Category: Discount Brokerage News

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Discount Brokerage Weekly Roundup – June 6, 2014

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

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

Digging for Better Times

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

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

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

New month, new deals

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

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

Staying Top of Mind

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

Trading Metrics

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

From the Forums

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

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

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

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Discount Brokerage Weekly Roundup – May 30 2014

Another week, another record high. It looks like not that many folks chose to sell in May and go away after all. In spite of most NHL hockey players and seasonal investors starting to take it easy, Canadian discount brokerages were still keeping busy keeping one another on their toes.

In this week’s roundup we look at a couple of online brokerage deals that are hoping to get the attention of self-directed investors with some popular toys. Also, another Canadian online brokerage announced a feature enhancement that will help show investors the money (or lack thereof). As a quick pulse of where the Canadian online brokerage industry may be headed, we take a quick peek at a merger of two US discount brokerages. And finally, what would a weekly roundup be without some interesting thoughts from the Canadian investment forums?

An Apple a Day

Despite ponying up around $3 billion for a headphone (and streaming music) company, Apple still remains popular with consumers – which is something banks and now discount brokerages are capitalizing on.

Although Questrade was one of the first discount brokerages to offer up an iPad minis as an incentive to open an online trading account (and did so for a long time), it now seems that National Bank Direct Brokerage has also taken to a similar strategy.

Earlier this week, National Bank Direct Brokerage rolled out a new promotion offering iPad Minis for new clients who deposit at least $20,000. Interestingly, Questrade’s iPad Mini offer which had been taken down, looks to also have resurfaced. Questrade’s iPad mini offer requires a deposit of at least $100,000 and gives qualifying clients the choice of taking the iPad mini or $250 cash. Another curious point is that the value of the iPad Mini for the National Bank Direct Brokerage offer is listed as $319 whereas with Questrade it is being valued at $250.

Keeping it Realized

As commission pricing between major bank-owned online brokerages has come down, service, platform and features are the new battlegrounds to woo clients. Following their recent announcement about additional news data, earlier this week Scotia iTrade took another step towards improving customer experience by announcing the roll out of a realized gain & loss reporting feature. The new feature apparently allows clients to view their actual trading gains and losses as far back as January 2014.

Two Heads Are Better Than One

For many years, observers of the Canadian discount brokerage marketplace have observed the increasing competition for a very limited number of investors. While the fragmentation of the Canadian marketplace hasn’t really driven too much consolidation, the recent notable examples (e.g. optionsXpress Canada being acquired by Virtual Brokers) are far and few between.

In the US, however, the marketplace is also hypercompetitive and earlier this week, two Chicago-based online brokerages OptionsHouse LLC and tradeMONSTER Group Inc announced they would be joining forces. This merger comes just over 2 years after the merger of another pair of Chicago-based US brokerages – TradeKing and Zecco. While two points a trend does not make, it is nonetheless interesting to see smaller players combine to take on the incumbent brokerage houses. Whether it’s two smaller brokerages teaming up or a case of a bigger fish acquiring a smaller one, the signs from the US discount brokerages may be sending a signal of things to come here in Canada.

From the Forums

What are Friends For?

Several Canadian discount brokerages have referral programs set up where existing clients can receive a bonus (usually cash or free trades) for having someone they refer open an account. In this post from Red Flag Deals, the community chimes in on the BMO InvestorLine refer-a-friend offer which provides up to $300 for a referral.

Some Change Won’t Do You Good

Forced currency conversions are a thorn in the side of many self-directed investors, especially given where the Loonie has been for the past few months. With that in mind, when online brokerages do conduct a foreign currency conversion, there is just that much less of a portfolio left. In this post from Canadian Money Forum, users discuss RBC Direct Investing’s foreign exchange practices with a Tax Free Savings Account (TFSA).

That takes to the end of the week and the roundup. As a quick reminder, the Cambridge House Canadian Investor Conference is coming up this weekend for those in and around the Vancouver region. Registration is free ahead of the conference. For those suffering from a bit of hockey withdrawal take heart, the best disinfectant is sunshine – so hopefully you’ll have a chance to get out and enjoy some.

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Discount Brokerage Weekly Roundup – May 23, 2014

Even though there was a shortened work week after the Victoria Day holiday, neither the Canadian discount brokerages nor those in the SparxTrading camp wasted any time bouncing back into the action.

In this week’s roundup, we’ll reveal the big news about an exciting feature we’ve been working on. We weren’t the only ones with big news though, as pair of major online brokerages took to using the major news media as a selling tool in two different ways. Next on the menu was a new promotion by another popular online brokerage – this one aimed at younger online investors. Also, a usually quiet discount brokerage signed up with an interesting platform partner. Finally, we round out the roundup with some interesting opinions from the investor forums.

