switching brokerages is not usually high on the list of fun experiences. An interesting post from the Canadian Money Forum this past week shed light on something that many investors may find even less fun: going from a ‘monocurrency’ RRSP brokerage account to a dual currency RRSP brokerage account. For the spreadsheet enthusiasts and performance sticklers, this is definitely worth a read for the thoughts on adjusted cost base tracking.

Keep it in the Family

In this post from the Reddit Personal Finance Canada thread, there was an interesting discussion that arose over whether money could be ‘given’ to the thread author’s parents to invest. Whenever money changes hands there are usually tax implications or considerations to be aware of that the community helped by sharing.

That does it for this week’s roundup. On a solemn note, this past week the world lost one of the most brilliant actors and comedians of our time. While he will be missed, Robin Williams’ greatest works and the exuberance with which he lived his life will always serve to inspire us. Here’s a link to the soundtrack to one of his greatest movies – Good Morning Vietnam.

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – August 8, 2014

After a flurry of activity across the discount brokerage space these past several weeks, this past week was a bit quieter. The same, however, can’t be said for the markets.  Despite the relative quiet on the discount brokerage side, a couple of items of interest to DIY investors crossed our radar.  In this roundup, we take a quick look at an interesting announcement from a US trading platform provider, a new deal being offered at a popular Canadian brokerage and as always some interesting perspectives from the Canadian investor forums.

Sterling Trader Looks North

For active and professional traders, choosing the right trading platform is an important part of being able to effectively trade fast moving opportunities. Unfortunately for many Canadian active investors, platform selection at Canadian online brokerages has been very limited.

It is against this backdrop of limited platform selection that this week’s announcement by US-based trading platform maker Sterling Trader is particularly interesting. Contained within that announcement were a number of noteworthy stats and nuggets, chief among them that Sterling Trader is looking to expand its presence internationally – beginning with Canada.

Currently Sterling Trader is offered by only two Canadian discount brokerages (and a number of prop trading firms): Jitneytrade and Virtual Brokers (under the name Power Trader Pro). With the focus on pushing into Canada, however, several other brokerages may show some interest in building their platform portfolio – especially for the active trader segment.

This probably is just the beginning of an interesting shift in this segment of the investor market within Canada so stay tuned as there will likely be more to come.

Flashing Cash

After a bit of a slow start to the August deals and promotions race, Questrade jumped in with an offer to replace their now expired iPad mini/cash-back offer. The latest deal to be added by Questrade is a cash-back offer of $250 cash for a deposit of at least $100,000 and a cash back offer of $100 for a $50,000 (or more) deposit. At the outset of the month only BMO InvestorLine was offering a deal targeted at investors who had at least $100,000 however they now have company once again from Questrade in this tier of deposit size.

From the Forums

With summer in full swing, it would normally be a quiet time in the forums. Throw in a sharp market decline early in the week and that’s enough to get the chatter going again though. This week we’ve got a few interesting conversations regarding DIY investing.

Staying On Top Of Markets

In this post from Red Flag Deals’ investing forum thread, one reader asked what apps for iOS might be good for keeping track of markets. While several online brokerages offer mobile trading functionality, the quote feed experience can be somewhat variable. Check out some of the interesting recommendations from other forum users.

Two Sides of Getting Your Coin

Among the most popular of debates among self-directed investors is that of the ETF vs the Mutual Fund. In this thread from Reddit’s Personal Finance Canada thread, a reader reaches out to the group to get a bit of clarification on what the difference is between the two and what that difference translates into when putting money into the market.

Party in the TFSA

In a break from Beyoncé puns, Miley Cyrus steps in to be the theme for this next post, also from Reddit’s Personal Finance Canada thread. In the thread, a reader is contemplating adding the ‘exciting’ US stories of Apple (AAPL) and Tesla (TSLA) into their TFSA. The list of interesting responses on how to trade US stocks within a TFSA is worth a look. (FYI for those interested, here’s the list of Canadian discount brokerages that offer US currency TFSAs).

That does it for this week’s roundup. It was a bumpy ride this week in the markets so here’s a little levity to celebrate making it through to the other side of it. Have a great weekend!

