# Canadians trading and investing in U.S stocks - what broker do you use?



## xTr1gger (Jul 17, 2013)

Hi all, new here and i was wondering what brokers you use. 

i'm looking to start up with $500 or $1000.00 and scottrade looks appealing however i don't know about international fees.... so if anyone has an idea of international fees on a canadian buying and selling u.s stock please inform me. 

was also thinking about a Direct purchase plan for a company i want to invest in... would this be a better option then using a broker?

thanks, Bee.

p.s - from my research TD seems too expensive, Questtrade seems iffy (but i'll wait to hear what you guys use) , and i can't find any info on international fees and or taxes on profits....


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## londoncalling (Sep 17, 2011)

Let me be the first to welcome you to the CMF family.

I use Questrade myself(no problems so far for the past couple years) as they have inexpensive rates for low volume traders/small portfolios as well as no currency exchange fees. I find it ridiculous to pay > $5 commission on a $1000 purchase. If you have any experience with online brokerages Questrade would be fine. If you need your hand held than it may be worth the $19.99 or more per trade. Are these purchases registered or not registered as there are different tax implications depending on where they are held

Cheers


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## liquidfinance (Jan 28, 2011)

No problems with Questrade myself and with the small sums you will initially investing you should keep the fees as low as possible. 

On $500 a $19.99 Trade will take 4% then you have the same fee to sell. You need an 8% return just to think about breaking even. 
I would try not to invest less than $1000 at a time. Although with Questrade you are only losing 1% on that $500 purchase. Questrade also off free purchases on any ETF products. I'm not sure if these are something you had looked at? For a small sum of money you can still get invested in the broader market.

15% withholding tax if the US stock pays a dividend. You must complete form W8-BEN. No tax in an RRSP but withholding tax is still taken from US Stock inside a TFSA


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## peterk (May 16, 2010)

I'm quite happy with Questrade.


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## the_apprentice (Jan 31, 2013)

I use Questrade mainly, but TD Waterhouse at times. I've had issues/questions with both and they've been resolved without any hassle. It basically comes down to the fees and the amount you have to invest, but in your situation I would definitely use Questrade.


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## humble_pie (Jun 7, 2009)

an investor starting out with $500-$1000 should perhaps not even go to a broker. Paying any commission whatsoever on a $1000 purchase is extravagant.

many beginner savers commence with TD e-series index funds. It's possible to buy these in small amounts.

will you be able to make regular contributions to your account? these will really be how it will grow. Let's hope the first $500-1k are the seed money here, for a lifetime of investing wisely!

since you are starting out, one might also inquire whether you have opened a tax-free savings account yet? it would be a logical place to put the new investments.


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## the_apprentice (Jan 31, 2013)

^ Yes to all of the above. +1. That's exactly how I started out, starting seeing profits with TD Mutual Funds and soon began investing larger amount in the stock market.


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## AltaRed (Jun 8, 2009)

humble_pie said:


> an investor starting out with $500-$1000 should perhaps not even go to a broker. Paying any commission whatsoever on a $1000 purchase is extravagant.
> 
> many beginner savers commence with TD e-series index funds. It's possible to buy these in small amounts.
> 
> ...


I agree with everything here. Forget a broker until at least the $25k level of investible assets. I'd take it to $50k before striking out with a discount broker. TD efunds work perfectly well for small(er) accounts.


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## jcgd (Oct 30, 2011)

I started with $10k in my questrade account. Enough for 5-8 stocks or so. I'm glad I didn't wait longer, I'd have a lot less money now. I try to get every cent into the market ASAP because retirement is so far out.


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## humble_pie (Jun 7, 2009)

jcgd said:


> I started with $10k in my questrade account. Enough for 5-8 stocks or so. I'm glad I didn't wait longer, I'd have a lot less money now. I try to get every cent into the market ASAP because retirement is so far out.




jc it's true that there are several talented young investors like yourself in cmf forum who have been able to start up with a few thousand $$ & they have parlayed this beginning into a significantly larger portf.

nevertheless we often suggest to new investors that they start with e-funds. Why?

1) capable beginner investors like yourself are relatively few; most need to graduate from at least moderate reading plus a few lessons from the school of hard knocks.

