If you live in Canada, you know how hard it is to find information on Canadian stock trading platforms. Luckily for you my team and I have been analyzing the market for years. In this article, my goal is to help you find a stock trading platform that fits your needs.
I was looking to buy stock in a major Canadian bank. Because I am based in the US, I needed a Canadian stock trading platform that supported Americans. After a ton of research, I came up with this list of the best Canadian online stock trading platforms for American investors.
Questrade
Questrade is Canada’s leading discount brokerage. It offers a great balance of platforms, range of markets to trade and services including multiple account types. Questrade is an excellent choice if you reside in Canada or for international clients looking to trade Canadian and U.S. regional stock exchanges.
- Minimum Deposit: $0.00
- Stock Trade Fee: $4.95
- Options (Per Contract): $1.00
$50 trade commission rebate.
Top Takeaways for 2021
Here are out top findings on Questrade:
- Questrade provides transparent pricing with commission-free ETF trades and discounts available for active traders, with no annual fees.
- Questrade has a full lineup of tools with the desktop-based and web-based platforms IQ Edge and IQ Web.
- Questrade offers Canadian residents access to a great variety of retirement account options. However, U.S. residents are not supported, and clients outside of Canada cannot access Questrade Portfolio IQ accounts.
Overall Summary
| Feature | Questrade |
|---|---|
| Overall | 4.5 Stars |
| Commissions & Fees | 4.5 Stars |
| Platforms & Tools | 4.5 Stars |
| Research | 4.5 Stars |
| Mobile Trading | 3 Stars |
| Offering of Investments | 4.5 Stars |
| Education | 2.5 Stars |
| Ease of Use | 4 Stars |
Commissions and Fees
Questrade offers two pricing plans for trading stocks, options, and ETFs: Self-Directed Investing pricing (the default) and Active Trader pricing.
Self-Directed Investing pricing: For the majority of investors, Questrade’s standard pricing is the best deal.
- Stocks cost $0.01 per share with a minimum charge of $4.95, and a max of $9.95 if you trade 995 shares or more.
- ETFs follow the same structure except you are not charged when you buy — only when you sell an ETF. Options trading is more expensive, with a flat rate of $9.95 plus a $1 fee per contract.
Active Trader pricing: Under Questrade’s Active Trader program, clients must subscribe to at least one advanced market data offering, then select between the variable or fixed-rate pricing plan.
- For trading stocks, the cost is $0.01 per share, with a $0.01 minimum and $6.95 maximum (variable plan) or a flat $4.95 per trade (fixed plan). The variable pricing is best suited for trading smaller quantities and is not a good choice if you trade more than 495 shares.
- Likewise, for trading options, the cost is $6.95 + $0.75 per contract (variable plan) or $4.95 + $0.75 per contract (fixed plan). Lastly, ETF trades are listed as commission-free to buy but incur a $4.95 commission when you sell on the fixed plan; with the variable plan pricing you pay 1 cent per share with a maximum commission of $6.95.
Data subscriptions and rebates: Questrade offers various discounts on monthly market data packages when you spend more in commissions, and the fee may be rebated depending on how much you pay in commissions.
- Buying either Advanced data package unlocks active trader pricing; but it may not be worth it unless your strategy depends on the data or you spend enough in commission to justify the cost and get the fee rebated.
- For example, U.S. Level 1 and 2 (and Canadian Level 1) data costs $89.95 per month and is fully rebated if you spend more than $399.95 in commission.
If you don’t need Level 2 depth of market data, the good news is that Level 1 real-time data is free with all accounts. Meanwhile, you can upgrade to enhanced streaming data for $19.95 per month and that fee is rebated if you spend $48.95 in commission each month.
Questwealth Portfolios: Available exclusively to Canadian residents, Questwealth Portfolios are pre-built investment products by Questrade Wealth Management and incur a 0.25% management fee per year, or 0.20% if you invest more than $100,000.
Questrade portfolios are designed for passive investors and long-term holdings such as within a retirement account. But the fees must be taken into account relative to the historical and expected returns, among other factors, when deciding if they are right for you.
Interactive Brokers
Once again, in 2021, Interactive Brokers is our top pick for professionals because of its institutional-grade desktop trading platform and rock bottom margin rates. Professionals aside, Interactive Brokers also appeals to casual investors with $0 trades and its user-friendly web platform.
- Minimum Deposit: $0.00
- Stock Trade Fee: $0.00
- Options (Per Contract): $0.65
Exclusive: New client offer, special margin rates.
Top Takeaways for 2021
After spending three months testing 11 of the best online brokers for our 11th Annual Review, here are our top findings on Interactive Brokers:
- Interactive Brokers (IBKR) is best known for offering traders access to global markets (135 market centers in 33 countries). Additionally, professionals can take advantage of industry-leading commissions, including the lowest margin rates across all balance tiers.