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – August 1, 2014

What a difference a day makes. Yesterday was July and the markets were floating near all-time highs today it’s August those gains are gone. While that might not seem newsworthy, when it comes to trading/investing it’s often the simple lessons rather than the ‘news’ that make the difference. Learning how to stomach volatility (ironically as this edition of the roundup is being written while descending through some stomach churning turbulence) is part of the growth and development for every investor. Unfortunately, knowing that doesn’t quite make the experience any less unpleasant.

In this edition of the roundup we cover quite a bit of ground. We’ll start with the new deal being offered by one Canada’s bank-owned brokerages, then head on to the ‘facelift’ that another bank-owned brokerage quietly rolled out, followed by a quick announcement from a popular ETF competition and round third on the discount brokerage news with a pair of interesting stories from yet another bank-owned brokerage. Of course we didn’t forget about the forums – we’ll close out our weekly roundup by looking at a selection of interesting topics related to DIY investing.

Juicy Stakes

A new month means another round of updates to toss onto the grill. This month, there are 13 deals being offered by Canadian online brokerages as of the beginning of August.

The newest deal is a cash back + commission rebate offer from BMO InvestorLine which definitely raises the stakes for other brokerages – especially at the $100,000 deposit level where BMO InvestorLine currently sits unchallenged. Click the following link to view August’s deals and promotions.

Screenshot of HSBC InvestDirect’s new website layout

HSBC InvestDirect Website Gets Some Summer Love

Although they don’t often make it into the roundup, this past week we spotted the new website front-end of HSBC InvestDirect. Their new website has a few touchups, most notably they’ve dropped the drop-down menus talking about the features of their accounts and replaced them with some short summaries. Also, they’ve added in a big section on why to choose HSBC InvestDirect at the top of the website. HSBC InvestDirect received some fairly negative feedback from the last Globe and Mail discount brokerage reviews. With this latest set of changes the site looks and feels easier to navigate however, that’s a fairly subjective metric and so it will be interesting to see if or how that impacts the feedback they get.

Gold & Girls

The Next Big Winner contest sponsored by National Bank Direct Brokerage and Horizons ETFs Management announced their winner this past week. Top prize of $7500 went to Lanette Lam (from Vancouver, British Columbia) thanks in large part to a long and leveraged play on gold using Horizons BetaPro S&P/TSX Global Gold Bull Plus ETF (“HGU”). Ms Lam’s cumulative performance over the six week competition worked out to be just shy of 18%. The next runner up (Nandanie Ojha of Mississauga, Ontario) managed to land an impressive 15.5% return which was good enough to snag the $2,500 prize. An interesting side note of this competition is the ‘gender’ spin. Of the 1024 participants, 17% were women and both the winner and runner up were also women. Also, of the 6 weekly prizes that were awarded, 4 of them went to women. While the combination of timing and picking the right spot have a lot to do with success in the markets, it’s encouraging to see women participating in and succeeding at what is typically viewed as a “man’s game”.

What’s Price Got to do With it?

Competition between Canadian online brokerages has been taken to a whole new level in 2014. With commission pricing having fallen across the board, especially among the bank-owned brokerages, the challenge facing these brokerages is how to remain profitable as a business while also remaining competitive.

This past week Scotia iTrade, which has been a curious hold-out in lowering their standard commission rates, rolled out a slightly more creative approach to improving access to lower commissions under the banner of loyalty pricing.

Individuals can now qualify for a discounted commission rate of $9.99 per trade if they have a combined amount of $50,000 or more across several Scotiabank accounts/products (including Scotia iTrade assets). Previously only Scotia iTrade clients who had at least $50,000 in assets with iTrade or who made at least 30 commission-generating trades per quarter were eligible for $9.99 commissions.

Click the following link to learn more about Scotia iTrade’s new loyalty pricing and how it changes the value proposition for considering iTrade.

Going for DRIP in the Pool

Another news story coming out of Scotia iTrade this week was their announcement of adding the ability to manage dividend reinvestment programs (DRIPs) and dividend purchase plans (DPP) directly online.

From the Forums

Continuing on the dividend theme, here are some interesting forum posts that tie into setting up DRIPs and explain the power of compounding.

