Best forex broker with low commission 2020 - Forex Canada
How-to & FAQ for holding Bitcoin and Ethereum in an RRSP/TFSA
A few months ago I came across a way to hold crypto in my RRSP/TFSA and have been answering questions about how to do that in comments, DM's, and Skype consults. I figured it would be helpful to put together one big comprehensive FAQ. Cryptocurrency is treated as a commodity by the CRA and you must pay capital gains taxes on any profits if held outside a TFSA. If bitcoin goes to $1m as some are predicting, the Canadian government is going to be taxing a huge windfall in capital gains taxes. BACKGROUND Bitcoin & other crypto cannot be held directly in a RRSP/TFSA, and there are no eligible ETF's in North America yet. However, the ETN COINXBT which trades on the Stockholm Stock Exchange in Sweden (Nasdaq Stockholm) is eligible. ABOUT COINXBT COINXBT holds bitcoin directly and its price per share is based on a 0.005 multiple of the current bitcoin price. For example, if the current price of bitcoin is $10000USD, a share of COINXBT will be worth $50USD (ie: $493 Swedish Kroner) Company's website and full prospectus at: https://xbtprovider.com/ Price quote / chart: https://www.bloomberg.com/quote/COINXBT:SS HOW-TO TRADE Only some Canadian brokerages allow you to trade on eligible international exchanges in your TFSA. Some do not. Typically placing trades on international exchanges online is not an option and must be made over the phone broker-assisted at a much higher cost than typical North American securities. CANADIAN BROKERS I've called pretty much every brokerage to inquire if international securities can be held in a TFSA and what the fee is to transact. You may want to call yourself to see if policies have changed, but here's a summary:
National Bank: $75 per trade + $0.06 per share (confirmed works)
TD: Fee dependent on amount traded. Up to $5K is $187, $80K would be $520 per trade (confirmed works)
CIBC: $250 minimum, based on trade amount. $50K would be about $350 to buy and $350 to sell (confirmed works)
Scotia iTrade: $250 CAD per trade CAD, unlimited shares & order size (should work)
BMO Investorline: Fee-based on total trade amount. $50K would be $325 to buy $225 to sell, $50-$60K would be $350 to buy $240 to sell (should work)
Not available, or not available in RRSP/TFSA:
Interactive Brokers, can trade it, but not in RRSP/TFSA
HSBC (has access to almost every exchange other than Stockholm)
FAQ's Are you sure it's legal? I'm quite sure it's illegal.
I used National Bank Direct Brokerage. The fee's came out to $75 per trade + $0.06 per share. For example, the commission for a trade I did for 885 shares of COINXBT was $75 + $53.10 for a total of $128.10. Canadian funds were used to make the purchase and there were no forex fees for converting to Swedish Kroner (SEK)
How do I make a trade once I'm ready?
Call your brokerage and say you want to place a trade on the Stockholm stock exchange. You may be forwarded to a person that specializes in that, and eventually to a broker that deals with placing order on international exchanges. Tell them the symbol to trade is COINXBT and the name of the ETN is "Bitcoin Tracker One".
How do I calculate the number of shares to trade to max out my TFSA?
The price of COINXBT is in SEK. In my case using NB I took my balance minus anticipated fees divided by the current price to see how many shares I could buy. For example: For a $10,000 TFSA, current COINXBT price = $554.77SEK (84.27CAD), would be 117 shares at a cost of $9859.59 + $82.02 commission for a total of $9941.61CAD
Market or Limit order?
The first time I placed an order for COINXBT I tried to place a limit order a little below the market price. Over the next week the price of bitcoin ran up a lot and didn't come down. I ended up buying a lot higher. Since then I've been placing limit orders slightly above the current price or just market orders so that they go through right away. I've had no issues doing it either way.
When can I trade? Is it only possible to make the trade while the Swedish market is open and the TSX are open at the same time? Or can you place the order at any time of day?
XBT Provider has said they will monitor forks for 3-months and then decide what action to take. In the case of Bitcoin Cash, they sold the forked coins and distributed it as a dividend to anyone that held ETN shares on the fork date.
What about other cryptocurrencies?
An ethereum ETN was recently launched: COINETH that also trades on the Stockholm exchange. https://www.bloomberg.com/quote/COINETH:SS Other than that, I am not aware of any other eligible crypto securities that can be held in a RRSP/TFSA
How is the price of COINXBT determined?
It's based on the average price of the top 3 exchanges
Why not just buy GBTC?
GBTC is traded on the OTC exchange in the US and is not RRSP/TFSA eligible
Why can't I place a trade online myself?
For now, there are no crypto ETF's on North American exchanges. They have been in the works for years in the US, but no approvals yet. Evolve funds recently said they plan to launch a Canadian Bitcoin ETF. Trading COINXBT is a bit of a hassle, but you're getting in ahead of everyone else that are not willing to put in the time/effort. Once the Canadian/US ETF launches, it will probably be worth it to sell COINXBT and switch to the North American one which should be easy to trade online just like other ETF's.
