Posted on

Discount Brokerage Weekly Roundup – Nov. 9th 2012

The big news from the Canadian discount brokerage industry this week was the huge announcement that OptionsXpress will no longer be available in Canada.  Virtual Brokers will be acquiring all of the OptionsXpress Canada accounts as of December 1st pending regulatory approval. This now narrows the number of Canadian discount brokerages that provide a powerful and easy to use options trading platform along with great stock market education resources down by one.  According to an apparent notice sent to clients (which we found posted here but cannot confirm its authenticity) from OptionsXpress Canada, individuals who wish to transfer to another discount brokerage must let OptionsXpress Canada know in writing before November 23rd otherwise the account will be passed along to Virtual Brokers. Be sure to contact OptionsXpress Canada directly for any questions.

Questrade announced this week that they are serving as market maker on behalf of Foran Mining Corporation (FOM on the TSX Venture Exchange).  The one year agreement will take effect November 12th and Questrade will receive $5,500/month for these services.  Questrade has been somewhat active in adding companies to its market making segment adding American Vanadium, Red Tiger Mining and Destiny Media earlier this year.  To see the TSX market makers list, click here.

When National Bank Direct Brokerage announced via twitter that they have a LinkedIn page we got a little excited as they’re currently not really around on the social media scene except via their parent National Bank’s twitter feed (to see who which discount brokerages are active on social media, click here). Unfortunately, when we stopped by to have a look around there wasn’t a lot of content on there yet.

Don’t forget, November is Financial Literacy Month.  We’ll be posting all sorts of interesting gems for self-directed investors to help them enhance their knowledge of investing and finance. For more information on Financial Literacy Month activities, check out this page here.

Best Canadian Discount Brokerage Tweet of the Week

Even though the LinkedIn tweet left us scratching our heads a little, National Bank managed to score another tweet of the week for their Clearfacts newsletter on the difference between investing and trading.  You can read the article via their tweet here.

Event Horizon

This upcoming week has a couple of presentations for self-directed investors that are likely to be interesting.  Tyler Bollhorn’s new book, The Mindless Investor, is launching so he’s running a couple of free sessions to explain some of the principles from his book and how do-it-yourself investors can use these to help them with their trading.  Sessions will be held in Calgary (Nov. 12th) and Vancouver (Nov. 13th).

The People Have Spoken

Sometimes matching stock orders between buyers and sellers takes time.   It’s usually why discount brokerages give themselves a few days to get things settled behind the scenes.  Usually it’s a three day (known as T+3 as in Time + 3 days) window between the transaction date and the settlement date (for a great explanation, see this link).  This week, forum poster raxdax10 wanted to know why the money didn’t appear on their TD Waterhouse discount brokerage account after selling a stock.  Read what some helpful folks had to say here.

Posted on 1 Comment

OptionsXpress Canada officially exiting the Canadian Discount Brokerage market

The Canadian discount brokerage market this week saw one of the players officially exit by selling their Canadian operations.  Virtual Brokers announced today that they will be buying out OptionsXpress Canada effectively signaling the end of OptionsXpress in Canada and shrinking the number of big discount brokerages by one.  The business agreement is set to take effect on December 1st pending regulatory approval.

OptionsXpress Canada, which is owned by American discount brokerage Charles Schwab, had put their Canadian business under review in September and halted accepting new Canadian clients. The fact that Canada’s discount brokerage industry is shrinking in not entirely a surprise given the size of the Canadian market and the number of competitors battling for their share of the investor pie.  With investor sentiment keeping many out of the markets as well, discount brokerages have faced some major headwinds in trying to gain new business.

For Virtual Brokers, the additional accounts will provide a lift to their business, assuming they can hold on to the new accounts. Those used to the OptionsXpress platform and suite of services may be on the hunt for something similar.  Also, Virtual Brokers is already working through the recently announced decision to move the back office functions of trade clearing away from Penson and bring it in-house. While they may be busier than usual, the official statement from Virtual Brokers (which can be found in the following news release) suggests this is another big stride in their race to deliver a competitive experience for consumers.