Beta be Good News

Earlier this week the long awaited update to the Canadian discount brokerage profiles rolled off the assembly line. We began the redesign by listening and researching how it is that Canadian self-directed investors were hunting for information on discount brokerages. The fruits of that research told us that Canadians were looking for a platform to learn about, share experiences on and connect to discount brokerages.

The beta versions of these pages, which are now open to the viewing public, are built around these ideas with features that make the task of researching a discount brokerage much simpler. We’ll save the deep-dive on all the new bells and whistles for a dedicated blog post, but for now, we encourage readers to take the new profiles for a spin. If there are any issues or suggested improvements, we’d love to hear them.

2014 will continue to bring some added improvements to the site in terms of function and form, so we look forward to an exciting next few months.

Desjardins Online Brokerage in the Spotlight

Earlier in the week, Desjardins Online Brokerage (aka Disnat) sponsored a special piece in the Financial Post. It was an interesting overview of the online brokerage, most notably because it was done in a Q&A style that had a particular focus on new or beginner investors.

Good Times

Scotia iTrade also announced earlier this week that they will be adding to their investor information stream by enabling iTrade clients to access content from the Financial Times. Scotia iTrade clients can now access to this information feature under the ‘investing ideas’ section. Two notable authors from the Financial Times that have syndicated content available are Gillian Tett and John Authers.

You Must Be At Least This Young

BMO InvestorLine launched a very interesting promotion at the tail end of last week that didn’t make it into last week’s roundup. Not to worry (unless you are another discount brokerage) though, as we put together a detailed look at their latest offer. For those of the TL;DR generation, the new promotion is aimed at online investors between the ages of 18 to 35, and is offering 35 free trades (good for up to 90 days) as well as waiving of the minimum $5,000 deposit. In addition, making at least 2 trades within 6 months waives the minimum balance fees for non-registered and registered accounts.

A Wize Move?

Canadian discount brokerage Jitneytrade announced this week that they are the preferred Canadian brokerage partner for a software platform known as WizeTrade. According to the release, Jitneytrade clients are now able to integrate the WizeTrade interface with Jitneytrade’s Desktop Pro platform to allow direct trading from the WizeTrade platform. Wizetrade is a charting/scanning platform that enables users to scan/trade currencies, equities, options and commodities.

From the Forums

Ungraceful Exit

One of the interesting scenarios that comes up is when it comes time to switch brokerages. Most brokerages impose a penalty for leaving, with some even putting an additional charge if users leave within a year of signing up. On the flip side, most brokerages getting a client have offers to pay transfer fees. Unfortunately, for investors such as the one in this Reddit post, the threshold to have those fees reimbursed was higher than the amount getting transferred. Nonetheless, check out what other readers had to offer in terms of advice.

One DRIP at a time

The dividend reinvestment plan (DRIP) is a popular strategy for building wealth by using dividend payments. How smoothly this process goes depends somewhat on whether an investor chooses to use this strategy inside or outside of a registered account. While possible outside of a registered account, there is a bit more work that’s required to ensure the transactions are properly accounted for. The following post from Canadian Money Forum highlights one user’s experience with setting up a DRIP in a non-registered account.

That’s a wrap for this shortened week. As a reminder, US Markets will be closed on Monday for the Memorial Day long weekend. It’s likely that Canadian markets will also trade more lightly because of the US market closures so whether it be on the weekend or in the trading lull on Monday, enjoy the following video pitching a novel approach to using solar power (cue the solar bull drool).

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Discount Brokerage Weekly Roundup – May 16, 2014

Keep Calm and Carey OnThe bears just can’t seem to catch a break this week. Even the Boston Bruins now know what it feels like to be on the wrong side of a hot Price. As a jumping off point to this week’s roundup, the intensity that comes with fierce rivalry is a reminder that discount brokerages & investors had better be prepared to play to win. Champions, challengers, currencies and commitment – this week we’ve got’em all.

In this week’s roundup, we take a look at a very interesting interview with one of the largest discount brokerages in North America. Next, we highlight how one of Canada’s independent brokerages looks like they’re trying something different within the deals & promotions arena. Following that, we pass along some important cautionary advice from a major Canadian securities regulator about virtual currencies. Finally, we end this pre-long weekend edition of the roundup with some interesting reading suggestions from the forums.

Online Trading According to Interactive Brokers

It’s one thing to compete as an investor, but it’s an entirely different thing to be able to be profitable at it.