2) you absolutely cannot deny that the wind has been at your back these past 2 years. Suppose, instead, you had begun investing in mid 2007 with your hallmark 10k. How would you have felt 18 months later, with portf collapsed down to 5k or less?

it's this risk that the wind may *not* be at someone's back which cautions us old pharts to recommend to new investors that they tiptoe in extremely cautiously, while learning as they go. In fact, we often suggest that they commence, for a year or so, with e-funds or even HISAs. Because, if a james4beach kind of disaster scenario does unfold, at least they will still have the larger part of their original invested $1,000 intact.

3) this new OP doesn't have 10k the way you did, he says he's beginning with $500 or $1,000, yet he wants to "buy and sell" US stocks. I for one don't happen to believe that this can be done. A newbie could pay his broker FX to exchange his canadian $$ into US $$; then he could buy an odd lot of one stock (all of 58 or 63 shares, say). But if his haphazard choice tanks, then phffffftt all of his savings are going to disappear in one shot. What a wretched scenario.

4) there's a fine line between encouraging someone with one's own example of success & irresponsibly egging on an innocent party. If you look carefully at the OP's first post, you will see that he is not well prepared at all. He hasn't really read anything fundamental & he doesn't understand what can & what cannot be done with five hundred dollars.

therefore i feel that the first order of business is not to push this new investor into a brokerage account for which he's ill prepared, but rather to start him off with some good savings habits & hope that he will take the time to learn as he goes along.

btw jc you yourself have posted elsewhere about the awesome amount of investment-related reading that you do. But unfortunately in this thread you're not mentioning any of this. A novice might imagine from many messages upthread that financial planning & investing is as simple as go-to-broker-questrade-is-good-deposit-$1000-start-making-serious-money.

alas the truth is far from that.


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## xTr1gger (Jul 17, 2013)

Thanks for the welcome and all the replies
looks like i finally found a good forum where people know what they're talking about :encouragement::chuncky:

london - by registered and none registered do you mean RRSP's? 
i don't have an rrsp account quite yet but will get to that further down the road.

@ liquidfinance
Thanks, was having trouble trying to figure that out. needed it mainly to put it into my calculations of how much a certain stock would have to grow for it to be profitable 

@ humble_pie 
Whats your take on a Direct Purchase Plan (on an ADR that's traded on the NYE) through J.P morgan ? 
i want to invest between 500-1000 in one stock that cost roughly 20.00 a share.
from diligent research i expect it to raise a minimum of 10.00 / 50% by february and a possible maximum of 30.00 / 150 % increase.
However while staying idle the stock continues it's steady climb... and i've heard it could take weeks to months to finally setup an account... 


since the first investment is somewhat long term (6-9 months) would it be better to go with a Direct Purchase Plan and then after profits are made sign up for questrade ?

and yes, if the same stock doesn't shoot up to quick i will be putting in roughly about 10% of my monthly earnings toward that stock for up to another 3 months from now.(extra cash. not money that is needed for rent,bills,etc)

i looked up JPMorgan however can't find anything on their site about sign up fees or much else... info on it seems to be non-existant on other forums as well. 

Tax Free Savings account - wouldn't it be better to open one after being ready to sell for a profit?
if i open one now wouldn't that just be more monthly fees to pay minimizing the earnings from that stock?

TD mutual funds.... 
probably 99% of my knowledge is in commodities and U.S stocks....
idk. maybe td mutual funds will be something for the future but right now i have to invest in what i know. 

@ altared
"Forget a broker until at least the $25k level of investible assets. I'd take it to $50k"

the reality is i won't have that for quite some time. And i have to dip my toe in the poll somehow.
and everyone has to get started somewhere...
as for "striking out" it's not like I'm investing or trading in things i know nothing about. That's just stupid.

TD efunds ----- i'll start researching into this in the mean time.
thanks again all for your input


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## xTr1gger (Jul 17, 2013)

Thanks for the welcome and all the replies
looks like i finally found a good forum where people know what they're talking about :encouragement::chuncky:

london - by registered and none registered do you mean RRSP's? 
i don't have an rrsp account quite yet but will get to that further down the road.