Posted on Leave a comment

Discount Brokerage Weekly Roundup – Oct. 20th 2012

Discount Brokerage Weekly Roundup

From the Canadian discount brokerages, this past week saw the launch of a new contest by Questrade  called “Ring the bell with Questrade”.  Winners of the contest will get to ring the opening bell at the NASDAQ MarketSite and round trip airfare to New York City, three nights’ accommodation and $500 in spending money. For contest details you can click here.   TD Waterhouse Discount Brokerage officially announced the Thinkorswim Canada platform (which readers of already heard about a few days earlier here).  Some feature upgrades to the services at BMO Investorline earlier this month include the Recognia-based Technical InsightTM Tool being deployed (you can read the news release here).  Recognia’s tools are a popular offering amongst many Canadian discount brokerages and provide technical analysis tools and screening for major stock indices in Canada and the US.

For the US discount brokers, several discount brokerages reported their quarterly earnings.  While Schwab reported a third quarter profit increase of 12 percent, the interesting stats were the drop in revenue trades (down 19% year over year) and a huge 61% drop in new brokerage accounts opened compared to last year. Full details on the Schwab release can be found here. Etrade also reported their earnings which came in lower than expected, and also saw a 61% drop in new accounts vs last quarter.  Interactive Brokers also reported a decrease in their earnings year over year and while new accounts grew 11% year over year, they too seem be suffering from decreased trading volumes (19% lower year over year).  TD Ameritrade reports later this month. For a quick overview of the US discount brokerage stocks, check out this Forbes article here.

On the hiring front, social media folks take note. There appears to be some opportunities to work for a couple of Canadian discount brokerages if you’re so inclined.

Best Canadian Discount Brokerage Tweet of the Week

This week’s best tweet comes from @nationalbank (on behalf of National Bank discount brokerage) via their content partners at @DesautelsMcGill.  The article, entitled ‘knowledge investing: the path to safer returns – part 1’ takes a look through the lens of value investing and the role that knowledge can play in selecting potential investments. You can access @nationalbank’s tweet here.

Event Horizon

This Saturday October 27th TD Waterhouse will be putting on its Direct Investing Expo in Vancouver. There will be a number of speakers including Bob Gorman, Chief Portfolio Strategist for TD Waterhouse.  For details click here.

The People Have Spoken

The following thread on Canadian money forum discussing the launch of ThinkorSwim Canada saw some good tips on the platform and eligibility along with the usual digs/cheers for favourite platforms.

Posted on Leave a comment

Penson Financial Services Canada Closing Down

For most Canadian investors and traders who place their trades online, the details of what happens after they press ‘buy’ or ‘sell’ on their stock trades is largely a trivial matter.  Should one start to think about it, however, the process of matching up millions of orders, confirming trades and documenting what went to whom and where can get fairly complicated very quickly.  Penson Financial Services Canada, a company that specialized in tackling that complexity by tracking those orders for a number of Canadian discount brokerages (such as Questrade and Virtual Brokers), has decided to wind down its Canadian operations. The decision appears to primarily impact the back office operations of Questrade, Virtual Brokers and Disnat.

According to the release on their website, Penson Financial Services Canada has estimated that the wind-down will take approximately six months commencing October 1st, 2012.  During this transition phase, client accounts will be referred along to new “carrying brokers” or “custodians”, with many of those clients being handed off to Fidelity Clearing Canada ULC in a deal struck between the two organizations. It was on the heels of this announcement by Penson Financial Services Canada that both Questrade and Virtual Brokers announced their intentions to form their own in-house clearing arms (you can read the official news releases for Questrade here and for Virtual Brokers here). Although not formally announced, it appears Disnat too will be moving clearing and settlement operations in-house.

For Questrade and Virtual Brokers, both these companies felt that the move to clear trades in-house was a natural progression in their evolution as businesses, with the timing of Penson’s closing provided a natural window for them to make the transition.  Most of the major Canadian bank-owned discount brokerages already do the clearing and settlement activities in-house, with only a handful of Canadian discount brokerages, such as Jitneytrade and HSBC Investdirect outsourcing this back office activity to third parties.