- As far as Day Trading, Mobile Trading, Options Trading, Futures Trading, and Professional Trading go, Interactive Brokers is a winner. For example, Interactive Brokers offers a staggering 68 different order types.
- Despite clear progress made in simplifying its website for casual investors, including more robust fundamental research and education, Interactive Brokers underperforms the best brokers for beginners. That said, Interactive Brokers still finished Best in Class across eight categories in 2021.
Overall Summary
| Feature | Interactive Brokers |
|---|---|
| Overall | 5 Stars |
| Commissions & Fees | 4.5 Stars |
| Platforms & Tools | 4.5 Stars |
| Research | 5 Stars |
| Mobile Trading | 4.5 Stars |
| Offering of Investments | 5 Stars |
| Education | 4 Stars |
| Ease of Use | 4 Stars |
–> View a full list of Interactive Brokers features
Commissions and Fees
Interactive Brokers offers two primary pricing plans: IBKR Pro (professionals) and IBKR Lite (casual investors). Because Interactive Brokers’ core clientele are professional traders and institutional investors (e.g., hedge funds), it is crucial to provide the lowest commissions schedule available. In our rigorous assessment, there is no question Interactive Brokers delivers. In 2021, Interactive Brokers is Best in Class for Active Trading.
IBKR Lite: With IBKR Lite, there are no market data fees and all US stock and ETF trades are $0, while options trades follow the same IBKR Pro pricing. The main caveat to IBKR Lite is the lower quality order executions. Like other $0 brokers, under IBKR Lite, Interactive Brokers makes money off its order flow. Overall, IBKR Pro is designed for professionals, while IBKR Lite is designed for casual investors.
IBKR Pro stock trades: For small order sizes, i.e., several hundred shares, Interactive Brokers is a fantastic deal. However, trade several thousand shares or more, and Interactive Brokers quickly becomes pricey, even on its tiered pricing, which starts at $.0035 per share ($1 min). As a result, IBKR Pro is not a good choice for trading penny stocks because you will pay a per-share commission.
IBKR Pro options trades: On US exchanges using Interactive Brokers SMART routing, commissions per options contract are tiered. Any premium greater than $.10 equals $.65 per contract with a $1.00 minimum and no maximum. For premiums between $.05 and $.10, the rate is $.50 per contract. Finally, for premiums less than $.05, the rate is $.25 per contract.
IBKR Pro other benefits: Interactive Brokers does not accept payment for order flow, a key element in providing quality order execution. Also, Interactive Brokers leads the industry with the lowest margin rates, which vary from 1.55% down to a staggering 0.75% for clients who hold more than $1 million with the brokerage.
IBKR Pro misc Fees: Traders should be aware of the miscellaneous fees and minimums charged by Interactive Brokers. Put simply, maintain a $100,000 balance or spend at least $30 in commissions each month, and you will be in the clear; otherwise, charges can reach up to $20 per month. For everyday investors and beginners, we recommend IBKR Lite or exploring our list of the best brokers for free trading.
Mutual Funds: Interactive Brokers offers over 30,000 mutual funds globally, with 10,000 in the US. Of the US mutual funds, at least 4,000 are commission-free; otherwise, the standard commission rate is $14.95.
Interactive Brokers pricing summary:
| Feature | Interactive Brokers |
|---|---|
| Minimum Deposit | $0.00 |
| Stock Trades | $0.00 |
| ETF Trade Fee | $0.00 |
| Options (Base Fee) | $0.00 |
| Options (Per Contract) | $0.65 |
| Futures (Per Contract) | $0.85 |
| Mutual Fund Trade Fee | $14.95 |
| Broker Assisted Trade Fee | $30.00 |
Wealthsimple Trade
Wealthsimple Trade is the only stock trading app in Canada to offer commission-free trading for both stocks and ETFs. This makes it my top choice for beginners who want to try their hands at self-directed investing.
The fee savings (up to $9.99/trade) means you won’t have to worry about making multiple small trades and paying a hefty fee each time you buy a stock.
You can use the platform on your laptop, or on your phone via its mobile application.
Wealthsimple Trade is owned by Wealthsimple, Canada’s most popular online wealth manager with over $10 billion in assets under management.
- Account minimum: $0
- Trading commission: $0
- Securities offered: Stocks and ETFs
- Accounts offered: TFSA, RRSP, personal non-registered
- Promotion: Get a $50 cash bonus when you deposit and trade at least $150
- Review: Wealthsimple Trade Review
If you are interested in trading cryptocurrencies, the Wealthsimple Trade app also hosts a crypto platform you can use.
Cons: It does not offer a margin account or DRIP.
Conclusion
Stock trading has come a long way. Where before, you would have to place orders or send faxes to buy or sell stocks, modern online stock trading systems have changed the game – and for the better. To find out which Canadian stock trading platforms are best, there are factors you should consider.