# Why to use TDW when you can buy ETFs are free on questrade



## gladaki (Feb 23, 2014)

As title says
Why to use TDW when you can buy ETFs are free on questrade?

Can some one tell me answer to this question, It will be similar to TD eseries then but far more lower MER


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## Woz (Sep 5, 2013)

Questrade’s lower price, TDW is better service.

Between the two I’d go with Questrade, but I get that some people like having brick and mortar locations, like keeping all their products with one bank, like that they can link their $USD brokerage accounts with $USD bank accounts, have gotten use to the TDW interface, like that TD is larger and more reputable, etc.

I don’t think that TDW is ever going to be the lowest cost option, that’s not the market they’re competing for, so it’s whether you think the services is worth the fee.

Also, Questrade’s still cheap, but ETFs aren’t entirely free. You still pay ECN fees (~$0.004/share) on ETFs and you still pay the regular commission when you sell.


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## none (Jan 15, 2013)

And the TD e-series is SO convenient and easy. Once you factor in trade fees many of the TD e-series are so close in price that it's really a toss up and just noise.

Also, I kind of like the delay in the sell of e-series (a day or two). It helps me from trying to time the market which my brain knows is stupid but my GUT really thinks it knows stuff. My gut is an idiot.


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## humble_pie (Jun 7, 2009)

me i have my usual rant which goes that we know nothing about the capitalization of any of the privately-held brokers. We don't know anything about their banking relationship(s). All we know is that they meet the minimum cap requirements of the various exchanges.

so? in a global financial meltdown, the small firms will be the first to go under imho.

so? then we'd be protected by the CIPF up to $1M, you're saying? alas, not so, the CIPF will not function in global armageddon. It's not really a fund, it's just an agreement across the brokerage industry that they'll all pay special assessments to bail our an odd member here or there who happens to go bankrupt. But in global collapse, there'll be no CIPF.

something that concerns me a bit with questrade is that they offer only margin accounts. There are no cash accounts other than registered accounts. The widespread marginality causes me to wonder what kind of wholesale stock lending business is being run on the backside of that aggregate margin from clients. Just a skeptical thought.

there's one owner of Questrade. Sometimes i've wondered why he doesn't hold a partial IPO. Books have to be opened up wide & deep for IPOs in canada, so the revelations would assuage his doubters & calm concerns a.cross the board. He'd also obtain price confirmation for the rest of his Questrade wealth, which he'd continue to hold privately, assuming he'd only IPO 10% or 20% of the company.

but he doesn't do this. Is there something to hide?


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## larry81 (Nov 22, 2010)

TDDI has better service.
I also like to have all my $$$ with the same institution (TDCT & TDDI)
Since i rarely trade, the cost is minimal anyway.

For someone with <100k, Questrade is the way to go but I would not trust Questrade with my portfolio.


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## 1980z28 (Mar 4, 2010)

I personally enjoy SDTDW,it is a personal like as only trade maybe 60 times a year,a little more this year as I sold my fts a while ago


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## gardner (Feb 13, 2014)

Most of the trades I do are on individual stocks, not ETFs. I hold ETFs for sure, and in larger quantities, but it's the stocks that generate the trades. I don't see cheaper ETF trades being a factor for me. At least now with $10 trades -- when it was $30, maybe -- was that only a year ago?
I also do other banking at TD, so there is the convenience of simple account transfers. I used to have a separate etrade/itrade account from my TDDI one. I would not go back to that situation.


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## james4beach (Nov 15, 2012)

I echo humble_pie's concerns. And right, CIPF is *not* like CDIC (and notably, CIPF is not a government guarantee). They have a limited fund and they can really drag their feet paying out claims. Just look at their annual reports to see evidence of that.

Despite being a highly leveraged bank, and despite all their $6 trillion in derivative exposures, TD is still ... at the end of the day ... a relatively transparent, public corporation with well established procedures and disclosure/governance processes.

Plus they're a too-big-to-fail bank. To store your family's wealth, I think you want to go with TBTF.


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## the_apprentice (Jan 31, 2013)

I use both TD and Questrade.

TD's fees used to be much higher, $30 per trade vs $10 per trade now. I've been slowly shifting my portfolio to TDW because of this, also my portfolio is growing. I like that TD allows me to transfer from my chequing, savings, and tfsa instantly, whereas a transfer to Questrade takes days. I will gladly pay more to have my portfolio secured in a big bank as others have mentioned above. I rarely trade etfs, but that is definitely a competitive feature of Questrade.


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## My Own Advisor (Sep 24, 2012)

I think there is a benefit of using a "big bank" brokerage, not that there is anything odd or wrong with Questrade. 

Cheaper ETFs are not the only factor. There is the ability to DRIP stocks, transfer money within the same institution, and get some better service for other financial products if you are under one big bank financial roof. 

The way I see it, one transaction is what, $6.95-$10 at the "big bank"? A happy meal almost costs that much! It's not that expensive if you are only buying a few times per year. Just like you should eat at McD's...only a few times per year


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## Butters (Apr 20, 2012)

I thought if you held a stock, its under your name... so if questrade goes under, that stock is still under your name

Their cash account is their margin account, just dont go into the red.... you can't just open up a margin account with no money.... whats their limit 25 or 30% of your other holdings you can go in debt


Questrade is definitely awesome for any little guy.. their service to me has been awesome!