This past week a very compelling interview of the CEO and founder of Interactive Brokers, Thomas Peterffy, was published by the Motley Fool. In that interview there were a number of interesting comments made by Peterffy regarding what it takes to compete in the discount brokerage industry and the commitment Interactive Brokers has taken to controlling costs through automation.

Among the many revealing statements was one regarding their business the core metrics they monitor: the number of new accounts, the amount of new assets and the margin loans. The fact that Interactive Brokers is geared towards “sophisticated” investors means that when they connect with their target client (or vice versa), trading activity is almost a given. Also revealing was the statement that Interactive Brokers doesn’t appear interested in growing their business by competing outside of their comfort zone (for now) – something bigger bank-owned brokerages may be content to know.

Welcome to the Jungle

Eat or be eaten is the law of the jungle. In the discount brokerage deals & promotions space, Questrade stands out amongst other brokerages because of the frequency with which it provides incentives for opening a trading account. This week was no exception as Questrade announced a promotion in which individuals who open an account (with a $5,000 deposit) and make at least one commissionable trade will receive a $50 Amazon gift card.

While other brokerages have, in recent memory, been willing to try something different (such as AirMiles), pairing a gift card from Amazon is an interesting move. The $50 mark is something that BMO InvestorLine is also pushing as part of their most recent promotional campaign (along with 50 free trades).

After a bit of quick math, because a commissionable trade (of between $4.95 – $9.95) is required to get the gift card, individuals are actually getting ~$40-45 for a deposit of $5,000.

Virtually Volatile

Although it hasn’t been making as many headlines as it was earlier in the year, Bitcoins have been getting a lot of interest from regulatory agencies all across the globe. As a cautionary tale to investors and those considering using Bitcoins, the British Columbia Securities Commission (BCSC) InvestRight posted this article on their blog regarding the popular digital currency.

From the Forums

The journey from novice to expert is something that every investor undertakes. Knowing where or how to begin is an ongoing challenge and so this week we chose to show both ends of the spectrum. From the humble beginnings to the world experts.

Old School Video

There’s nothing quite like kicking it back to the ‘old school’ way of investing to realize that much of what was true then is true now. It’s also quite a trip to see old film reel streamed from the web. Check out the video posted on our Facebook page.

Learning How to Invest

The personal finance section of Reddit once again provided some interesting conversation threads for self-directed investors. In this thread, a beginner investor in university looking to get started with investing reaches out to the reddit community to see how they went about learning how to invest.

Getting Schooled

The investing world has no shortage of personalities and opinions. One of the most interesting voices in the mix is Kyle Bass, who is rarely at a loss for words or a bearish outlook on Japan. This video comes courtesy of a post on Canadian Money Forum and certainly kicked up a storm of debate given that Canada has now gotten in his cross-hairs. Be warned though, there is quite a lot of material to follow along on.

That’s a wrap for this week’s roundup. Remember that Canadian markets will be closed on Monday for the Victoria Day long weekend but the US markets will still be alive and kicking. Have a safe & enjoyable weekend!

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Discount Brokerage Weekly Roundup – May 9, 2014

If there’s one fear that doesn’t seem to be present in the market, it appears to be a fear of heights. Once again markets are touching new highs and venturing into uncharted territory – but they weren’t the only ones.

In this edition of the roundup, we cover quite a bit of ground starting with a pair of “growth-oriented” investor conferences that took place in Vancouver. Next we check out a couple of recently launched discount brokerage promotions and contests. Following that we report on an interesting level of hiring activity by different brokerages. Finally we end with a selection of thoughts from other Canadian investors via the investor forums & message boards.

Growing Opportunities

This past week Vancouver played host to two interesting growth-themed conferences.

The first was the new medical-marijuana focused Green Rush conference. According to reports, it was surprisingly well attended for a new conference and it drew in those curious about the potential ‘pot-of-gold’ at the end of the medical marijuana rainbow. Whether or not investors will see the green in their portfolios at this point is still too early to tell, but the speculators were out sniffing around.

Another growth themed conference took place a short distance away – this one with a focus on small cap companies. The spring edition of the Vancouver Small Cap conference showcased several guest speakers along with small cap company presentations. As with conferences past, there were a number of interesting tips and perspectives on a segment of the market that is typically classified as ‘high risk’. Read our full review of the Vancouver Small Cap Conference for more information.

ETF Contest on the Horizon

Horizon’s Exchange Traded Funds (ETFs) in partnership with National Bank Direct Brokerage are once again running their Biggest Winner contest. The contest runs from market open on May 20th to market close on June 27, 2014.