Feedback If you've managed to get crypto into your RRSP/TFSA in any other ways than listed above please do leave a comment and I'll update the post. Thanks!
Question on Stops (manual exit vs stop limit) and trading system (ie: IQEdge, etc) for daytrading
I have been papertrading and reading up on everything for the last couple months as I am completely new to this World. A few questions here:
What broker is good for the actual trading system. So Questrade has IQEDGE (for example) and then IB and Virtual Brokers have their own systems of course. Is there one system that active daytraders prefer OR any other loved systems beyond these? Most reviews have been heavily based on commissions, but I feel that I can get those down in cost eventually based on my trade volume and well, you have to spend money to make money right! I really want the best system and don't want to start with Questrade and then realize I should have gone with IB (for example) a few months later.
Maybe I am completely missing out on something, but I am understanding that with TSX you cannot do a stop (just stop limit) from all my reading. How do you protect yourself properly? I understand I can set my limit and stop to be different, but I really would rather just have a market sell, as I am scared for the stop limit to skip over me. I am having a very high win rate practicing (I don't stay in the trade long and generally do around 1000 shares) but haven't experienced any drastic drops yet and want to understand the best risk management. If I am generally going with ~$20 stocks, do I set the stop limit around .10 off between stop & limit? Or do I watch for a drop and manually do a market sell if I see the market dipping (based on my exit strategy)?
Side note: I feel like I may eventually switch over to US markets or Forex but I want to start simple and with what I have been practicing so I am not stuck in 'reading/learning land' forever ;) Thanks in advance, any info helps!!
Hi all - I'm new to the investment world and don't really have a big pool of cash to work with. I want to invest in stocks that pay frequent dividends (monthly), that are also low cost so I can purchase multiple and thus minimize my commission charges per share, or adjusted cost base (if that's the right term, please correct me). I trade on questrade and don't want to deal with FOREX so I'd like to stay within the TSX. I also have very limited knowledge on finance/stocks. I know you need to purchase before the ex-dividend date to receive the dividend. I also know that once dividends are paid, the stock price typically drops by the same amount. Thus what is the best time in a monthly cycle to purchase a stock that pays monthly dividend. Thanks and please correct me where I'm wrong, always learning
Hey guys! This is first time for me to be on Reddit, so please kindly let me know if I post in wrong place. I am quite new to stock market and do not have that much fund as I could probably invest about $1000. But, I guess it is worth to start trading as it seems that I finally find something that I am interested in. I have been doing a paper trading, but I realize there are moments I miss a place to buy. Although I have tried to trade with my CIBC InvestorEdge but, the commission really hurts me as my capital is too small. Moreover, I am interested in either day trading or swing trading, so commission really matters, which is the reason why I would like to use Questrade as their benefit for ETFs is just too good to be true. Back to what I was saying, this is very frustrating and I was trying to find a way to solve this problem (enter at the price I want. I used limit order but.... it sometimes requires even faster calculation which is not really ideal), and I heard there are ways to do with computer programming. I am currently majoring in mathematics, and know how to program in python, Java and matlab. I was looking into MQL4 but it does not seem to be working for buying ETFs or Stocks. Please give me some tips what to do. FYI, I am currently in BC Canada, so I believe I wouldn't be able to do Forex.
Question on Stops (manual exit vs stop limit) and actual trading system/program (Questrade, IB, VB) for new Daytrader
I have been papertrading and reading up on everything for the last couple months as I am completely new to this World. A few questions here:
What broker is good for the actual trading system. So Questrade has IQEDGE (for example) and then IB and Virtual Brokers have their own systems of course. Is there one system that active daytraders prefer OR any other loved systems beyond these (fees ok as most likely my trading volume can offset cost a bit)? Most reviews have been heavily based on commissions, but I feel that I can get those down in price eventually based on my trade volume and well, you have to spend money to make money right! I really want the best system and don't want to start with Questrade and then realize I should have gone with IB (for example) a few months later.
Maybe I am completely noobing out on this, but I am understanding that with TSX you cannot do a stop (just stop limit) from all my reading. How do you protect yourself properly? I understand I can set my limit and stop to be different, but I really would rather just have a market sell, as I am scared for the stop limit to skip over me. I am having a 80-100% win rate practicing but haven't experienced any drastic drops yet and want to understand the best risk management. If I am generally going with ~$20 stocks, do I set the stop limit around .10 off between stop & limit? Or do I watch for a drop and manually do a market sell if I see the market dipping (based on my exit strategy)?
Side note: I feel like I may eventually switch over to US markets or Forex but I want to start simple and with what I have been practicing so I am not stuck in 'reading/learning land' forever ;) Thanks in advance!