Like one said, it costs 0.0035 per share to buy an etf ... and 1 cent per share to sell 4.95(min) 9.95(max)
so if you were a millionaire, it might cost more to actually buy and sell with questrade

I also liked none's reply... for all the hassel just put it on TD E-series auto pilot.... done!


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## Woz (Sep 5, 2013)

Shares held in a cash account are held in trust in your name, so barring some shady business they should still be there for you even if your brokerage went under. This isn't the case for margin accounts. In a margin account they can lend out your shares without your permission.

*Edit:* All shares held in a margin account need to be held in street name, but just because shares are in a cash account doesn't necessarily mean they're not also in street name.


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## jerryhung (Mar 28, 2011)

I use TDW because I have everything with TD - bank accounts, CC, LOC, TDW

I am authorized user on other's TD accounts too so I can trade FOR them (just cannot withdraw money FOR them, ha) << this makes things so easy, managing 4 TDW accounts at once
Having TDW President account status also helps

As for ETF, TD e-series is perfect answer for that, I buy $100 weekly on TDB900/902/911 under SIP, don't have to time it


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## Moneytoo (Mar 26, 2014)

My husband and I moved our RRSP accounts from TDW (aka TD DI) to Questrade last summer - and never looked back. Don't have margin accounts, but have TFSAs at Questrade, too. Total in all 4 accounts is about 300K.

What I like about Questrade (in addition to free ETF purchases - and they ARE free if you buy in 100's and use limit orders; and no ECN fees on USD ETFs, so I do my own DRIPs - buying 1-2 shares with accumulated dividends whenever I want) are two things: 

1) The Authorized Trader feature (that lets me place orders for my husband's accounts and check his balances and activities from my account - at TD I had to login with his info)
2) Support via Online chat and e-mails (hate talking on the phone, so don't miss TDW's 24/7 phone support - especially after they introduced the voice recognition system that could never understand me or my husband, so we had to repeat "I'm not enrolled!" like idiots before it woukd let us through to talk to a representative)

Also, I read that after TDW finally introduced USD in RRSPs (one of the main reasons we moved - because they didn't have it), the Norbert's Gambit became even more expensive there as you have to call in to journal over DLR and pay $45 commission. So if at some point in the future we decide to move our accounts back to a bank, I'll check out Scotia iTrade first (had our mortgage with Scotiabank, still have a chequing account and unused HELOC there)


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## james4beach (Nov 15, 2012)

I think all shares held in brokerages are held in "street name" which means in the broker's name - NOT your name. This is a necessity for the convenience of trading the shares and electronic record keeping.

Generally this is not a problem, as long as the brokerage has an aggregate total of all the shares they should have across all customer accounts. And they usually do, within a relatively small +/- deviation. If the broker were to collapse, the shares are still there even though they are in the broker's name. This doesn't cost the CIPF anything at all... because nothing is lost.

That's the normal scenario, and the harmless one.

Problems can arise, however, in two scenarios:

1) Heavy use of margin and lending of shares. By employing margin you are agreeing to allow the broker to lend away shares from your account. Brokers can engage in significant lending where shares leave the brokerage, leaving them with a deficiency of shares. If the broker goes insolvent while they have a share deficiency, and you're employing margin, you're in big trouble: your shares don't exist. Sticking to cash only accounts is a way to mitigate this risk. There are even more complex shenanigans that margin allows a broker to engage in. Read up the story of Opes Prime, an Australian brokerage, to hear a horror story.

2) Broker fraud (example: Refco). This is a bad one. In this scenario, the brokerage was negligent about having a pool of shares/assets to match to individual accounts. This leaves a deficiency of shares, and in case of insolvency, the shares don't exist. I think we're less likely to encounter fraud with a big bank brokerages.

Therefore I think that a cash-only account at a big brokerage is a good way to mitigate both (1) and (2) risks. Having a margin account at a small or private brokerage, on the other hand, gives you maximum exposure to both risks.

Fraudulent brokerages, and brokerage collapses, do happen with alarming regularity. And newsflash: often, assets disappear from client accounts. That's kind of the whole idea here. They don't make money just by holding assets in your name; that would be too boring.


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## humble_pie (Jun 7, 2009)

Moneytoo said:


> I read that after TDW finally introduced USD in RRSPs (one of the main reasons we moved - because they didn't have it), the Norbert's Gambit became even more expensive there as you have to call in to journal over DLR and pay $45 commission




gosh, this is not true at all! you could *not* have read this fiction here in cmf forum, where the issue was explored accurately & in depth by many cmffers.