This year the prizes consist of $500 cash weekly for the 6 week duration of the contest, a grand prize of $7500 at the end of the competition and a runner up prize of $2500. The grand prize will be awarded to the portfolio that has the highest account value at the end of the competition. The weekly prizes will be awarded to the individual with the highest percentage gain. For full details on the contest or to register, click here.

Cash is King

According to the following forum post via the Financial Wisdom Forum, BMO InvestorLine has another cash back promotion running (not advertised on the front-end of their website) geared towards investors depositing either $250,000-$499,999 or $500,000+. The promotion offers either $700 or $1500 cash back depending on the deposit size. Full details on the promotion are available here.

BMO InvestorLine was also busy this week announcing updates to its adviceDirect service. Specifically a number of additional updates were released that focus around personalized ETF buy and sell recommendations and an improved ability to personalize recommendations with sorting functions.

New Features Coming to Questrade

Another interesting nugget from the investor forums came from a Questrade representative posting on the RedFlagDeals forum. Specifically, the rep let readers know that bracket orders would soon be launched by Questrade as part of the new release of the IQ platform. Traders on advanced platforms such as TD Direct Investing’s ThinkOrSwim (aka the US Trading Platform) and Active Trader platforms, or Interactive Brokers’ TWS have been able to take advantage of bracket orders (aka conditional orders or One Cancels the Other orders).

Questrade bracket orders

With Questrade now providing the feature it will be an interesting selling point for their platform. There are other online brokerages (who unfortunately cannot be named at this point) who are also currently working on the implementation of bracket orders.

Hiring Spree

Two points a trend does not make. That said, there seems to have been a slightly greater than usual spike in the number of job postings coming from Canadian discount brokerages.

In a recent roundup we covered the launch of Questrade’s new careers twitter handle and in these past two weeks there have been a number of postings for sales reps and client reps.

While it is difficult to pin down exactly what is prompting the timing, hiring more staff to either service or “onboard”new clients is a sign that several brokerages are not sitting back when it comes to looking for new business.

Among the brokerages with recent hiring posts:

 From the Forums

Activity across the forums looks like it pulled back a bit – perhaps on account of the nicer weather pulling folks away from the screens and into the better weather. This week’s selection comes from the RedFlagDeals forum as well as from the Canadian personal finance section of Reddit.

Questrade vs Virtual Brokers – encore

Comparing the two low cost online brokerages is a popular source of discussion – here is yet another interesting thread comparing them both.

Keeping it Casual

As we pointed out last roundup, seeking out advice from Reddit can be a hit or miss proposition. Nonetheless a thread that crossed our radar (which can be found here) was from a user looking to find the best brokerage for a “casual investor”. The responses of users were interesting and it was also noteworthy to see that even on Reddit, folks are prone to having multiple brokerage accounts.

That does it for this week’s roundup. We wish all the moms of the bulls and bears out there a wonderful Mother’s Day. For those brave enough to be looking for a Mother’s Day themed investment or three, this interesting segment from CNBC might provide a few ideas other than flowers:

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Discount Brokerage Weekly Roundup – May 2, 2014

Dramatic playoff hockey, incredible playoff basketball, markets hitting new highs (again) and the new Star Wars cast announced. It looks like May is bringing more drama than it is flowers. As we round the corner into May, the drama among discount brokerages continues to unfold, albeit with less flare than the heart pounding finishes from both the Habs & Raptors.

In this week’s roundup we launch into May with a new set of deals and information on investor education events; we report in on the always interesting trading metrics and activity of investors stateside; we take a quick peek at another ranking of Canadian brokerages and we close off the week with some discount brokerage encounters for the far edge of the internet.

Let’s May-ke a Deal

Here in the SparxTrading camp, the beginning of the month signals a time for a new overview of discount brokerage deals and promotions. This month the deal landscape looked much the same as it did in April. With one new deal announced as we come into May, it appears that discount brokerages are digging in until June with their core offers. The only new deal to announce was from BMO InvestorLine. Click the following link to learn more about the discount brokerage deals for May 2014. And, if history is any indicator, there ‘may’ still be some deals coming down the wire.

Learning About Earning

On the educational front, it appears Canadian discount brokerages are upping the ante for their focus on providing education and support to clients looking to learn more about investing.

This past week TD Direct Investing held a 45 minute webinar covering its web-broker platform that reportedly had over 10,000 registrations (they didn’t mention how many actually logged in) – an enormous number for any kind of education focused event online or offline. TD Direct Investing has recently added webinars to their mix of educational offerings, scheduling the online events on the last Wednesday of every 2nd month (the next one will be June 25th 2014).