Asking Pays Dividends

In the following post from the Canadian personal finance thread on Reddit, a curious investor wants to understand how compounding works in the context of investing. The answers from the community were helpful in demystifying the process.

Taking the Plunge

Getting started with investing on one’s own can be a tad nerve wracking. In another post from someone stepping into the world of DIY investing, a reader on Reddit’s Canadian personal finance thread is looking for the easiest way to dip their toes into the investing pool and asked to have it explained as it would be to a five year old.

That does it for this week’s roundup. It looks like the low volatility in the markets is going to take a back seat so prepare for the media storm. In the meantime, Canadian markets are closed for the long weekend so have safe and enjoyable few days off!

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – July 25, 2014

As we cruise into the end of July, every trader’s favourite season is drawing to a close. No, it’s not summer but rather earnings season. Depending on which side of an analyst’s estimate a company falls, the news may be great or simply a great disappointment. Regardless, the lesson the market forces everyone to learn over and over again is to keep your expectations realistic.

In this week’s roundup, we look at some of the interesting expectations that Canada’s online brokerages have created and are fanning the flames on. In particular, we take a brief look at 2 fierce competitors and their latest features to be released after which we quickly scan through this month’s expiring deals and round out with an #FTF (From the Forums).

Looking for a Hot Date?

Desjardins Online Brokerage’s new investor education calendar may have several to offer. After receiving a significant makeover, the investor education calendar from Desjardins Online Brokerage launched and is poised to create a bit of a stir across the online brokerage industry. Specifically, with the recent commission price drops across the industry seeming to cool-off, online brokerages will be looking to other components of their business to highlight or improve in a bid to differentiate themselves from one another.

For those discount brokerages that are heavily invested in providing education to online investors (such as National Bank Direct Brokerage, Scotia iTrade and TD Direct Investing) the news probably signals time for some ‘fresher’ thinking when it comes to user experience and investor education.

Read more about the new features of the Desjardins Online Brokerage education calendar here.

It’s All About the Benjamins

National Bank Direct Brokerage has officially joined the ranks of online brokerages that offer US dollar registered accounts. As you can see from a screenshot of their site below, the announcement marks the formal roll out of this account option for RRSP, RESP, TFSA as well as several other popular registered account types.

The ability to have USD registered accounts is a sought after feature with many investors that trade/invest in many US listed securities and who want to avoid some of the steep currency conversion fees imposed by brokerages.

As was reported in February, National Bank Direct Brokerage has been rolling out this feature in phases and with feature how hitting the front of their website, it won’t be long before we start to see more about it and perhaps a response from those brokerages who still don’t offer this account type to investors.

Should They Stay or Should They Go?

With the end of the month just around the corner, there are usually some deals or promotions timed to expire. The two that are currently set to go at the end of this month are the 50/50 offer from BMO InvestorLine and the iPad Mini offer from Questrade. Of the two, the iPad Mini offer has expired once before only to be resurrected. We’ll see which (if either) get a time extension but for the moment both of these deals are scheduled to be in their final days.

From the Forums

This past week across the investor forums saw the usual interesting assortment of questions regarding DIY investing. On the menu for this roundup, we look at where to park cash in a trading account, how Virtual Brokers clients

Cash is king, but where does his highness hangout when not being put to work?

In this post from RedFlagDeals, an investor is looking to squeeze some extra juice out of some cash sitting in their trading account. The community chimes in with some interesting suggestions to try and get that cash to work.

The pricing plan is right

In another thread from RedFlagDeals, the cost of buying and selling ETFs at Virtual Brokers got put under the microscope. Because of their different pricing plans, clients can pick which commission charge works best for a particular trade. Find out what strategies folks ended up suggesting when trading ETFs by clicking the link above.

Lather, rinse, repeat

The ever popular Gambit trade between dual listed stocks was the topic of this post on the Canadian Money Forum. Specifically, a user shared with the community their experience of a bit of sticker shock when trying to do a Gambit in a non-registered account with TD Waterhouse (TD Direct Investing). Fortunately the other forum members chimed in with some helpful tips on how to get it done right.

