The sales and purchase of stock these days are done using computers. This trading requires brokers. A broker is a person involved in the business of transactions for other people for some commission or fee. For trading platforms, computers are considered humans that usually act as brokers.
Many Canadian brokers are available on trading platforms online to help you in trading stocks using online trading accounts. A trading platform is also a kind of an online account used for sales and purchase of stocks in exchange for commission or fee. Here we discuss some of the best trading platforms in Canada.
What is the best trading platform?
The best trading platform is the one that can satisfy your goals and needs. There are different investors that have different preferences. Some investors look for a wide variety of stocks to choose from and they prefer desktop trading. On the other hand, some might look for the interface, and fees including maintenance, accounts, and management.
Canadian trading platforms:
Canada has plenty of online trading platforms to select from. Now is a great time for consumers because there is unmatched competition between buyers and sellers. This competition has brought the prices of the trading down. But it makes the process of selection a little tough.
For instance, RBC Direct Investing, Scotia iTRADE, and BMO InvestorLine, with the AppStore rating of 3.4 stars, 1.4 stars, and 1.8 stars respectively, provide both mobile and desktop trading. But these platforms differ in commission per trade and minimum account pricing. BMO provides accounts for $15,000, while the commission is about $9.95 to $29.00.
How trading platforms work:
People do not open discount brokerage accounts for the sake of uniting other people with their desires. People do it for the sake of money. And to move money from people to places where they can’t move themselves requires a lot of money. The brokers make a good amount with the commission they get plus the extra amount they charge when you do not keep your account in balance or you don’t make a required number of trades.
Analysis of online trading platforms in Canada:
BMO stands for the Bank of Montreal. It was founded in 1817. It is the fourth largest bank in Canada because of its assets. The investing service of BMO was launched in 1988 for the clients to experience self-directed trading. In 2000, the investing service was put online by BMO.
RBC Direct Investing:
RBC is the Royal Bank of Canada. It is the brokerage division of the bank. Royal Bank of Canada is the largest bank because of its market capitalization in the country. It is amongst the oldest banks in Canada. The Royal Bank started in 1860. By that time, it was commonly referred to as the Merchants’ Bank of Halifax.
TD Direct Investing:
TD, the Toronto Dominion Bank has the online brokerage of TD Direct Investing. The Toronto Dominion Bank is the largest in Canada because of its assets. In 1984, TD bank launched its brokerage with the name Greenline Investor Services. It was later changed to TD Direct Investing in 2012.
In 2005, the discount brokerage of America called Ameritrade came in for TD Waterhouse USA. The Waterhouse was owned by the TD bank jointly. The name TD Waterhouse was kept by the Canadian brokerage but later it was changed to TD Direct Investing in 2012.
CIBC Investor’s Edge:
According to Canadian history, the Canadian Imperial Bank of Commerce, or CIBC, came into existence because of a union that took place in 1961, called the “largest merger” of the chartered banks. The union united the Imperial Bank of Canada which was established in 1875 and the Canadian Bank of Commerce established in 1867.
CBIC Investor’s Edge is the brokerage division of the Canadian Imperial Bank of Commerce. It acquired the majority of Wood, Gundy & Co. in 1988 and it has been active in building its business. In 2001, it picked up the retail business of Merrill Lynch & Company.
Qtrade, which is based in Vancouver, started in 2001. Qtrade is formally known as Credential Qtrade Securities Inc. It is a division of Aviso Wealth. Aviso Wealth is well known as an “integrated financial services company” which has assets worth over $57 billion.
Aviso Wealth was formed in 2017 and is still considered a new company. But, it is a merger of three independent financial companies, including Desjardins, the Credit Union Centrals, and The CUMIS group.
Scotia iTrade is the online brokerage of Scotiabank. In 2007, the boutique brokerage TradeFreedom Securities Inc. was acquired by Scotiabank. In the following year, Scotiabank bought ETrade Canada from ETrade, which is a troubled American startup. Despite both the active investors, iTrade expanded its business to serve all its clients. In 1832, Scotiabank was founded as the Bank of Nova Scotia. Later it was changed to Scotiabank.
Wealthsimple, an investment manager based in Toronto, created an app for online trading called Wealthsimple Trade. It started in 2019 when it offered unlimited trades free of commission and also no account minimums. Due to these reasons, Wealthsimple Trade was set apart in the market.
Wealthsimple was founded in 2014 by the CEO Mike Katchen and its majority is held by Power Financial. Wealthsimple has its basis for almost 175,000 clients across the United States, the United Kingdom, and Canada.
The HSBC InvestDirect is the online brokerage arm of the largest bank in Europe, HSBC. It is a multinational bank based in London. HSBC InvestDirect is a branch of the HSBC Direct online banking platform.
Commission per trade: US equities $39.00 + 2¢/share;
CDN Equities $35.00 + 6 ¢/share;
with $100,000 balance $6.88 per trade;
for 150+ trades per quarter $4.88 per trade
National Bank Direct Brokerage:
The National Bank Direct Brokerage is the brokerage arm of the National Bank of Canada which is the largest bank in Quebec. It was founded in 1859 and is also known as the Banque Canadienne Nationale. In 2019, reportedly, the National Bank of Canada possessed $276 billion in assets.
The commission per trade: regular pricing is $9.95 per trade
/6.95 for customers of the National Bank of Canada
/.95 for active traders with 100+ trades per quarter
Desjardins Online Brokerage
In 1991, Quebec financial cooperation was founded, which is about a hundred years old and is the largest. Desjardins Online Brokerage is the brokerage arm of the Quebec financial cooperation. It provides the occasional as well as the active investors the trading platforms they need.
the commission per trade: for active traders $9.95/as low as $5.00
The Interactive Brokers is the Canadian branch of Greenwich, which is a discount brokerage firm. It is based in Canada and it was founded by Thomas Peterffy, a billionaire born in Hungary.
Interactive Brokers is considered one of the earliest online brokerage platforms, and a lot of active traders are helping it grow due to its low trading costs.
the commission per trade: $0.01/share with a minimum of $1.00 per trade
activity fee USD 10 per month; assessed as a fee if the account is inactive on any given month
Virtual Brokers is the division of BBS Securities which was founded in 2009. It is based in Toronto. Virtual Brokers is the first platform in Canada that offers trading free of commission.
Commission per trade: equity trade $1.99 – $7.99
$3.99 for active traders with 150+ trades per quarter.
Trading platforms online are self-directed. The companies are not legally allowed to provide any recommendations related to investments for the shareholders. Investors who are looking for some guidance should consider a robo-advisor which is an investing service. The robo-advisors usually have low fees because they invest money in traded funds with low-cost exchange.
To choose an online trading platform, consider the following;
Any investor can trade in the easiest and cheapest way through an online brokerage or can buy stocks over the phone from humans. The online accounts can be made within ten minutes but, the brokers demand large fees and commissions for trading on behalf of investors. In this case, an investor should know how much he is going to be charged and how much will it take to do trade from his account and how it will affect the commissions.
To become a trader, the investors should know a lot of things apart from trading. If they know the basics of trading like the pro tools, the securities, simple moving averages, stochastics, etc. then they are good to become part-time traders along with their full-time jobs.
Security is the major concern for a trader. Almost all the legit brokers are the members of Investment Industry Regulatory Organization of Canada (IIROC) and some might be working there with different business names. Checking whether the broker is legit is the main and most important step towards becoming a trader.