My experience with Norbit's Gambit [google sheets link included]
Just want to share my experience doing Norbit's Gambit, for anyone that may want to learn on my experience, or tell me all the ways in which I am wrong. I've posted a question earlier, asking how to make sure the market didn't swing in the wrong direction. And yes, I understand it's called a "gambit" for a reason. === TL;DR === - Wanted to save $65 on currency conversion while buying CAD $3,500 worth of US stock - Overestimated forex fee, underestimated NG cost - Murphy happened... - Lost potential gains of CAD $185.80 while waiting - Is the gambit ever worth it? === The goal === - On August 25th, use about CAD $3,500 to buy some US Netflix (NFLX) shares === The method === - Buy DLR in CAD - Call brokerage to journal over to US side - Sell DLR.U in USD - Buy NFLX with USD In a lot of my research, I've been told the "fee" when going through the brokerage (Questrade in my case) is 2%. That's not too accurate. === The brokerage Forex rate/fee === So I assumed 2% of $3,500 would be $70. However it's really an addition of 199 basis points to the exchange rate. I believe they use the closing exchange rate on the date of the transaction. So if the exchange was 1.2500, it's 1.2699, and $CAD 1000 nets $USD 787.46 ($USD 12.54 short of ideal $USD 800). If we convert 12.54 to CAD, it's $CAD 15.68 or 1.568% on the original $CAD 1000. But if the exchange is 1.2200, it's 1.2399, and $CAD 1000 nets $USD 806.51 ($USD 13.16 short of ideal $USD 819.67). If we convert 13.16 to CAD, it's $CAD 16.06 of 1.606% of the original $CAD 1000 The "conversion fee" is dependent on the exchange rate, but I can't figure out a quick direct way to calculate what the "fee" would be in source currency %. The closest guesstimate is to divide the basis points by the current exchange rate, as below:
In first example, 0.0199 / 1.25 = 0.0159 or 1.59%
In second example, 0.0199 / 1.22 = 0.0163 or 1.63%
On August 25th, the exchange rate was 1.2483. So the above guesstimate for the Forex "fee" would be $55.80. Or more accurately $54.91, close enough. Still, that's 21.5% lower than the broad *$70** estimate earlier.* === The NG effective fee === Here once again, the common consensus is that the NG's fee is just a cost of buying and selling an ETF. So, with QT's free ETF purchases, the guesstimate is just about $5 for the selling commission. When I bought DLR ETF on August 25th, I got it for CAD $12.42 per share (that's not the day's close price, but what I actually paid). the US side of DLR.U is always US $9.93. The gives the DLR Exchange Rate of 1.2508... already different from the ideal 1.2483 (I suppose that's how the ETF makes money)
CAD $3,502.44 buys 282 whole shares of DLR (I will address the extra $2.44 later)
No buying comm, but ECN of CAD $0.0035 * 282 = $0.99
Selling comm and ECN: US $0.99 + $4.95 = $5.94
So, it would appear the cost/fee of NG is just CAD $0.99 + US $5.94 (CAD $8.40)... but not quite. Let's look as the actual US dollar amounts. Since we can only buy whole shares of DLR + ECN fee, from this point I am converting CAD $3,502.44 + $0.99 = $3,503.43
Ideally, with exchange of 1.2483, CAD $3,503.43 nets US $2,806.56
I paid CAD $3,503.43 to buy 282 DLR shares
I sold DLR @9.93 for US $2,800.26
Less US $5.94 comm+ENC leaves me with actual cash of US $2,794.32
The difference between the ideal US $amount and what I am left with is the "fee" for doing NG. US $12.24, or CAD $15.28. This sets the NG's Effective Exchange Rate as 1.2538 or a "NG's fee" of 0.44%. Please note that this rate/fee is *based on the converted amount*: the more you convert, the less/cheaper it is. So comparing the actual cost of NG vs QT's auto conversion and the guesstimates is quite different - Actual $15.28 vs $54.91 ($39.63 spread) - Guesstimate $5 vs $70 ($65 spread) === The Time factor === Now that I have US $2,794.32, let's buy some NFLX. The date now is Sept 5th (yes, the NG completed earlier, but I am human... also QT didn't call me when the journaling was completed so I got sidetracked). Before doing the NG, I calculated that NFLX dropped about 2.02% in 10 days. It could also go up by same amount. That 2.02% rise on CAD $3,500 value would be a gain of $70.7... comparable to $65 guesstimate loss of doing currency auto-conversion through QT (QTAC). So in my analysis, at worth case it would be a wash, in best case I save some money on NG. ... We already know now that the actual cost of QTAC is much less ....