That does it for this week’s roundup. With the US and Canadian markets (and even Facebook) hitting new highs again, it seems there might be cause to celebrate going into the weekend. Strangely, it seems like Mr. Market and traders don’t exactly know what to expect from one another – kind of like the high five moment gone awry.

 

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – July 18, 2014

With the World Cup now officially over many folks can get back to their regular routines. Of course for many traders, staring at a screen all day only to have nothing happen is a regular routine. Don’t be fooled by the calm, as things can (and usually do) change quite quickly. Soccer or no, for Canada’s discount brokerages, the game is still ‘afoot’ and this past week they showed that they’re still out to try and win the attention of DIY investors.

In this week’s roundup we look at some important news from Canadian securities regulators, a pair of deals launched from two online brokerages and showcase some interesting perspectives from the Canadian investor forums.

Making a Statement

A sound financial system is built on trust and transparency. For retail investors, the importance of being able to know what they’re buying and what they’re paying for are crucial to maintaining confidence in the capital marketplace. This past week, a series of important new rules about how fees are disclosed to investors take effect. Check out this article from the Getting Smarter About Money blog that provides a great explanation of the latest and upcoming changes.

Looking Out for Investors

In another regulatory-themed post, (this one from the BCSC site InvestRight) is an important reminder that getting approached or contacted about “investment opportunities” isn’t always above board. This post highlights a number of companies and/or individuals that have raised red flags with regulators. Several of Canada’s major securities regulators regularly publish alerts and provide guidance on how to handle individuals/entities that may approach you for an investment in ‘the next big thing’.

Sunny with a Chance of a Deal

While most people are out enjoying the summer sun, a pair of Canadian online brokerages are attempting to make it rain.

Putting Rates on Ice

On the heels of their recently successful iPad mini campaign, National Bank Direct Brokerage has followed up with a margin account promotion (Canadian margin account specifically). The deal offers a discount on the margin borrowing rate for 3 months of 1%. Check out our online brokerage deals and promotions section for more information.

Save the Date

When it comes to offering deals and promotions, Questrade is certainly one of the most active. With so many deals on the go, it’s interesting to see things continue to get a bit more creative than the ‘cash back’ or the latest iPad mini. This past week we spotted a new offer from Questrade that offers clients one-commission-free-trade per month for up to two years. For many reasons this was an interesting deal, most notably because it competes with several other existing offers. Given the uniqueness of this offer, we put together a detailed look at Questrade’s latest deal here.

From the Forums

Clearing the Bench

Asking one of Canada’s busiest forum of deal hunters which online brokerage they use is a great way to create a bit of a scrum. In fine fashion this post on Red Flag Deals did just that and, in tacky click bait form, what happened next probably wouldn’t surprise you.

Leaving the Group

Savvy investors know that controlling costs can be as important as generating returns. In this post on Reddit, Investor’s Group got put in the cross-hairs of one investor who was rethinking the value of the fees they pay.

A Marginal Trade

The mechanics of trading and order settlement are things that most investors (especially beginners) overlook. An important consequence of that settlement process is when you need to have funds in your account and when (or if) any margin might be used to cover the payment for an order. This article from an investor on Red Flag Deals’ personal finance forum is a good example of why knowing what’s moving where and when is important to know.

That wraps up this edition of the roundup. Have a great weekend and plenty of fun trying to stay cool.

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – July 11, 2014

The word heading into the end of this week: Drama. This weekend it seems no matter where you look there is some source of incredible drama. An Argentinian team playing for the World Cup final in Brazil, LeBron ‘going home’ to Cleveland and rumours of Eva Mendes having Ryan Gossling’s baby – wait what?

Not to be outdone by rivalry, homecomings, and bundles of joy, Canadian discount brokerages had their fair share of news making to do. In this week’s roundup we take a look at a major commission price announcement that takes one online broker out of the shadows and back into the spotlight. Next we highlight the competition between brokerages as July deals and promotions start to show up in droves. We then take a quick look at the next trillion-dollar idea brokerages are trying to position themselves for. Of course no roundup would be complete without a healthy dose of investor commentary from the investor forums.

Don’t H8 The Player

Although they’ve been out of the spotlight for quite some time, Credential Direct stepped up their game by announcing a major commission drop and pricing structure overhaul.