In addition to the brokerage-sponsored education events, investors will probably want to take note of the Small Cap Conference coming up in Vancouver next week and also the CambridgeHouse International Investor Conference in early June – both of which will offer some opportunities to learn more about investing. Check out our investor education events calendar for more details on what’s being offered where & when.

The More the Scarier

This past week, Interactive Brokers released their trading metrics for the month of April and depending on the frame of reference there is either reason for applause or reason to pause.

When compared to the same point last year, Interactive Brokers trading volumes look stunning – 20% higher Daily Average Revenue Trades (DARTs), margin loans 34% higher than last year and the number of customer accounts 16% higher. On a monthly basis, however, the gains are more modest for margin loans and customer accounts (2% improvement), and there was a 1% dip in DARTs. Additional coverage in this article from CNN also reconfirms the signals from other brokerages that retail investors are stepping back into the market.

Veterans of the market understand that having more investors in the market means a good run for a while but also the likelihood of getting close to a top. Interestingly the impact that the returning retail investor may have on the deals and promotions is that brokerages may not have to aggressively price promotions – choosing instead to focus on other features to attract and retain new customers.

Picking the Top Discount Brokerages for 2014

As part of their June issue, MoneySense teamed up with financial analysis firm Surviscor to provide their annual “Best Canadian Discount Brokerage” checkup. Author Dan Bortolotti walks through the Surviscor results while providing insights across different metrics like ease of use, banking integration, customer service, fees & commissions, reporting & record keeping and market intelligence.

Interestingly, the paradox of the ‘best discount brokerage’ shows up here in two ways.  First, there are so many ‘bests’ across different categories that it’s difficult to proclaim unequivocally that one brokerage is ultimately the best. What is ‘best’ for one investor may not be for another. Second, the data used to assess brokerages relies on history to infer quality about the present and/or future.  While that’s usually what anyone has to go on, it has been our observation when looking back at the historical analyses of the best discount brokerage rankings from years past (whether quarterly or semi-annually) who get’s crowned ‘the best’ changes quite often. In other words, pricing, features and service quality are constantly changing so titles such as ‘the best discount brokerage’ have a short shelf life in such a competitive space. Nonetheless, Bortolotti and Surviscor offered their ‘top picks’ overall as BMO InvestorLine and Scotia iTrade, with honorable mentions going to RBC Direct Investing and Qtrade Investor.

From the Forums

This week we thought we’d do something a bit different and venture out to the far reaches of the internet onto Reddit to find out what folks were saying about Canadian discount brokerages.

In this post from the Canadian personal finance section, readers chime in on BMO InvestorLine and how it stacks up to some of its competitors. As fair warning though, Reddit can be quit the wild arena for discussion and oddities so take the comments with a grain of salt.

That does it for this week’s roundup.  With a full dance card of thrilling events this weekend, good luck to the Habs & Raptors – May the Fourth be With You.

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Discount Brokerage Weekly Roundup – April 25, 2014

When taking a position in a trend, timing is everything – just don’t tell the folks sporting a playoff beard about ‘peak beard’ though. As we wind through earnings season, it looks like more than a few traders may be trimming positions as well as beards as markets round out the week slightly in the red.

Unlike markets, this past week showed that several discount brokerages appear to be very much in the green as retail investors appear to continue the march back into the stock markets. This week also showed how a pair of Canadian online brokerages aren’t afraid to tackle the idea of commitment. The first of the pair took a look at a financial plunge many Canadians take with weddings. The second discount brokerage looked at a big commitment of another kind as they launched their new career oriented social media channel. Finally, we round out with a pair of interesting forum posts and some very bad investing advice from a new Nike commercial.

Guess Who’s Back?

From time to time we look to the activity of US investors to serve as a proxy for what might be happening with Canadian investors also. The most recent earnings figures from several of the major publicly traded US discount brokerages that came out this past week painted a relatively positive picture with strong results being posted across the board at TD Ameritrade, Schwab and E*TRADE.

Having Your Cake and Paying For it Too

A recent study sponsored by BMO InvestorLine also caught our eye this past week as it took a look at the financial plunge associated with taking the big plunge. In their news release, BMO InvestorLine reported that, on average, Canadians fork over $15,000 for a wedding, with those between the age of 18 and 44 reporting an average spend of $18,150. Fascinating as the study was, we’re not sure if many Canadians are as committed to their discount brokerages as they are to their spouses.