TD clients who are arbitraging currencies via the DLRs can phone to have their DLR purchase journalled to opposite currency after settlement at no charge. Journals are free at the big green.

a commission only applies when a TD client wants to sell his gambit stock in the new currency at the very same instant that he buys. Like almost every other broker including Questrade, the online web order platform will not accept an instant gambit sell order. Gambit clients who wish to sell instantly have to place a phone order with a licensed representative. This is as true for questrade as it is for the big green.

as is well-known by now, the only 2 brokers whose web order platforms permit instant gambit selling are BMO & roybank.

most brokers are charging full agent-handled commissions for gambit sell orders that are phoned in. But at the big green, a curiously ambivalent politic prevails. Some of the licensed reps are charging a full agent-handled commission (this is not $45, btw, which is another inaccuracy that should not be repeated.)

but some of the TD reps are charging only a web commission for the sell side of a gambit order.

which agent will charge what commission appears to be random. Evidently some clients are sounding out agents, then upon finding out that the agent who answered their phone call intends to charge a full commission, these clients are politely declining to place the sell order & they are saying ciao! presumably such clients then re-dial & try again with somebody else.

larry81 had the best suggestion on here when he said Obtain the name & phone extension of an agent who charges web commish for gambit sells, then next time ask for the same agent.

meanwhile, at Questrade i believe that any client who phones for an instant gambit sell will be charged a full agent-handled commission that may be even higher than the TD? it's my belief that chez Questrade there's no chance of a cheap web commission for a phoned instant gambit sell-side order? 

at least at the big green there's a sporting chance of reaching a kindly agent. Clients can also roll the dice - ie phone - as many times as they want. Q: how many times would you re-dial, in order to obtain that cheap web commission for an instant gambit sell order? cmffers are famous for their persistence when pursuing bargains ...


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> I think all shares held in brokerages are held in "street name" which means in the broker's name - NOT your name. This is a necessity for the convenience of trading the shares and electronic record keeping.


That's my understanding as well.


Generally this is not a problem, as long as the brokerage has an aggregate total of all the shares they should have across all customer accounts. And they usually do, within a relatively small +/- deviation. If the broker were to collapse, the shares are still there even though they are in the broker's name. This doesn't cost the CIPF anything at all... because nothing is lost.

That's the normal scenario, and the harmless one.

Problems can arise, however, in two scenarios:



james4beach said:


> ... 1) Heavy use of margin and lending of shares. By employing margin you are agreeing to allow the broker to lend away shares from your account...


That's where Questrade become fuzzy for me ... as I understand, use may not matter as when I check Questrade's web site, the only taxable account I can see if the margin one. Posts about margin at other brokers have referred to a separate application and when setup, a separate account number.

The question is ... does this mean that a taxable account at Questrade means the shares can be loaned out?
If so, this would appear to be a double risk ... the first is what you have listed. The second is that all taxable accounts appear to fix this profile.


Cheers


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## Moneytoo (Mar 26, 2014)

humble_pie said:


> gosh, this is not true at all! you could *not* have read this fiction here in cmf forum, where the issue was explored accurately & in depth by many cmffers.
> 
> ...
> 
> Some of the licensed reps are charging a full agent-handled commission (this is not $45, btw, which is another inaccuracy that should not be repeated.)


I read about it on RFD and this very confusing TD thread where TD's own rep couldn't give a straight answer one way or another for a few month, but "*min. $43 phone commission applies*" was repeated a few times:

"1. Buy any inter-listed stock that trades on the TSX: Example, TD Bank (TD) in the Canadian RSP account. You will pay the lower commission for this transaction ($9.99). 2. The same day, you will need to call TD DI and ask a Representative to Journal the TD shares to the USD RSP account, sell the TD Shares on the NYSE within the USD RSP account. Client will pay the regular telephone brokerage commission for this transaction (minimum $43 please refer to telephone brokerage services equity commission schedule available here: http://www.tdwaterhouse.ca/products-services/inves...) 3. You will end up converting his Canadian Dollars from the Canadian RSP account to the USD RSP account at Par."

I'm sorry that I didn't bother to keep checking for the way to get around it after that (as I'm no longer a TDW client ) 



humble_pie said:


> which agent will charge what commission appears to be random. Evidently some clients are sounding out agents, then upon finding out that the agent who answered their phone call intends to charge a full commission, these clients are politely declining to place the sell order & they are saying ciao! presumably such clients then re-dial & try again with somebody else.
> 
> larry81 had the best suggestion on here when he said Obtain the name & phone extension of an agent who charges web commish for gambit sells, then next time ask for the same agent.


Aha, sounds like a great service for someone like me who hates to call in the first place lol But sure, I can retract my previous post as inaccurate 



humble_pie said:


> meanwhile, at Questrade i believe that any client who phones for an instant gambit sell will be charged a full agent-handled commission that may be even higher than the TD? it's my belief that chez Questrade there's no chance of a cheap web commission for a phoned instant gambit sell-side order?


Never called in, so wouldn't know - I just send an e-mail after buying DLR, asking them to journal shares over to DLR.U, and sometimes it takes a day, sometimes three, I'm not in a rush (DLR.U doesn't fluctuate that much - and I never need USD right away to buy something else) 



humble_pie said:


> Q: how many times would you re-dial, in order to obtain that cheap web commission for an instant gambit sell order? *cmffers are famous for their persistence when pursuing bargains* ...