Gone are the convoluted pricing tiers and the separation between ‘active’ and ‘non-active’ traders. In their place: one price, $8.88, is now applicable to all online equity trades. While it is a significant internal shift, the pricing move also is bound to generate quite a bit of buzz with other Canadian brokerages who have recently lowered their trading fees to $9.95/$9.99. Read more in a special feature post on the new Credential Direct offer here.

Save the Dates

There’s something about calendars that have got two Canadian online brokerages inspired.

In the first instance, Questrade has just rolled out a very unique set of offers in a bid to win new clients/assets. As part of their latest promotion (among several already ongoing ones), Questrade is offering new clients the option of receiving a free trade a month for 12 (for deposits of at least $12,000) or 24 months (for deposits of $20,000 or more).

The next calendar inspired promotion is from RBC Direct Investing as part of a lead up to its 25th anniversary. Specifically RBC Direct Investing is holding a weekly giveaway of $1,000 for 12 weeks (between July 24th and October 9th) for individuals that are a part of its “community”. Existing members of the RBC Direct Investing community are automatically registered. To become a member of the community one has to either be an RBC Direct Investing client or be an RBC Royal Bank Online Banking client and have a practice account. For more information including contest terms and conditions, click here.

Paying it Forward

While many people get excited about the prospect of new bundles of joy, the conversation about the other end of the circle of life is understandably less enthusiastic – unless you happen to be a financial adviser. The notion of inheritance and passing along wealth to subsequent generations has got lots of financial institutions trying to position themselves for nearly a trillion dollar’s worth of wealth to be passed on. This past week, BMO InvestorLine released the results of a study it had commissioned on inheritance and what that might mean for individuals and their investment decisions.

From the Forums

 Symbolic Gestures

Ticker symbols can seem like a language unto themselves. Part of the process of learning to invest on one’s own means having to get comfortable with learning the different ways in which ticker symbols get entered and the different exchanges that exist to look for stocks to trade. In this post from RedFlagDeals’ investing thread, one user shares their confusion with making sense of the symbols and the markets that they refer to.

More Potato Skin in the Game

In this interesting post from the Reddit Personal Finance Canada thread, a community member shares their journey of getting a Couch Potato inspired ETF portfolio set up within their RBC Direct Investing account. The other members chimed in to provide some great tips on the finer points of building a low maintenance portfolio.

That brings us to the end of the roundup. Regardless of what or who you’re cheering for this weekend, there will most certainly be lots to chat about around the water cooler next week. Have a fantastic weekend!

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – July 4, 2014

This past week has been filled with many reasons to look skyward. Canada Day, Independence Day, and new all-time highs on major market indices. Add to the mix that it is the beginning of a new month and that we’ve passed the halfway mark on 2014 and there are even more reasons to smile.

For Canadian discount brokerages, the new month typically brings a bit of a change to the promotions and deals, and this month is no different. We’ll take a look at these in this week’s roundup in addition to looking at trading figures and trends from a  major US online brokerage and some interesting conversations between investors in the online investing forums related to the trending markets.

Deals Cooling Down

As we mentioned in last week’s roundup, there were a number of deals and promotions poised to expire at the end of June. Although it is still early in the new month, we have seen deal action pull back slightly.

There were 4 offers that officially expired at the end of June and so July started with 15 deals. Within the first week, however, a deal from Questrade and National Bank Direct Brokerage have ended bringing the total down to 13 offers. As a quick update, it looks like the popular iPad Mini promotion from National Bank Direct Brokerage has concluded earlier than originally scheduled due to high demand. Click the following link for more details on this month’s online brokerage deals and promotions.

Traders Taking a Breather

With the recent spate of low market volatility and gradually rising prices, for better or worse the “excitement” in the markets has been muted. In their latest trading figures, Interactive Brokers’ reported a 4% m/m dip in the number of DARTs (Daily Average Revenue Trades) but increases in the number of customer accounts (17% yr/yr and 1% m/m) to 262,000.

A quick look at the recent 6 month trends in DARTs and average commission revenue shows that while the market (Dow Jones Industrial Average) has been trending upwards, traders may be sitting back, riding the trend and monitoring positions and ultimately sending fewer orders into the market.