#WorkHardForTheMoney

In an interesting move Questrade took its talent scouting social this past week by launching their own career-focused Twitter handle @QuestradeCareer. While there may be some relation to the health of brokerages in the US, the decision to be hiring is a signal that brokerages may be doing ‘ok’ on this side of the border. Over the past several months, there have been a number of positions advertised at several discount brokerages to attract and retain talent, which is evidence of yet another area in which Canadian discount brokerages may be competing with one another.

From the Forums

In addition to being a somewhat quiet week around the discount brokerage space, the investor forums also showed a bit of a dip in terms of chatter about brokerages and markets. Nonetheless, the following two discussions were shareworthy.

ETFs vs Stocks

In this post from the Financial Wisdom Forum, an interesting discussion about the pros and cons of individual stock ownership vs. using ETFs. This thread was particularly noteworthy because it highlighted that there’s a case to be made for each and which of the two is “ideal” really depends on an individual’s situation and goals.

A Penny Stock Saved

This thread from RedFlagDeals’ forum started out as a story that one user shared about their experience trading penny stocks with TD Direct Investing. What ensued from that, however, was an interesting discussion between community members on trading in penny stocks (for better or worse) at several different Canadian online brokerages.

That’s a wrap for this quick version of the roundup. Of course as we point out from time to time, sports and competition can be a great learning space for investing do’s and don’ts. Every now and then, however, there’s a big neon sign that flashes ‘don’t do it’. One of those messages comes courtesy of a really entertaining Nike soccer ad that encourages individuals to #riskeverything – to which we have to #HumblyDisagree. Hope you’re weekend is a ball!

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Discount Brokerage Weekly Roundup – April 18, 2014

With the shortened trading week this week, it looks like markets got a chance to end the week on a high note. Now that spring is in full bloom (sorry Albertans) there will most certainly be tulips – which serve as an appropriate reminder about how crazy bubbles can form and burst.

As much as price is driven by supply and demand, the forces of competition are interesting to watch unfold in the discount brokerage market where, yet again, a commission drop was announced by a major bank-owned brokerage except this time with a twist. In addition to competition in price, there also appears to be movement in the investor education space – something that may be the next battleground amongst Canadian discount brokerages. Of course, with the competition comes complexity. Thankfully, an exciting announcement from here at SparxTrading will hopefully make things easier for DIY investors to do their research as the competition amongst brokerages continues to heat up.

Scotia iTrade Commission Pricing Drop

This past week Scotia iTrade jumped into the price drop ring but with a twist. Instead of keeping pace with the other bank-owned brokerages at the standard commission pricing level, Scotia iTrade announced that they’re going to go after the highly active (and highly valuable) trader segment and lower their best commission level from $6.99 down to $4.99 flat for clients that make 150 or more trades per quarter.

While in dollar terms, the offer may not seem like a lot, for highly active traders, the savings are substantial enough to probably get their attention. The savings for traders that make 150 or more trades per quarter translate into at least $1200 per year.

One of the reasons why this deal ups the ante with both bank-owned brokerages and independent brokerages is because traders at that level of activity also qualify for free access to premium level of Scotia iTrade’s FlightDesk platform. This platform is a fairly robust trading tool so other brokerages that cater to the highly active segment will have their work cut out for them to match the total value of the offering.

The ‘cherry-on-the-sundae’ however is that Scotia iTrade is also pairing the new pricing drop with a deal. They’re offering up either cash back or free trades for new and existing clients that range from $50 to $500 or 100 free trades to 500 free trades depending on the deposit size. To learn more about the deal, check out our discount brokerage deals section.

Be on the look-out for an in-depth look a couple of follow up pieces we’re putting together on the commission price drop and the active trader segment.


We All Need Some Education

In a regular scan of the Canadian discount brokerage landscape, we picked up something interesting on a pair of different webpages.

On Credential Direct’s home page we spotted a large banner pointing to educational resources being offered to clients. While it just speculative at this point, it appears that after the session with Dan Bortolotti, Credential Direct may be moving to offer more education as part of its service offering.

CIBC Investor’s Edge has also picked up in activity by offering a couple of webinars this year, with the most recent one being a webinar on using some of Morningstar’s research features.

Although these moves are modest by comparison, investor education is definitely on the minds on several brokerages and even recent articles seem to suggest that self-directed investors can expect more of it to come.

Better Discount Brokerage Reviews Coming

For many self-directed investors, choosing or comparing online brokerages is no easy feat. In fact, this past week there two articles (this one on Morningstar by Gail Bebe, and this one on Globe Investor (paid) by Rob Carrick) that were published to try and add some clarity to the process. Thankfully, however, the process of researching and choosing an online trading account is about to get a little easier.