I don't care about instant sell order, and *prefer to pay less than $10* for 1) Buy DLR 2) Sell DLR.U 3) Buy VTI without ever having to call in. Only second transaction (Sell DLR.U) is commissionabe at Questrade (I usually convert 700-1000 shares). And, if I remember correctly, even without phone commissions, these three transactions would cost $9.99 X 3 = $29.97 at TDW


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## none (Jan 15, 2013)

Moneytoo said:


> Aha, sounds like a great service for someone like me who hates to call in the first place lol But sure, I can retract my previous post as inaccurate


At least we can count on you being consistent. You have that going for you.


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## humble_pie (Jun 7, 2009)

Eclectic12 said:


> The question is ... does this mean that a taxable account at Questrade means the shares can be loaned out?
> If so, this would appear to be a double risk ... the first is what you have listed. The second is that all taxable accounts at Questrade] appear to fix this profile



this is what i was trying to get at. It's been said - by reliable long-time Questrade clients - that all non-registered accounts at questrade are margin accounts. This means that in most cases, the broker can borrow shares from these accounts.

unlike the big bank brokers, questrade does not offer cash accounts.

i'm just wondering out loud, Why the insistence on margin accounts? Would it be possible to run a wholesale institutional stock lending business on the aggregated backsides of those retail accounts?

the reason why forex trading is mostly commission-free or ultra-low-commisson for small clients is because the big institutional currency players need the small fry to soak up the other sides of their trades. Same idea could be working with respect to questrade's margin accounts.

after all, even a stuffy bank-owned broker is going to borrow from a client's margin account, at least some of the time. What's to stop a small, nimble, privately-owned brokerage from doing the same, albeit on a more ambitious scale.


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## Eclectic12 (Oct 20, 2010)

^^^^

Using all accounts for lending is the only reason I can think of to force everyone to be opening a combined "margin/regular" account.



Cheers


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## Moneytoo (Mar 26, 2014)

none said:


> At least we can count on you being consistent. You have that going for you.


Oh well, you know, my stupid GUT tells me I need to check all the old threads on all the forums before saying anything here, but my smartass BUTT is too lazy 

Btw, how's buying VTI for $108+ and then seeing it dipping under $106 in a few weeks going for you and your faith in efficient-market hypothesis?


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## humble_pie (Jun 7, 2009)

Moneytoo said:


> I just send an e-mail [to Questrade] after buying DLR, asking them to journal shares over to DLR.U, and sometimes it takes a day, sometimes three, I'm not in a rush (DLR.U doesn't fluctuate that much - and I never need USD right away to buy something else)
> 
> I don't care about instant sell order ... nd, if I remember correctly, even without phone commissions, these three transactions would cost $9.99 X 3 = $29.97 at TDW




most folks are in a rush though, because they've already identified the stock they want to buy in the other currency.

fast gambit traders don't use the DLRs because why pay spread fee to horizons betaPro? instead they use real stocks.

also - this has been pointed out many times - the DLRs only work from CAD to USD, they don't work very well in reverse. Only DLR.U is pegged, therefore the currency arbitrageur going from DLR.U to DLR is exposed to currency fluctuation for all of the days that it takes the broker to settle & journal the trade.

i believe you're right about commissions for the triple trade with 2 DLRs & 1 ETF, though. The trio is much cheaper at Questrade, as you say.

but are you truly happy when this broker borrows up a storm of your stocks because you signed a margin application form without realizing what they might be able to get up to?

may i put that another way? it's-wednesday-april-15-2015-at-12h10-so-do-you-know-where-your-stocks-are-or-what-they're-doing-right-this-moment?

margin stocks can wander farther than teenagers :tongue-new:


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## none (Jan 15, 2013)

It's currently 109.38 and I'm 20 years from selling it AND 90% of the VTI that I own I purchased at $80 when the CAD$ was par so I'm feeling pretty good actually. 

If you are worried about a 1.5% difference that is by far a greater (and poorer) reflection on you rather than me. Just sayin'


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## Moneytoo (Mar 26, 2014)

humble_pie said:


> but are you truly happy when this broker borrows up a storm of your stocks because you signed a margin application form without realizing what they might be able to get up to?
> 
> may i put that another way? it's-wednesday-april-15-2015-at-12h10-so-do-you-know-where-your-stocks-are-or-what-they're-doing-right-this-moment?
> 
> margin stocks can wander farther than teenagers :tongue-new:


Don't have a margin account  (And, thanks to your warnings, will not open one - or at least not at Questrade )


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## Moneytoo (Mar 26, 2014)

none said:


> If you are worried about a 1.5% difference that is by far a greater (and poorer) reflection on you rather than me. Just sayin'


My limit order for 900 shares of DLR finally went through today (didn't want to buy it while CAD was below 80 cents - despite of what the Couch Potato disciples "just sayin'" - and, since my smart brain got familiar with the basics of charts and technical analysis, so far it usually pays off to wait a bit )


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## none (Jan 15, 2013)

I find it amusing when people take credit when things go their way when playing in noise. 

Anyway, that's great - I'm glad it's working for you. Should have waited for CAD$ to be 0.81 though. Next time right?