Interactive Brokers Trading Data 1st Half 2014
Interactive Brokers Trading Data 1st Half 2014

From The Forums

The Trend has some Friends

With markets that have been trending (mostly) upwards for a few years now, the index investors have been content to allocate accordingly and mostly enjoy the ride up. It stands to reason that ETFs and in particular those that track indices have become very popular with most investors.

Keeping with the ‘trending market’ theme, the following post from the Reddit Personal Finance Canada thread tracks an interesting story of a DIY investor wanting to use the popular TD e-series mutual funds as part of their strategy. Click here to read the particularly vocal response from the community.

Starting Out

A familiar question for beginner investors is how to get started in the markets. In this post, again from Reddit, a self-described investment ‘newbie’ shares their financial picture and ideas for how to get started. Again, the popularity of ETFs and index investing with the other investors show up in the responses. Click here to read more.

That does it for this week’s roundup. Have a great weekend and we hope to see stock charts and soccer goals continue to aim for the upper right.

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – June 27, 2014

We kick off this week’s discount brokerage roundup with a little investing inspiration from the beautiful game. The inspiration is not that one can stare at a screen for hours only to see nothing change (hint hint to the traders out there) but rather that when things are fiercely competitive, don’t put it past opponents to try and take a bite out of one another’s business.

In this week’s roundup we take a quick tour through the deals set to expire as we head into July. Deals and promotions are where brokerages seem to be doing the most visible kinds of competing. Education will also be another area that is of interest to brokerages and we take a look at one major player taking an interest in providing investor education to a key market. Switching gears slightly, we take a look at competition of a different variety that has definitely caught the attention of many investors lately. Finally we cap the roundup off with an interesting brokerage comparison from the forums.

Deals Going on a Staycation

For many summer is a time to gear down. What is interesting to note about the Canadian online brokerages is who is still actively offering deals and promotions throughout a typically quiet period.

A quick look at our deals and promotions section for June shows an interesting ‘cluster’ of deal providers. Notably Questrade, Scotia iTrade, National Bank Direct Brokerage, BMO InvestorLine and Disnat (or under half of all brokerages) all have advertised deals and promotions.

Of the deals currently being offered, Questrade has 7, BMO InvestorLine 4 and Scotia iTrade has 3. Looking at the expiry dates on these offers, however, all of iTrades offers are set to expire whereas only one of Questrade’s (the Amazon gift card) is. Virtual Brokers’ commission-free trade offer is also set to expire at the end of June.

It will be interesting to see what Scotia iTrade decides to do for the rest of the summer. If history is any indicator, the Refer-a-Friend is likely to be extended. Whatever the case, it’s clear to see that those brokerages that either want to or have to grow their business are not taking it easy.

All the Saving Ladies

Thanks to Beyoncé yet again for a headline inspiration. Of course it is not entirely unrelated as this past week, the world famous artist may have had her own thoughts to share on her financial future at an interesting event sponsored by TD. Specifically there was an interesting session called #YourStoryYourFuture which focused on empowerment and encouraging industry to focus on financial planning for women.

Over the past year we have noted that TD Direct Investing has offered a number of “women focused” investing education sessions and so this recent event (which is reviewed here) appears to be part of a broader strategy to connect with women investors.

All the Leaves are Green

From one big green story to another. The marijuana-themed Green Rush conference took place in Toronto this past week. Conferences such as the Green Rush are fairly unique because the sector of (legal) marijuana-related investing is so new but it also is a great example of how quickly speculative capital can mobilize itself. In both Canada and the US, investment in marijuana producing companies (or those hoping to get into the business) has been one of the hottest news stories this year. Of course with a lot of the hype comes the rampant speculation.  Check out this interesting video recap on the conference from BNN and also this link on our Facebook page from Bloomberg which provides some food for thought when considering investing in the ‘Green Rush’.

From the Forums

This past week was a bit quieter around the forums. An interesting comparison question did come up in the Reddit PersonalFinanceCanada thread through and it looked at comparing two bank owned Canadian discount brokerages: TD Direct Investing and CIBC Investor’s Edge. Click here to read the interesting commentary provided by Redditors on the pros and cons of both options.

