How to Buy Canadian Stocks
Massive Capital Opportunities Are Waiting for You Right Across the Border in the Toronto Stock Exchange and TSX Venture Exchange
Here's How You Can Get in NOW . . .
It seems as if everyone wants a piece of the Canadian stock exchanges nowadays.
And it's no wonder why.
Both the Toronto Stock Exchange (TSX) and the TSX Venture Exchange (TSXV) have outperformed the Dow, NASDAQ, and S&P 500 by a huge margin over the past few years. Take a look . . .
Enough said.
But here's the thing . . .
Most Americans don't have a clue where they can go to buy and sell Canadian equities. I know this because of the massive number of emails I get asking for help trading Canadian stocks.
So, I decided to put together this report to point investors who are interested in buying Canadian equities in the right direction.
Today, the majority of U.S. citizens trade stocks online through brokers like AmeriTrade, Fidelity, and Scottrade. And for the most part, these brokers won't allow Americans to trade Canadian stocks.
If a Canadian company has a U.S. listing, then buying and selling it are no problem. But the percentage of Canadian companies that are actually listed on an American exchange is very low.
So if you want to trade Canadian stocks that don't have a U.S. listing, you need to open an account with a new broker.
In my years of trading experience in the Canadian market, I have found several online trading sites that accommodate different needs. I want to quickly tell you about a few that I usually recommend . . .
PennTrade
PennTrade is an easytouse broker that a lot of readers like to go through even though they're a bit pricey. Their commission is a hefty $29.95 per trade. However, to offset this commission, Penntrade offers several sweet incentives that you should take into consideration when choosing an online broker. They have no extra charges for market orders, limit orders, large volume, small volume, or stocks under $1.00. Plus every tenth trade is free.
A small "activity assessment fee," related to Section 31 of the Securities and Exchange Act of 1934, applies on sell transactions. The rate for 2006 is $0.0307-about three cents-per $1,000 of sale proceeds. This rate is adjusted annually by the SEC and posted on its website.
PennTrade requires only $500 to open an account, which can be met with cash, equivalent securities or any combination of the two.
For more information on PennTrade, check out their website at www.PennTrade.com.
Interactive Brokers
Interactive Brokers is another firm that readers like because they allow U.S. citizens to economically trade Canadian equities, stocks from eight other countries as well as FOREX and bonds.
The commission on Canadian trades is only one cent (Canadian) per share traded with a minimum commission of CAD2.00 and a maximum commission of 0.2% of the trade value.
Check out the complete list of commission fees below . . .
For more info on Interactive Brokers' commission fees, click here.
Interactive Brokers offers all the same standard trading tools that you would expect from AmeriTrade or any other big name online broker.
For more information on Interactive Brokers, check out their website at www.interactivebrokers.com.
Here is some information on two more brokers that will allow you to trade Canadian stocks, although I am less familiar with these companies.
CIBC Investor's Edge
CIBC charges $25 for trades up to 1,000 shares in U.S. or Canadian equities. The majority of mutual funds available through CIBC can be purchased without frontend loads. As long as you keep $5,000 in your nonregistered account you won't have to pay any maintenance fees. They also provide a nifty commission calculator that you can access here. For more information on CIBC Investor's Edge, check out their website at www.investorsedge.cibc.com.
eNorthern
eNorthern charges a flat rate of $24 for trades up to 1,200. In addition to their flat fee, they also charge commission. If the stock price is less than or equal to $2, they pull 1.5% commission from the dollar value of the trade. If the share costs more than $2 it's an extra 2.5 cents per share. For more information on eNorthern, check out their website at www.enorthern.com.
Other brokerages that readers have sent in include:
One last option . . .
I know there are many people who still feel uncomfortable trading stocks online and prefer to do it the old fashioned way.
If this sounds like something you're interested in, then I recommend going through Canaccord Capital Corp.
We have established a contact for readers who are interested in buying Canadian stocks this way.
Contact Mike Bruin through his email address at mike_bruin@canaccord.com.
You can also call Mike tollfree at 800.663.8061 ext. 7438 or directly at 604.643.7438.
Well, there you have it. A brief rundown of options for buying Canadian stocks. They are all pretty much the same, give or take a few dollars or cents on flat fees and commission rates. But make sure to investigate them all to find the broker that fits your personal trading style.
You can download the PDF version here: How to Buy Canadian Stocks
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