All tech analysis that I've read is that passive investing and not market timing maximized the probability of ending your run with the most money. Of course, people make money in Vegas too (most don't)


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## humble_pie (Jun 7, 2009)

Moneytoo said:


> Don't have a margin account  (And, thanks to your warnings, will not open one - or at least not at Questrade )



och tis a canny lassie
may the guid spirit attend thee
_beannachd Dhé leat_


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## umlowcn (Mar 29, 2015)

jerryhung said:


> I use TDW because I have everything with TD - bank accounts, CC, LOC, TDW
> 
> I am authorized user on other's TD accounts too so I can trade FOR them (just cannot withdraw money FOR them, ha) << this makes things so easy, managing 4 TDW accounts at once
> Having TDW President account status also helps
> ...


Do you allocate TDB900/902/911 across your 4 TDW accounts? Or each accounts has TDB900/902/911? Thanks.


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## Toronto.gal (Jan 8, 2010)

Eclectic12 said:


> Using all accounts for lending is the only reason I can think of to force everyone to be opening *a combined "margin/regular" account*.


I know what you're saying here, and not trying to split hairs, but just for clarity, you can't have 'a combined' account, it's either cash or margin [with brokers that give the option, that is]. 

Mine had been cash until I added option trading. And btw, even if you only use covered strategies [own the underlying stock], it still will require a margin account, at least with my broker.


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## Moneytoo (Mar 26, 2014)

none said:


> Anyway, that's great - I'm glad it's working for you.


Hey, I'm not the one who keeps bringing up her brain vs. gut discord - thought that maybe you're looking for ways to help them understand each other (mine do, and I consider both of them smart - although not as smart as my butt lol)


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## Moneytoo (Mar 26, 2014)

humble_pie said:


> och tis a canny lassie
> may the guid spirit attend thee
> _beannachd Dhé leat_


Thank you, HP!  What's up with the avatar? The embroidery season is over, time to go places?


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## none (Jan 15, 2013)

It is exceptionally easy for people to confuse good intuition with wishful thinking and the randomness of stock price movements can reinforce this when things randomly go ones way. It's a hard lesson to learn but most come around eventually.

I do my best to ride the signal (the drift part of the random walk) and ignore the noise (the random walk part).


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## Moneytoo (Mar 26, 2014)

Omg, keep talking, it's fascinating, we're learning so much from your wisdom! 

Me & Your Gut


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## larry81 (Nov 22, 2010)

humble_pie said:


> larry81 had the best suggestion on here when he said Obtain the name & phone extension of an agent who charges web commish for gambit sells, then next time ask for the same agent.


thanks you, thanks you 

I have a list of 4-5 regular buddies who perform flawless instant gambit. I have performed a few 6 figures gambit, executed in about 30 sec, at web commish... There is really only three things to look for in a gambit buddy:

1. Already know what a gambit is
2. Native english speaker (or your own language)
3. Willing to perform the sell operation at the web commish rate

My best gambit-buddy even do the buy operation on my behalf, at web commission rate of course


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## GreatLaker (Mar 23, 2014)

larry81 said:


> I have a list of 4-5 regular buddies who perform flawless instant gambit.


With my average of 8 trades / yr, it would be hard for me to have any gambit buddies. :smilet-digitalpoint
And that includes moving money from another broker, so in the future my trade count should be less.
So not really sure if I am a good gambit candidate... might try it some day.

Considering my low volume of trades, the convenience of keeping my bank and broker with the same colour financial institution (comfortable green chairs in my case) means more to me than the savings from free ETF trades.


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## jerryhung (Mar 28, 2011)

umlowcn said:


> Do you allocate TDB900/902/911 across your 4 TDW accounts? Or each accounts has TDB900/902/911? Thanks.


Just in 1 account, the regular CAD margin. SIP with Cash distribution (no DRIP)
I figure it's really the same. Other accounts I use for trades or individual stocks

It gets tricky with 3-4 accounts, don't know where to put what... tax vs. tax-shelter/TFSA/RRSP and etc.. 
Sometimes I wishes all the money is in 1 account only


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## Eclectic12 (Oct 20, 2010)

Toronto.gal said:


> I know what you're saying here, and not trying to split hairs, but just for clarity, you can't have 'a combined' account, it's either cash or margin [with brokers that give the option, that is].


I'd have thought so too ... but when looking at Questrade's web site under "Account Types", the list is *Margin*, TFSA and Registered, FX and CFS or Wealth Management.

Under Margin, they say:


> Our most popular account type, the margin account is the gateway to the North American equities markets, ...


There is no place I can find on their web site that says one can setup a cash only taxable account.


Add in that various Questrade customers that have posted on CMF have said it's a combined account (i.e. margin/cash) where a late transfer means their stock purchase has incurred margin interest costs ... it seem clear it is a combined account. It makes no sense to me that Questrade would offer a separate cash account yet have no mention of it in their account types.


The discount broker web sites are also a stark contrast to this as ...
BMO web site -> Cash or Margin.
TDDI web site -> Cash or Margin.
Scotia iTrade web site -> Cash or Margin.
RBCDI web site -> Cash or Margin.
CIBC Investors Edge web site -> Cash, Margin or Options.
National Bank Brokerage web site -> Cash, Margin, Margin with short selling, Quebec Stock Savings Plan, Income, COD
QTrade web site -> Cash or Margin.