@ liquidfinance
Thanks, was having trouble trying to figure that out. needed it mainly to put it into my calculations of how much a certain stock would have to grow for it to be profitable 

@ humble_pie 
Whats your take on a Direct Purchase Plan (on an ADR that's traded on the NYE) through J.P morgan ? 
i want to invest between 500-1000 in one stock that cost roughly 20.00 a share.
from diligent research i expect it to raise a minimum of 10.00 / 50% by february and a possible maximum of 30.00 / 150 % increase.
However while staying idle the stock continues it's steady climb... and i've heard it could take weeks to months to finally setup an account... 


since the first investment is somewhat long term (6-9 months) would it be better to go with a Direct Purchase Plan and then after profits are made sign up for questrade ?

and yes, if the same stock doesn't shoot up to quick i will be putting in roughly about 10% of my monthly earnings toward that stock for up to another 3 months from now.(extra cash. not money that is needed for rent,bills,etc)

i looked up JPMorgan however can't find anything on their site about sign up fees or much else... info on it seems to be non-existant on other forums as well. 

Tax Free Savings account - wouldn't it be better to open one after being ready to sell for a profit?
if i open one now wouldn't that just be more monthly fees to pay minimizing the earnings from that stock?

TD mutual funds.... 
probably 99% of my knowledge is in commodities and U.S stocks....
idk. maybe td mutual funds will be something for the future but right now i have to invest in what i know. 

@ altared
"Forget a broker until at least the $25k level of investible assets. I'd take it to $50k"

the reality is i won't have that for quite some time. And i have to dip my toe in the poll somehow.
and everyone has to get started somewhere...
as for "striking out" it's not like I'm investing or trading in things i know nothing about. That's just stupid.

TD efunds ----- i'll start researching into this in the mean time


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## xTr1gger (Jul 17, 2013)

humble_pie said:


> He hasn't really read anything fundamental & he doesn't understand what can & what cannot be done with five hundred dollars.


i have done lots of reading and am still learning new things everyday... have been successful in over 3 demo accounts in a row now making profits ranging from 5000.00 - 20,000.00 in each 
(9 months)


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## AltaRed (Jun 8, 2009)

xTr1gger said:


> i looked up JPMorgan however can't find anything on their site about sign up fees or much else... info on it seems to be non-existant on other forums as well.


I am not aware of any US domiciled broker who will accept accounts from Canadian residents, with possible exception of TD Ameritrade, and likely only if you have an account with TD Waterhouse in Canada. One exception: If you are employed by a Corporation that provides you with stock options or a stock savings plan that involves company stock on NYSE, then the brokers will handle those by special arrangement with the Corporation.

I further do not think any US domiciled broker like JP Morgan would consider accounts less than possibly $50k. JP Morgan is also a full service broker, not a discount broker. Their commissions will kill you on small purchases. You need to spend some time reading the various websites of brokers.


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## blin10 (Jun 27, 2011)

demo account is NOT real cash account, don't get it confused.... you can't do anything with 1k other then putting it in penny stocks and hope for the best (but odds are you will loose that money fairly quick)... dreaming can be dangerous, I know you might think you can turn this 1k into 10, you might, but odds are not in your favor



xTr1gger said:


> i have done lots of reading and am still learning new things everyday... have been successful in over 3 demo accounts in a row now making profits ranging from 5000.00 - 20,000.00 in each
> (9 months)


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## liquidfinance (Jan 28, 2011)

You can start with a brokerage with a small amount of money. $1000 with Questrade as I said before is only .5% of the value. This is an insignificant amount of money. 

Starting with a small amount is limited risk. You get to feel the way the market works and more importantly how your emotions start work as the market swings up and down. 

I started my brokerage account in the when I was in the UK. I knew nothing at the time and it was in fairness a gamble but I started with 500GBP the Brokerage was I believe 12.50GBP and the UK has a stamp duty of .5% imposed on all purchases of stock. So you are always .5% down regardless of investment size. The very same as starting off with $1000 in Questrade. 

You also don't need to invest it in a speculative penny stock. 10% return is 10% regardless of the purchase price and the number of shares purchased. 

NO you will not magic this money into $10k overnight but you will and can learn valuable lessons. There is no substitute for selecting your own stocks, so long as you understand the risks and are prepared to risk losing the investment. 

But speaking of penny stocks I got my $100 from ING today. Any good Uranium plays or anything as crazy which may be worth a punt with this free money :biggrin:


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## xTr1gger (Jul 17, 2013)

AltaRed said:


> I am not aware of any US domiciled broker who will accept accounts from Canadian residents, with possible exception of TD Ameritrade, and likely only if you have an account with TD Waterhouse in Canada. One exception: If you are employed by a Corporation that provides you with stock options or a stock savings plan that involves company stock on NYSE, then the brokers will handle those by special arrangement with the Corporation.
> 
> I further do not think any US domiciled broker like JP Morgan would consider accounts less than possibly $50k. JP Morgan is also a full service broker, not a discount broker. Their commissions will kill you on small purchases. You need to spend some time reading the various websites of brokers.



so what your saying is in a direct purchase plan of buying 1 specific stock, they will sign you up for using them as a broker automatically?