As announced in our post earlier this week, we’re getting set to roll out our new, redesigned brokerage profiles. The new profiles will make the research process much more efficient by including information that may self-directed investors are interested in learning about. We’re rolling out a beta version to a small group of industry participants before rolling it out in beta format at the end of this month. Check out the following post for more details.

From the Forums

Biting the Hand that (Data) Feeds You

The conversation on HFTs is still alive and well. In the following post on Canadian Money Forum, there was an interesting question posted on whether community members tended towards market orders or limit orders.

When the Dust Settles

Getting an order filled in stages can be stressful (and sometimes expensive) scenario that traders find themselves in. In the following post from the RedFlagDeals forum, there was an interesting thread that highlights the importance of understanding how particular brokerages treat partial fills for orders and why knowing your order types matters.

That does it for this week’s roundup. Hopefully everyone will have a chance to stop and smell the flowers this weekend – which is a great reminder going into Earth Day next week to take care of the green outside of your portfolios as well as inside.

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Discount Brokerage Weekly Roundup – April 11th 2014

Between a few days of markets selling off and glitch named ‘heartbleed’ that is turning the internet upside down, it has been a tough week for anyone sitting behind a screen. For those with a view of the outdoors, however, it has probably been even tougher as the nice weather has finally started to show up in Montreal and Toronto (save the bragging Vancouver). The online brokerages may have to wait to get outside, however, as many of them were very busy this past week dropping prices, introducing products and navigating the ‘busy season’ for investors.

In this week’s roundup we look at an interesting trend highlighted by one of Canada’s largest discount brokerages. Next we look at another cost reducing product for investors, this time in the mutual fund space. A pair of updates to the deals section takes us to the halfway point. For TFSA holders, we found a great video offering tips for those trading US stocks with dividends. Finally we round out with some interesting tweets that we spotted as well as some informative forum threads.

Thoughtful Thirties

There’s something about turning 30 that makes people, and discount brokerages, a little more reflective. This past week, as part of their 30th anniversary, TD Direct Investing reflected on how the profile of the ‘typical’ investor has changed since the launch of their discount brokerage service in 1984. As part of their news release, TD Direct Investing highlighted that online investors are more diverse with younger investors and women investors forming a greater percentage of the investing population. The timing of this announcement was interesting as there were two separate articles that also highlighted the growing interest and perhaps the advantage that younger investors have in the online trading space.

Mutually Assured Discount

BMO InvestorLine recently announced the roll out of a new group of 33 discounted mutual funds, known as Series D, to online investors. Also in the announcement was the news that management fees were being lowered on the Series F products. The move by BMO InvestorLine into the low-cost mutual fund arena appears to be in line with both RBC Direct Investing and TD Direct Investing in this space.

Discount Brokerages Dealing Back In

A pair of moves in the discount brokerage promotions section over the past week signaled that competition for clients remains high.

Starting with Questrade, they have taken a seat back at the $100,000 table by introducing a cash back offer of $250.  Their iPad mini offer (or cash back) offer for deposits at this level recently expired however this latest move looks like they’re interested in buying back in.

BMO InvestorLine also checked on their $300 + 300 trade offer by further extending the deadline for this deal from April 9th to April 30th.

Little Birdies

Birds chirping is a great sign of spring.  Online however, tweets from investors across the Twitterverse can be a little less delightful. This past week there were a couple of interesting moments we spotted. First, as Questrade found out, even though the ice on the sidewalks is gone, there’s still room for tax slips to cause problems. Of course, with the warmer weather also comes a bit of heat – which is what one twitter user sent Scotia iTrade’s way when asking about the ability to route orders to the new ‘HFT – free’ exchange IEX.

No Party in the TFSA

While Miley Cyrus may enjoy rocking out in the USA, having US dividend paying stocks in a TFSA is a bit of a portfolio wrecking ball. The following video from Rob Carrick and the Investor Education Fund provides a quick overview on how to navigate the tricky waters of withholding taxes and registered accounts.

From the Forums

Bucking a Fee

In the following post from RedFlagDeals, community members were alerted to an interesting observation from an Interactive Brokers Canada client – namely that minimum monthly fees of $10 appear to be waived for clients with assets over $100,000.

D is for…

The announcement by BMO InvestorLine of a low cost mutual fund series that could rival either TD or RBC was certainly enough to get the discussion going on the forums. Interestingly while the announcement caught the attention of forum members, so too did the way in which the roll-out took place.