For the clients of Questrade and Virtual Brokers, the respective brokerages have promised the transition to be seamless. In the case of Virtual Brokers, for example, their systems have been running in parallel with Penson’s for three years, so there has been ample time to ensure when the time to go it alone came, they would be ready.  In addition to technical requirements, rigorous audits, planning and monitoring protocols have also been developed to support this transition.  Ultimately, depending on how efficient the back office functions are, the savings from not having a third-party clear and settle trades, maintain records and prepare and distribute client statements and trade confirmations, could result in more competitive pricing than is already being offered. Like all things of this complexity though, it will be easier said than done.

While the impact of the closure of Penson Financial Services Canada on retail investors will likely (and hopefully) go unnoticed, one of the most interesting aspects of this turn of events is that it points out that even the ‘middleman’ can get squeezed out, a lesson full-service discount brokerages have learned all too well.


Posted on 3 Comments

Thinkorswim Now Accepting Canadian Accounts

It’s official – Thinkorswim Canada (part of TD Waterhouse Discount Brokerage)  is now accepting new Canadian accounts.  For the moment, this service will allow TD Waterhouse discount brokerage clients to trade US equities and options and only through a US Dollar margin account.

Several discount brokerages have been rolling out new platforms recently including Scotia iTrade’s FlightDesk, and Questrade’s IQ, but from a features perspective, the Thinkorswim platform will be a genuine challenge for other Canadian discount brokerages thinkorswimto compete with.  Aside from being incredibly well-reviewed and designed, one of the biggest features that Thinkorswim will offer is the robust order type support for both stocks and options.  In addition to stop orders, Thinkorswim also supports conditional orders (also known as bracket orders), ladder orders and multi-leg orders.   The image (right) was taken from the Thinkorswim Canada section of the TD Waterhouse Discount Brokerage page (click here to see the full page) in reference to the order types available on the platform.

There are three versions of the software platform – mobile, web-based and desktop.  The web-based platform uses Flash (take note Mac/iPad users) and the desktop version uses Java 2, so while the web-based version might be a bit of a pain for Mac users, the desktop version should be compatible with PC’s & Mac’s.

The data fees associated with the platform appear to be waived until April of 2013 for all users, and starting in April of 2013 if you make 10 of fewer trades per quarter you will be billed $29/month. Thinkorswim customer support provided the following info on commission rates:

Commission is $9.99 flat fee for stock trading and $9.99 base fee plus $1.25 per contract for option trading.   Exercise and assignment of options is $15 flat fee.   We also allow the buyback of short option positions that are valued at 5 cents or less free of charge...Please note we do have a minimum equity and trade requirement of $10,000 and 30 trades per quarter.

The commission rates quoted are in line with TD Waterhouse discount brokerage’s fees for active traders,  and it is important to note the minimum equity and trade requirements associated with the account. If you fall below the stated minimums there might be some flexibility on keeping you on the thinkorswim platform but there is also the risk you will get “downgraded” to the WebBroker platform.

For more information on thinkorswim Canada, you can check out their webpage here.

Posted on 2 Comments

thinkorswim Canada almost ready to accept new clients

One of the best rated stock and options trading platforms, thinkorswim, looks like it will be opening its doors again for Canadian investors.  From various conversations with TD Waterhouse discount brokerage representatives, traders and investors alike,  regaining access to the thinkorswim platform for Canadian discount brokerage clients has been widely anticipated.  Finally, it seems that there is a definitive timeframe that has been provided for a roll out to new clients.

It appears that thinkorswim is in the midst of a technical upgrade but sometime in October they should be back to accepting Canadian clients.  Since thinkorswim Canada is owned by TD Waterhouse discount brokerage, you’ll have to be a client of TD Waterhouse to gain access to the thinkorswim platform.  Specifically, only US dollar personal margin account or corporate accounts will be able to use thinkorswim and trading will be limited to US stocks and options.

Additional conditions include a minimum account opening amount of $10,000 and minimum trading activity of 30 trades per quarter.  Trade commissions will be charged at $9.99 flat fee for stock trades and $9.99 +$1.25/contract for options trading.  Option assignments will cost $15 flat. Interestingly, there are currently no platform fees for thinkorswim.