If a Questrade customer says something different ... then I'll revise my thinking but what info I have says it's a combined acounnt.




Toronto.gal said:


> Mine had been cash until I added option trading...


 ... whereas my broker issued separate account numbers for the margin accounts (CAD and USD).

At the of the day though ... the point is that Questrade listing their only taxable account type as margin is definitely different than just about everyone else.


Cheers


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## Moneytoo (Mar 26, 2014)

There's a promotion at Scotia iTrade (saw it on RFD forum):

new and existing clients up to $500 and 500 free trades till May 31st if you visit 3 branches in Toronto

INVEST	RECEIVE
$15,000 - $49,999	$75 Cash AND 75 Free Trades
$50,000 - $99,999	$125 Cash AND 125 Free Trades
$100,000 - $249,999	$250 Cash AND 250 Free Trades
$250,000+	$500 Cash AND 500 Free Trades

a new account by May 17, 2015 and choose either up to 500 free trades or $500 cash everywhere else (but - Free trades are good for 180 days)

INVEST	RECEIVE
$15,000 - $99,999	100 Free Trades OR $50 Cash
$100,000 - $499,999	250 Free Trades OR $250 Cash
$500,000+	500 Free Trades OR $500 Cash

They also have free ETFs for buy AND sell (unlike Questrade, which charges on the sell):
http://www.scotiabank.com/itrade/en/0,,4200,00.html

(We don't own any of those ETFs in our current Questrade portfolio other than DLR when we do currency conversions, but might be a good idea for a non-registered account - will see how much extra cash we'll have in May, one of the "featured" Toronto branches is near my husband's work and not far from mine )


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## umlowcn (Mar 29, 2015)

jerryhung said:


> Just in 1 account, the regular CAD margin. SIP with Cash distribution (no DRIP)
> I figure it's really the same. Other accounts I use for trades or individual stocks
> 
> It gets tricky with 3-4 accounts, don't know where to put what... tax vs. tax-shelter/TFSA/RRSP and etc..
> Sometimes I wishes all the money is in 1 account only



I agree. I have LIRA, RRSP, and TFSA in TDW. I was thinking to allocate TDB900/902/911 in each of them, easier for re-balancing as well.

I can also split it into something like TBD900 in LIRA, TDB902 in RRSP and TDB911 in TFSA, might not be able to re-balance as I cannot move the funds around the registered accounts.


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## none (Jan 15, 2013)

It's really not that hard.

REIT / Bonds in TFSA

Foreign in RRSP

Can stuff in non-reg.


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## Eclectic12 (Oct 20, 2010)

^^^^

As I'm comfortable with the bookkeeping/tax reporting for the REIT, I tend to put the high "other income" REITs such as RioCan into the TFSA and keep the 70% to 100% RoC REITs in a taxable account. This maximizes the CG tax where there is minimal other tax.


If it's a choice between not using the TFSA and using the TFSA, I don't care what is going into the TFSA.


To each their own ...



Cheers


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## CPA Candidate (Dec 15, 2013)

What would a CMF thread be without ridiculous bank/brokerage fear mongering.

Use TD if you like paying more than necessary.


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## james4beach (Nov 15, 2012)

CPA Candidate, have you ever heard of: Lehman Brothers, Bear Stearns, Opes Prime, Refco, MF Global, or PFGBest?

All of those brokerages collapsed within the last 7 years, the most recent being 2012.

This is hardly a rare event, so it's reasonable to believe that a Canadian brokerage could collapse too.


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## humble_pie (Jun 7, 2009)

Moneytoo said:


> There's a promotion at Scotia iTrade (saw it on RFD forum):
> 
> new and existing clients up to $500 and 500 free trades till May 31st if you visit 3 branches in Toronto




my goodness. They are all bribing clients like crazy.
,
could you use an extra $1000? do you happen to have 500k in cash or securities that you could transfer to BMO?

reward payback is one grand.

if alas spare cash/moveable assets are below the half-million dollar bar, BMO still has other treats in store for you.

i believe one has to keep the booty at the big blue for 6 months. As i recall there's a nasty term & condition. Any withdrawal below the net initial contribution amount during the 6-month period will forfeit the entire payback reward.

i once asked them Why can't clients withdraw at least the new dividend & interest income that accrues to the account during the 6-month period without penalty?

they were merciless. Any net withdrawal = no reward, they said.

https://www.bmo.com/self-directed/special-offers/high-net-worth


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## humble_pie (Jun 7, 2009)

CPA Candidate said:


> What would a CMF thread be without ridiculous bank/brokerage fear mongering



asking why questrade offers nothing but margin & registered accounts is reasonable & intelligent curiosity imho

the question remains, what is this broker doing with the margined stocks they are able to harvest from the clients?


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## 0xCC (Jan 5, 2012)

humble_pie said:


> my goodness. They are all bribing clients like crazy.
> ,
> could you use an extra $1000? do you happen to have 500k in cash or securities that you could transfer to BMO?
> 
> ...


Any TDW client want to try calling into TDW to see what they will offer to stay instead of jumping over to BMO? The $1000 on $500k isn't that great though from a percentage perspective. Much less than the PCF or Tangerine special offers (and even though those offers are only for cash they hold the cash for less time).