On September 5th, NFLX traded (at time of my purchase) at $178.79
That's a 6.74% increase of August 25th's price of $167.50 (at the time of me recording the price)
US $2,794.32 buys 15 whole shares for $2,681.85 + $4.95 Comm = US $2,686.80 spent. [Weirdly enough I had no US ECN fees in spite of doing odd lot market orders]
This leaves US $107.52 in cash
Total US Portfolio value (cash + NFLX value) $107.52 + $2,681.85 = $2,789.37
This was the end result of my NG: spent CAD $3,503.43 and 11 days later I have a US stock+cash Portfolio of value US $2,789.37 But considering the increase in NFLX stock over those 11 days, what if I would have just went with Questrade's Auto-conversion (QTAC) route?
QTAC exchange rate on August 25th, 1.2483 + 0.0199 = 1.2682
CAD $3,503.43 will net US $2,762.52
That would buy 16 whole NFLX shares @167.50 for US $2,680 + $4.95 comm
Total spent US $2,684.95 and left with $77.57 cash
Cash + NFLX Portfolio value US $2,757.57
In 11 days, the value of NFLX is @178.79 - Current value of 16 NFLX shares = US $2,860.64 - Plus cash US $77.57 for a Total Portfolio Value of US $2,938.21 If, on August 25th, I would have auto converted currency with QT and bought NFLX, I would have a portfolio value of US $2,938.21 on September 5th. Instead, starting the Norbit's Gambit on August 25th, I bought NFLX on Sept 5th and have a portfolio value of US $2,789.37 Instead of saving a guesstimate of CAD $65, I have lost potential gains of US $148.84 or CAD $185.80 === Murphy... or Loonie... whatever === In all of above, I tried to keep the currency fluctuations isolated. So apart from initial conversion on August 25th, all my future (September 5th) portfolio values were in USD. But as Murphy would have it, the BoC rate announcement made the loonie stronger in between my NG.
On September 5th, the ideal exchange rate jumped to 1.2235
DLDLR.U had a somewhat delayed reaction, and was almost same at 1.2236
Based on above, doing QT auto-conversion - On August 25th, nets US $2,762.52 - On September 5th, nets US $2,817.62 I would have got US $55.10 more just by doing the QTAC later. If I would have bought NFLX on September 5th after doing QTAC - 15 whole shares @178.79 + $4.95 comm leaves me with US $130.82 in cash - Total NFLX + Cash portfolio value of US $2,812.67 That's still US $23.30 more than doing the NG, although still less than just buying NFLX outright on August 25th and letting it grow. === Final conclusion === Smaller amount (CAD $3,500) for NG for a stock purchase that could/did swing 6% was not worth it. Loonie getting stronger also made the whole exercise fruitless, but even eliminating the currency fluctuation, the growth of the stock outperformed the savings of NG. Playing with my numbers, assuming the currency fluctuation is fixed, for CAD $3,500, doing Norbit's Gambit vs Questrade's Auto-Conversion is breaking even when the stock appreciation is no more than 1.18% during the time it takes to complete NG (11 days in my case). Even if you are more punctual and can complete it in 5 days, you still need to make sure the stock doesn't appreciate more than 1.18% in 5 days. By comparison, if converting CAD $10,000, it's break even if stock rises 1.27% during that time. When doing CAD $50,000 then 1.31% Hmm.... so even at high amounts of CAD $50,000 the tolerance to stock fluctuation is pretty low. So is it worth it? Ultimately I've:
So I just found out recently that when I purchased US stocks with CAD on Questrade. They hid the forex fee through the conversion rate. This whole time when I was reviewing my trades I thought the exchange between CAD / USD was pretty much on par since it mentioned $0.00 commission. So after buying about $17k of stocks, it seems that I lost about $450 USD from conversion :( which is a lot for a 22 year old student who doesn't earn much. Is there a way I can avoid the extra conversion costs? I don't have a US chequing account so could I bring USD to a bank and then send the money to questrade with US cash that I exchanged somewhere else at a lower cost. Another option is swap my portfolio to Interactive Broker now that my portfolio is >$10k? But I'd need to wire the money over to then.
Just opened my first investing account with Questrade. I have long term investments (ETF's and Index funds) with Wealthsimple already. Looking to learn how to trade stocks now. Going to read books and use the practice account well before I put real money in. I believe Questrade says the minimum is $1000, which is what I will put in when ready. Does anyone have any advice for me? Looking to read the Intelligent Investor too but everyone has taken it at the library.. I know I won't get rich quickly and the process will be hard. Tried dabbling in Forex for a while however did not really enjoy it. Would find it more interesting to monitor companies and corporations. Also, I was looking at going with Virtual Brokers but picked Questrade instead. Does anybody recommend VB? I saw they have commission free accounts, but not sure about long term costs etc. People seem to like Questrade more on reddit. Excited to see what happens!
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NORBERT GAMBIT on Questrade - Avoid Forex Fees! - YouTube
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