To find out more information on the platform or to download a free trial of their software (a great ‘try before you buy’ feature) you can visit the thinkorswim Canada page here.

Posted on Leave a comment

Questrade mobile trading app officially released

Earlier this week, Questrade officially launched their IQ Mobile for Android and iPhone and with that they join the rank of other discount brokerages who’ve created mobile-friendly sites or smartphone apps for trading (to see who else offers mobile trading apps check out our review here).

Questrade’s mobile trading app will help investors and traders execute trades, find out stock quote information and check their account and trade position statuses from their smartphones.  The stock price quotes are provided as “snap quotes” (meaning you need to click to refresh the prices). One of the neat features is the integration of the mobile platform with their other IQ trading platforms.   Blackberry users will have to wait until the fall for a version of the mobile IQ compatible with their smart phones.

To learn more about the IQ mobile platform, you can click here and if you want to see Questrade’s video tour of the IQ mobile, check out the video below.

Posted on Leave a comment

TD Waterhouse Discount Brokerage – Special Offer for New Account

We picked up this deal on our radar by attending a free educational seminar at the TD Waterhouse Discount Brokerage Investor Centre in downtown Vancouver (check out our review here).  As you can see from the image below, this is an “unadvertised” deal that gives customers who open a new TD Waterhouse Discount Brokerage account 10 free trades if they deposit a minimum of $25,000.  There’s also a refer-a-friend bonus of 10 free trades if you refer someone to TD Waterhouse Discount Brokerage.  Note that this deal is only valid at the downtown Vancouver TD Waterhouse Investor Centre.

discount brokerage special offer

Posted on Leave a comment

Update on Questrade Pricing Change

Questrade Pricing Change:

Here’s one for the “you don’t see this from a financial institution every day”.  We reported a recent announcement from Questrade in which they stated that they would be implementing a minimum activity threshold of one trade a month starting in July 2012 for those account holders with less than $5000 in their account. Those who did not make the one trade a month or have more than $5000 would be subject to a fee of $9.95.   This is still posted on their website as you can see here in the following picture taken on May 17th:

questrade pricing


It turns out, however, that after thousands of customers that use the popular deal site Red Flag Deals saw this and several hundred complained, Questrade decided that they may need to rethink their strategy on raising prices. The director of communications for Questrade, Lynn Suderman,  has now announced how Questrade is going to charge customers for inactivity fees according to the announcement below.  I use the word “supposedly” because this message does NOT appear anywhere on the Questrade website and so should be taken with caution. [Update: I have received an email from Lynn confirming this change will be announced soon and updated on their website over the upcoming weekend]

The highlights of the supposed new fee format are:

  • If your account has less than $5000 in it, to avoid paying an inactivity fee you have to make one trade per quarter otherwise it’s a charge of $19.95
  • Trades placed in the quarter after you have been charged a quarterly inactivity fee will be free up to the value of $19.95
  • Clients under the age of 25 don’t pay any inactivity fees whatsoever (= regardless of their balance or activity level there is no activity fee)
  • Households (clients living in the same physical address) with a total of greater than $5000 in Questrade accounts don’t pay the inactivity fee
  • This fee change will not take effect until September 30 (instead of the previously mentioned July 10) 2012

We’ll keep monitoring this situation as it unfolds, however for the time being it looks like the responses to this change are mildly positive.  Surely there are many customers and potential customers that have been put off by the increasing in prices, however there are also many customers who saw this gesture by Questrade as an olive branch and a reasonable compromise.


Posted on Leave a comment

Questrade to charge minimum activity fee starting July 10

Questrade just made the following announcement via email:

Inactivity fee

As of July 10th, 2012, an inactivity fee of $9.95 per month is charged to clients with under $5,000 in combined equity for any month in which the client does not complete one commissionable trade. Clients are exempt from this fee if the account is open for less than 6 months.

This is a big shift from their historical position as the “no fee” discount brokerage.   To read more about the announcement you can click here.

If you’d like to check out who doesn’t charge a minimum fee you can click through our Canadian discount brokerage comparison section.