Special Report: How to Invest in the Canadian Market

If you've found your way to this report, you're probably interested in buying Canadian cannabis stocks.

If this is true, you're in the nick of time. Big things are coming down the pike for the Canadian cannabis market.

As the U.S. sits around and twiddles its thumbs, Canada is sprinting toward nationwide legalization. This move will send Canadian cannabis stock skyrocketing.

Canadian Prime Minister Justin Trudeau expects to see legal sales start as early as 2018. The total Canadian cannabis industry is expected to be worth $22.6 billion.

Smart investors are taking note and buying up Canadian cannabis stocks in anticipation of the boom.

And the truth is that many of these cannabis companies don't need legalization to be profitable. They are already making major returns.

Our investing experts are used to seeing triple-digit returns.

But, with legalization just around the corner, the case for investing in Canadian cannabis is stronger than ever before.

And that brings us to the big question: How exactly do I get started with buying Canadian stocks?

The Wealth Daily team receives dozens of emails a week where readers request information about trading Canadian stocks.

And this is why we decided to put together this report to point investors who are interested in buying Canadian equities in the right direction.

Keep in mind that these methods could be used for buying any Canadian stocks, not just cannabis stocks.


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 its stock is no problem. But the percentage of Canadian companies that are actually listed on American exchanges is very low. If you want to trade Canadian stocks that don't have U.S. listings, you need to open an account with a new broker. If you do not wish to open an account with a broker, then there are several online trading sites available that allow you to purchase or sell stocks on a Canadian exchange.

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 easy­-to-use broker that a lot of readers like to go through, even though it's a bit pricey. Its commission is a hefty $19.95 per trade for U.S. stocks and $34.95 for a trade on the Canadian market. However, to offset this commission, PennTrade offers several sweet incentives that you should take into consideration when you are choosing an online broker. The brokerage firm has no extra charges for market orders, limit orders, large volume, small volume, or stocks under $1. Plus, every 10th trade is free.

PennTrade requires only $1,500 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 its website here.

Interactive Brokers

Interactive Brokers is another firm that readers like because it allows 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 C$0.01 per share trade, with a minimum commission of C$1 and a maximum commission of 0.5% of the trade value.

Check out some of the commission fees below:

Country Tier Commissions

Minimum per Order

Maximum per Order

US Flag

United States

 

  
All US$0.005 per share US$1 0.5% of trade value
Non-smart routed API orders <= 500 Shares US$0.013 per share US$1.30 0.5% of trade value
Non-smart routed API orders > 500 Shares US$0.008 per share US$1.30 0.5% of trade value
VWAP orders US$0.01 per share US$1 0.5% of trade value

Belgian Flag

Belgium

All 0.1% of trade value 4 euros 29 euros

 

French Flag

France

Euro-denominated 0.1% of trade value 4 euros 29 euros
U.S. dollar-denominated 0.1% of trade value US$5 US$42

German Flag

Germany

SWB 0.12% of trade value 6 euros None
FWB 0.1% of trade value 4 euros 99 euros
Xetra — ETFs 0.1% of trade value 4 euros 29 euros
Xetra — Stocks 0.1% of trade value 4 euros 99 euros

Netherlands Flag

Netherlands

Euro-denominated 0.1% of trade value 4 euros 29 euros
U.S. dollar-denominated 0.1% of trade value US$5 US$42

Swedish Flag

Sweden

All 0.1% of trade value 30 kronor 300 kronor

Swiss Flag

Switzerland

All 0.1% of trade value 10 Swiss francs None

UK Flag

United Kingdom

Up to 50,000 pounds
trade value
6 pounds 6 pounds 6 pounds
>50,000 pounds trade value 6 pounds + 0.05% of incremental trade value>50,000 pounds 6 pounds 29 pounds
LSE International Order Book U.S. dollar 0.05%
of trade value
US$5 None
Japanese Flag
Japan
All 0.10% of trade value

S$3

US$2.50

N/A

For a full list and more information 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 its website here.

Here is some information on two more brokers that will allow you to trade Canadian stocks, though I am less familiar with these companies:

CIBC Investor's Edge

CIBC charges $6.95 for trades placed online in U.S. or Canadian equities. There are different charges when you place a trade over the phone. Those charges vary based on the value of the stock. For more information on the different charges, click here.

The majority of mutual funds available through CIBC can be purchased without front­-end loads. As long as you keep $10,000 in your non­registered account, you won't have to pay any maintenance fees. The brokerage firm also provides a nifty commission calculator that you can access here.

For more information on CIBC Investor's Edge, check out its website here.

Questrade

Questrade replaced eNorthern in 2008. This site offers democratic pricing with commissions at $0.01 per share, a minimum of $4.95, and a maximum of $9.95. The minimum balance is $1,000. Be wary of any additional fees that may be tacked on. Questrade has fees for phone trades and partial fills, and data fees, SEC fees, and Exchange and ECN fees may apply. There is also a $5 flat per-day commission on any day you trade a U.S. dollar security in your RESP.

For more information on Questrade, check out its website here.

Other brokerages that readers have sent in include:

One Last Option

I know there are many people who still feel uncomfortable with trading stocks online and prefer to do it the old-fashioned way. If this sounds like something you're interested in, then I recommend that you go through our established contact, Mike Bruin.

Mike Bruin can help investors who want to buy Canadian stocks if they are struggling with an online exchange. You can reach him at mike.bruin@raymondjames.ca.

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 be sure to do your due diligence for finding the broker that fits your personal trading style.


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