That does it for this week’s roundup. For those in the west – enjoy the summer, and for those in the east, brace yourselves for a potential dusting. Yes, April is still full of surprises all around. For those trying to make sense of all the heartbleed hype, here is a comical explanation:

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Discount Brokerage Weekly Roundup – April 4, 2014

If the acronym HIMYM means something to you, then you know this past week was a drama filled one on screens across the globe. It’s hard to imagine more drama than the HIMYM ending, however that was certainly the case across the screens of traders as the debate on high frequency trading has taken a very public turn, implicating online brokerages, exchanges and crazy computers.

In this week’s roundup there is a full dance card. We take a look at another major Canadian online brokerage that has connected to the Canadian Securities Exchange, the new set of deals that have come along with the beginning of April, trading volumes from a major US brokerage, a major online trading story rattling investors’ nerves north and south of the border and finally, some interesting views from the Canadian investor forums.

Scotia iTrade Goes Online with the CSE

Although Scotia iTrade had telegraphed earlier in March that they would be enabling online trading with the Canadian Securities Exchange (CSE), a formal announcement was made this past week from the CSE and Scotia iTrade.  For self-directed investors, the move means that it is becoming easier to access trading on this increasingly popular exchange. To learn more about which major online brokerages offer online trading access to the CSE listed stocks, click here.

New Month New Deals

With the month comes a new set of promotions and deals from Canadian online brokerages. The current deals section showcases two of the major offers that were announced in March by TD Direct Investing as well as Desjardins Online Brokerage respectively. Even though there were many deals that expired at the end of March, it is likely that additional offers will be coming from several brokerages looking to get the attention of self-directed investors in the market for a new trading account.

In addition to the list of offers, there is a contest that was announced by Questrade earlier this week focusing on Spring Cleaning one’s portfolio. They will be giving away prizes of 5 free trades per week as well as a grand prize of 10 free trades to one lucky winner. To qualify, individuals must post on the Questrade forum or Facebook page, or write a tweet to @Questrade with #SpringCleaning in the message. For full contest details, click here.

Trading Volumes Steady

Interactive Brokers released their monthly trading statistics from March of 2014. On a year-over-year basis, the latest figures paint an improving picture across key metrics such as daily average revenue trades (DARTs), new accounts and margin loan balances.  When compared on a month-over-month basis, however, the figures are about the same as the previous quarter.

While it is too early to tell what this plateau means, it certainly is an interesting development because the growth rate in retail investor participation may be tapering.

HFT Coming to a Flashpoint

Slowing momentum in retail investor is one thing however a loss of confidence from investors is something completely different.

While the story of whether high frequency trading is harmful to markets or helpful has been playing out over the past few years, it seems that the story has taken a recent twist. Specifically, recent publicity from 60 minutes and media coverage of the book “Flash Boys” by Michael Lewis has touched off a firestorm of scrutiny and renewed the debate on whether or not HFT should be curbed altogether.

Many online brokerages in the US were caught in this crossfire, with the publicly traded ones suffering some early selling pressure of their stocks on the speculation that their participation in paid order flow will either end or be curbed.  Even major trading exchanges, such as BATS, have been caught in the fray.

The story continued to pick up steam as Interactive Brokers announced that they would be connecting to the ‘HFT free’ exchange IEX, started by one of the individuals who blew the cover off HFT practices, Brad Katsuyama.  Within Canada, the promise of an “HFT free” exchange has been taken up by Aequitas Innovations.

The debate on HFT and paid order flow is far from over. With the recent revival of interest and major publicity, it is a safe bet that major Canadian brokerages and market participants will be looking at how to position themselves on the issues of paid order flow and HFT. Stay tuned as this will be exciting to follow.

From the Forums

Algorithms Gone Wild

The debate around HFT was not only played out in the media but also on many threads on the Canadian Investing forums. Here is a list of a few very interesting conversations that took place on high frequency trading:

Financial Wisdom Forum: Proof of Front Running and How to Prevent it

RedFlagDeals Forum: on Stewart interviews Michael Lewis on high frequency trading (HFT)

Tweed Goes Up In Smoke

Every now and then a really instructive moment comes along about how ‘reliable’ online trading can sometimes not be. In an interesting story, a company named ‘Tweed’ that is linked to medical marijuana, had more than a few trading hiccups as it debuted trading.

The following posts highlight some of the frustrations experienced by discount brokerage clients that couldn’t access the early trading. Interestingly, this is one of those times where being shut out by the trading gods actually works out for the best.

That does it for this week’s roundup. For those Game of Throne’s fans that do not manage to catch the premiere, it will be an epic adventure to avoid any spoilers! Good Luck!