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## Fain (Oct 11, 2009)

humble_pie said:


> me i have my usual rant which goes that we know nothing about the capitalization of any of the privately-held brokers. We don't know anything about their banking relationship(s). All we know is that they meet the minimum cap requirements of the various exchanges.
> 
> so? in a global financial meltdown, the small firms will be the first to go under imho.
> 
> ...


Securities that are fully paid for can't be loaned out. No matter if it's a margin account. The only exception is that if there is a written agreement between the client and the brokerage.


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## none (Jan 15, 2013)

Moneytoo said:


> My limit order for 900 shares of DLR finally went through today (didn't want to buy it while CAD was below 80 cents - despite of what the Couch Potato disciples "just sayin'" - and, since my smart brain got familiar with the basics of charts and technical analysis, so far it usually pays off to wait a bit )


Good gut advice. 3% down right out the gate. Example of why you don't know what you think you know.

Anyway, my gut tells me that the CAN$ is going down to 75 so I may do some gambitting for tickles. CAN $ has limited upside.


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## Woz (Sep 5, 2013)

Fain said:


> Securities that are fully paid for can't be loaned out. No matter if it's a margin account. The only exception is that if there is a written agreement between the client and the brokerage.


You mean like this written agreement that all Questrade customers have agreed to when they open their account: http://media.questrade.com/downloads/accounts/AGMT001EN.pdf (p35)



> "The Client also hereby grants to Questrade the right to carry in its general loans and to pledge, repledge, hypothecate, rehypothecate, invest or loan, either separately or with the property of other Client, to either itself as brokers or to others, any Securities or other property held by Questrade on Margin for the Accounts of the Client or as collateral therefore, without notice to the Client and without any obligation to pay to the Client, or to Account to the Client for any interest, income, or benefit that may be derived there from."


I'd add, this isn't unique to Questrade. They're getting picked on a bit in this thread, but most brokerages have such statements in their agreements.


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## Moneytoo (Mar 26, 2014)

none said:


> Good gut advice. 3% down right out the gate. Example of why you don't know what you think you know.
> 
> Anyway, my gut tells me that the CAN$ is going down to 75 so I may do some gambitting for tickles. CAN $ has limited upside.


Yep, you're right, should've listened to my butt and waited for one more day  Still, almost 81 cents is better than 78 cents (and now I'll have the USD to buy whatever goes down during summer)

Seriously, though, why I usually tease the indexers (while being mostly the indexer myself - just bought a shitload of XEF on Monday, against my better judgement ) is because you typically assume that everyone has the same goals, values, aspirations, motivations and other "ations" as you do. While being motivated by making the most money with minimum risk and effort is great, some of us just want to have fun, you know


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## none (Jan 15, 2013)

Sure - and as someone who does math for a living I just don't really get a thrill out of random events. For example, I don't find flipping a coin 10 times and getting 8 heads particularly fun.

I'll save my thrills for booze and whores thanks.


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## Fain (Oct 11, 2009)

Woz said:


> You mean like this written agreement that all Questrade customers have agreed to when they open their account: http://media.questrade.com/downloads/accounts/AGMT001EN.pdf (p35)
> 
> 
> 
> I'd add, this isn't unique to Questrade. They're getting picked on a bit in this thread, but most brokerages have such statements in their agreements.


That agreement pertains to securities only bought on margin using Questrade's money. It doesn't count fully paid for securities. They haven't lent out any securities that are fully paid for.


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## humble_pie (Jun 7, 2009)

Woz said:


> You mean like this written agreement that all Questrade customers have agreed to when they open their account: http://media.questrade.com/downloads/accounts/AGMT001EN.pdf (p35)
> 
> 
> "The Client also hereby grants to Questrade the right to carry in its general loans and to pledge, repledge, hypothecate, rehypothecate, invest or loan, either separately or with the property of other Client, to either itself as brokers or to others, any Securities or other property held by Questrade on Margin for the Accounts of the Client or as collateral therefore, without notice to the Client and without any obligation to pay to the Client, or to Account to the Client for any interest, income, or benefit that may be derived there from."
> ...




Woz you are quite right, thankx for the amplification & clarification.

i was more trying to question all privately-owned brokers whose capitalizations are unknown, let alone any knowledge of their business practices.

not that the chartered banks are translucent about their brokerage subsidiaries, either. We are actually all in the dark.


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## Moneytoo (Mar 26, 2014)

none said:


> Sure - and as someone who does math for a living I just don't really get a thrill out of random events. For example, I don't find flipping a coin 10 times and getting 8 heads particularly fun.


So do I (well, sort off, but my major was Applied Math, an equivalent of Computer Science in Canada) - and yet I love buying lottery tickets once in a while just because I feel like it  Not winning is not important, but scratching it or waiting to check the numbers, oh the anticipation, the joy of inner child, the all-knowing smile of adult brain... totally worth it 



none said:


> I'll save my thrills for booze and whores thanks.