That’s a wrap for this week’s roundup. To all of our readers have a safe and enjoyable extra-long weekend. There’s plenty of screen action on the sports end but for those who are looking to get away from it all and enjoy some time on the water, here’s a little cute animal inspiration of how to do it in style.

Posted on by — Leave a comment

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!

 

 

Posted on by — Leave a comment

Discount Brokerage Weekly Roundup – June 13, 2014

The Stanley Cup, the NBA Finals and the kickoff of the World Cup – between any or all of these major events it’s hard not to think about all of the fierce competition going on. Of course competition can bring out the best and sometimes the worst in the athletes. Online brokerages also know a thing or two about the heat of competition – sometimes driving innovation for the better and other times pushing things into a bit of a grey zone in the benefits department.

In this week’s roundup the Canadian online brokerage space saw a major feature release from one player. Across the border, however, this past week provided a glimpse into the darker side of innovation in the investment industry – something that is also being debated (albeit more politely) here in Canada. Of course this week wouldn’t be complete without a venture into the ongoing debate between investors from the forums.

If You Like It, Then Put a Bracket On It

Earlier this week, Questrade announced a big feature release as part of its latest set of trading platform feature upgrades. New with this release: bracket orders. For loyal readers of the roundup, we had announced the mention of this feature last month, however the official launch came this week, complete with a news release and video tour.

Active traders in particular will take note of these order types as placing conditions on an order enables (in theory) more efficient order entry planning. That said, Questrade isn’t the only brokerage that offers these features – both TD Direct Investing (on certain platforms) and Interactive Brokers also offer these. We have also caught wind of several other brokerages also actively working to implement these order types for their clients however like this competition inspired version of the roundup has shown us, clients may not want to go without for too long – especially the active trader types.

Ghost in the Machine

The US discount brokerages look like they’ve had a rough week and next week may be a little rougher. One of the bigger stories unfolding is the increasing scrutiny being placed on the brokerages for payment for order flow.

This past week, one of the largest US discount brokerages, TD Ameritrade, decided to start disclosing exactly how much of its revenue it derives from selling order flow – and the amount was a staggering $236 million from fiscal year 2013. Just who paid that amount? Mostly large high frequency trading firms/units that were able to capture incremental gains from many of those orders. TD Ameritrade wasn’t the only one to start disclosing this information though, E*trade and Schwab also revealed some of their figures related to payment for order flow.

At the heart of the discontent is not so much that brokerages made the money, but that fairness and transparency may have been compromised. Like the competitions referenced in this week’s roundup, sometimes the drive to compete crosses into a gray zone – which is where the order flow issues reside. In Canada, there is an analogous debate going on with regards to fairness for order flow – specifically known as the “order protection rule” or OPR.

Before the summer months are over, there is likely to be much more debate on both sides of the border. For retail investors, however the decisions may end up impacting how brokerages earn some of their revenues, which may in turn, impact retail trading costs.

Taking a Breather

Another interesting data point out of the US trading market also comes courtesy of TD Ameritrade – specifically in their trading volumes. Earlier this month Interactive Brokers reported their trading figures were lower for May and it looks like TD Ameritrade also pulled back about 15% month over month and about 8% year over year. While trading volumes are still strong on a relative basis, it is still interesting to wonder whether ‘complacency’ is setting in (and showing that sometimes too much of a good thing is not a good thing).

From the Forums

Penny Pinching

In this forum post from RedFlagDeals.com, the debate on ultra-low trading costs pits two perennial competitors – Virtual Brokers and Questrade – against one another. Hear how the community provides their two-cents to the question of penny trading and whether it makes sense.

Keep Tabs

Staying within the RedFlagDeals forum, another interesting thread illustrating why it’s important to read through and understand the terms of opening an online brokerage account. Although it was started quite some time ago, it’s a great illustration of folks running into some of the same situations and how the community helped provide a little clarity. Ironically, brackets (of the literal kind) also make an appearance in this post too.

That does it for this week’s roundup. Whether you’re glued to the TV screen or you’re putting on sun screen, have a fantastic weekend and remember to say thanks to dad! (For those stuck for an idea, here are some awesome bbq’s to get you inspired.)