"US and Canadian residents can purchase ???????? ADRs through a brokerdealer or through a Direct Purchase Plan (the "Plan"). The Plan is sponsored and administered by ???????????, JP Morgan Chase. The Plan registration is open to U.S. and Canadian residents only "
^ accepts canadians....

i've spent more time reading up on web brokers then you could imagine... already ruled out handful's of brokers , narrowed it down to 5. and now 2. 
scottrade, questtrade, interactive brokers, TD waterhouse, Thinkorswim, Tradeking, E-trade, Charles Scwab, QuestXpress, Fidelity, Virtual Brokers, Qtrade, ShareOwner, Optionshouse, 
probably forgetting some but i have done more then enough research on these brokers.
thats why i'm asking questions now in this forum is to get the answer i couldn't obtain through said research.


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## xTr1gger (Jul 17, 2013)

blin10 said:


> demo account is NOT real cash account, don't get it confused.... you can't do anything with 1k other then putting it in penny stocks and hope for the best (but odds are you will loose that money fairly quick)... dreaming can be dangerous, I know you might think you can turn this 1k into 10, you might, but odds are not in your favor


ya don't say ?
it's not real money? 
in the 9 months of using it i thought they just give you free cash and you don't have to pay it back and can withdraw it whenever you want 

and yes i know penny stocks are risky, that's probably why i'm not investing in them and never will. my initial investment is going to be on a stock that is $20.00 + . not 0.20.


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## xTr1gger (Jul 17, 2013)

liquidfinance said:


> You can start with a brokerage with a small amount of money. $1000 with Questrade as I said before is only .5% of the value. This is an insignificant amount of money.
> 
> Starting with a small amount is limited risk. You get to feel the way the market works and more importantly how your emotions start work as the market swings up and down.
> 
> ...


perfect! 
glad to see that YOU understand i'm just trying to dip my toe in the pool ^_^ 
how well did you do when you started your brokerage account in the U.K? 
let me be the first to congratulate you on a pennystock success! i hear more often then not that the companies usually go belly up.
quick question for questtrade users - 

The 95¢ stock trade

The Questrade Advantage™ is our active trader program for everyone. Register for an advanced market data plan, and you get:

Stock trades are
1¢ per share (min 95¢ / max $6.95)
OR
$4.95 flat per trade
$6.95 option trades plus 75¢ per contract
Buy ETFs for free

The $4.95 stock trade

Democratic pricing. No matter how much you trade or the size of your portfolio, you get great rates and lots of freebies.

Stock trades are 1¢ per share
(min $4.95 / max $9.95)
$9.95 option trades plus $1 per contract
Buy ETFs for free


i will have to go with the 4.95 flatrate option, but why does the other require you to buy a minimum of 495 shares?

have no ideal thinking of turning a 1000% profit overnight lol 
i'm a realist that knows most of the risks.

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so to all those who automatically assume i'm thinking of getting rich quick that is not the case. 
there is no short cut to becoming filthy rich without there being consequence's.


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## AltaRed (Jun 8, 2009)

xTr1gger said:


> so what your saying is in a direct purchase plan of buying 1 specific stock, they will sign you up for using them as a broker automatically?
> 
> "US and Canadian residents can purchase ???????? ADRs through a brokerdealer or through a Direct Purchase Plan (the "Plan"). The Plan is sponsored and administered by ???????????, JP Morgan Chase. The Plan registration is open to U.S. and Canadian residents only "
> ^ accepts canadians....


I am not familiar with the example you are quoting but it sounds to me that publicly listed Corporation X has an arrangement with JPM whereby you can buy their shares/ADRs directly via JPM. That might work for X but what value is that JPM account to you if you want to purchase other stock? Also, do you know what the commissions/transaction fees would be? You need to ask those specific questions of JPM.

When I was in the employ of a multi-national (ABC), I had stock options that were handled by a specific US broker. I could exercise those options, and/or sell ABC's stock but I could not hold (buy or sell) any other equities in that account. They were a full service broker with a negotiated 'discount' (with Company ABC) on their sales commissions specifically for this stock.

I really do not know why you would even consider going to that trouble unless there is big $$$ in it for you longer term.


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