Ok, maybe you're not such a lost cause after all


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## humble_pie (Jun 7, 2009)

Fain said:


> That agreement pertains to securities only bought on margin using Questrade's money. It doesn't count fully paid for securities. They haven't lent out any securities that are fully paid for.



surely all depends upon the definition of an account running on margin? it's a composite account, not a compilation of individual stocks & options with each one margined independently.

the broker would look at a net margin debit account as everything on margin, i believe. The fact that cash may have been injected from time to time to help pay for some of the stocks & options in the account would not cancel out any part of a net margin deficit, is my understanding.

even securities that were thought to have been fully paid-for once upon a time can impair a margin account if their market price collapses while a collective margin debt is owed by the account as a whole, is my understanding.


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## Eclectic12 (Oct 20, 2010)

Woz said:


> ... I'd add, this isn't unique to Questrade. They're getting picked on a bit in this thread, but most brokerages have such statements in their agreements.


What appears to be unique is that that opening a taxable account = a margin account. 

Unless there's separate account numbers (which did not seem to be the case for the posts I've read by Questrade customers) ... it would appear that one has agreed to loan out securities one has paid for.

I'd have to check what's in the agreements for setting up new accounts but as I recall, when I setup my cash account - there was no such clause. Years later, when I setup my margin account - a similar clause was in the account setup documents to sign.



Cheers


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## humble_pie (Jun 7, 2009)

i think the usefulness of a thread lke this is that it focuses investors' attention upon complicated aspects of margin accounts that they truly do not yet quite understand.

covered calls, for example, are very common, yet how many covered-call-writing investors understand that the existence of the short calls is impairing their margin, even though they may have fully paid for the underlying stock at the time they purchased it?

Woz is right when he suggests that we should not pick on any one brokerage unfairly.

yet i believe that IB is another privately owned brokerage that gains from the heavy margin profiles of its clients. I don't know about Virtual brokers, do they offer non-registered cash accounts in addition to margin accounts? or are all VB non-registered accounts margin accounts only, as are questrade's.


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## Eclectic12 (Oct 20, 2010)

For VB ... they seem to be using the same "margin + ... " formula as Questrade.



> All-in-One Account (Equity/Option/Margin/Short)
> Efficiency and flexibility is the name of the game at Virtual Brokers. Our All-in-One Account allows you trade stocks, options and exchange-traded debentures on margin, and also take short positions, all in one account!


https://www.virtualbrokers.com/contents.aspx?page_id=20


The rest on the list are registered accounts except for "Delivery Against Payment (DAP)". The DAP account is described as "This type of account is reserved for select applications and is not appropriate for general trading use."


Cheers


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## Woz (Sep 5, 2013)

I did a bit more reading. Brokerages are required to follow IIROC rules. Under IIROC Rule 17.3, all fully paid or excess margin securities are required to be segregated and held in trust.

In the event of insolvency segregation doesn’t necessarily help. According to CIPF and Part XII of the Canadian Bankruptcy and Insolvency Act (262.1) assets would be distributed in proportion to their net equity regardless of whether the assets were segregated.

Questrade also says in their agreement:

“You hereby authorize us to lend either to ourselves or others any Securities held by Questrade in a Margin Account and to carry all such property in our general loans.”

However, I tend to agree with Fain now that it only applies if you’re on margin.


Relevant links:
IIROC Rule 17 - http://iiroc.knotia.ca/Knowledge/Vi...linkType=toc&dbID=231501341&tocID=240#para_10
IIROC Rule 2000 - http://iiroc.knotia.ca/Knowledge/View/Document.cfm?Ktype=445&linkType=toc&dbID=231501341&tocID=707
CIPF Segregation FAQ - http://www.cipf.ca/public/FAQ/Coverage/Segregation.aspx
Canadian Bankruptcy and Insolvency Act - http://laws-lois.justice.gc.ca/eng/acts/B-3/page-128.html#docCont


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## james4beach (Nov 15, 2012)

Woz said:


> I'd add, this isn't unique to Questrade. They're getting picked on a bit in this thread, but most brokerages have such statements in their agreements.


Yes, and that's why I said that when you use a margin account, you are giving the broker the right to do all kinds of security lending and shuffling tricks. It comes along with margin accounts, it's part of the beast.


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## humble_pie (Jun 7, 2009)

many margin accounts have either some margin impairment, ie at some point one stock or another was not fully paid for, or else the margin account is running short option positions, which automatically impair the margin.

what many don't realize is that impairment allows the brokers to borrow any or all of the stocks in such margin account.

from the brokers' pov, cash flow in a margin account is a continuous stream. There's no segregation of this security having been paid for while that other security wasn't fully paid for. What counts is the overall margin position. If impaired, the broker can borrow freely ...

interactive brokers is another that thrives on borrowing stocks from its clients' margin accounts.


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## christinad (Apr 30, 2013)

I just want to point out that questrade doesn't seem to have a security guarantee like TD does. I'd rather have my money safe then save a couple dollars.


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## liquidfinance (Jan 28, 2011)

I've been using Questrade happily since 2010 and the service has always been perfectly acceptable. 

I love the fact you can buy ETF's for free and I exploit this feature for my RESP strategy. At the moment I don't see a compelling reason for me to move my investments to TD or any other big bank.


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