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Shafted by Questrade - recommendations on other brokerages?

  • Last Updated:
  • Apr 17th, 2019 11:36 pm
[OP]
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Sep 2, 2017
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Shafted by Questrade - recommendations on other brokerages?

Been with Questrade for 3 years. I haven't been paying attention to the commissions I've been paying (foolish me). Just realized the "lowest fees in Canada" is a lie.
Say I place a order for 5000 shares for ABC.TO. Questrade says on their website $9.95 is the max commission, that's a lie. If ABC.TO order gets filled in 3 chunks: 2000, 1000, 2000, Questrade calculates commission on each chunk. Even though trade is fulfilled same day. So total commission may be $15 instead of $9.95.

Small squabble I know especially when gaining/losing hundreds a day, but annoyed that I haven't paid attention.

Anyone have recommendations for a brokerage? One that has truly flat rate regardless of how order is filled?

=======================
Update:
I misunderstood the fees, @xgbsSS set me straight. Those fees are ECN fees and odd lot fees.
Explanation of ECN fees: https://canadiancouchpotato.com/2014/12 ... -ecn-fees/
Odd lot means placing bid/ask for share counts smaller than multiples of 100 (for example: 1520, 20 is the odd lot).

Questrade has these fees. I confirmed CIBC and TD do not, others probably don't either.

For me, Questrade as a broker doesn't make sense anymore as I do more trading on individual stocks and almost none on ETFs. Also I place lots based on how much cash I have available, and would rather not have to round to nearest 100. So I will transfer.
Last edited by splatapus on Mar 26th, 2019 6:10 pm, edited 2 times in total.
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TD DI is 9.99$.. and I got some fills spread over 20 chunks ! still 9.99$
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OK.... before jumping the gun, let's just double-check how you are entering orders.

When you place orders, how are you placing them? Remember, the trading commission Questrade charges is max $9.95, but there also is the ECN/ATS that may apply. Being your example of 5000 shares, this could equal $0.0035*2000 for the first chunk that transacted and it removed liquidity which equals $7 which equates to approximately $16.95 which may explain what I am suspecting is happening in your case. Questrade does state they pass the ECN and ATS fees on you. Other brokers do this as well, although a lot of banks ones don't.

Im with Virtual Brokers and their 1c per share I am grandfathered with is great. Their current $1.99 min and $7.99 max is also great too. Questrade does have fairly cheap commission especially their ETF purchasing, however I think you need to understand your commission structure first before getting worked up here. Virtual Brokers also charged ECN/ATS, but for the most part, it hasn't been an issue for me.

https://www.questrade.com/pricing/self- ... ransaction

https://www.reddit.com/r/PersonalFinanc ... n_selling/

Remember, ECN fees are avoidable.
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[OP]
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alexcalvado wrote:
Mar 25th, 2019 8:29 pm
TD DI is 9.99$.. and I got some fills spread over 20 chunks ! still 9.99$
Thanks. Will call in to TD and get details on set-up and transfer over existing holdings.
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xgbsSS wrote:
Mar 25th, 2019 8:59 pm
OK.... before jumping the gun, let's just double-check how you are entering orders.

When you place orders, how are you placing them? Remember, the trading commission Questrade charges is max $9.95, but there also is the ECN/ATS that may apply. Being your example of 5000 shares, this could equal $0.0035*2000 for the first chunk that transacted and it removed liquidity which equals $7 which equates to approximately $16.95 which may explain what I am suspecting is happening in your case. Questrade does state they pass the ECN and ATS fees on you. Other brokers do this as well, although a lot of banks ones don't.

Im with Virtual Brokers and their 1c per share I am grandfathered with is great. Their current $1.99 min and $7.99 max is also great too. Questrade does have fairly cheap commission especially their ETF purchasing, however I think you need to understand your commission structure first before getting worked up here. Virtual Brokers also charged ECN/ATS, but for the most part, it hasn't been an issue for me.

https://www.questrade.com/pricing/self- ... ransaction

https://www.reddit.com/r/PersonalFinanc ... n_selling/

Remember, ECN fees are avoidable.
Thanks for the explanation but not sure how are ECN/ATS fees calculated? Anyways I really don't want to worry about commissions as I'd be counting peanuts. I just want to settle with a good flat rate broker.

As evidence for what I'm saying, attached is image of a trade earlier this month. I placed the order as one, got 4 fills, 4 different commissions.

Image

But also fed up with some other shenanigans from Questrade. Foreign exchange sometimes leaves my account in tiny negative balance for various reasons. Trying to buy stocks on other exchanges very expensive. Questrade was great when I first started and only bought ETFs and a few thousands dollars, but ready to move on. Although not ready for the big leagues like IB yet.
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splatapus wrote:
Mar 25th, 2019 9:01 pm
Thanks. Will call in to TD and get details on set-up and transfer over existing holdings.
splatapus wrote:
Mar 25th, 2019 9:07 pm
Thanks for the explanation but not sure how are ECN/ATS fees calculated? Anyways I really don't want to worry about commissions as I'd be counting peanuts. I just want to settle with a good flat rate broker.

As evidence for what I'm saying, attached is image of a trade earlier this month. I placed the order as one, got 4 fills, 4 different commissions.

Image
You are placing limit orders so they fill immediately or market orders which removes liquidity. This triggers an ECN of $0.0035 per share. Additionally, you have an unmarketable trade because you also sold in units that were not divisible by 100.

So your total commission is
$9.95 + $4.95 (for the 10 shares) and 2610*$0.0035 =
$24.035 which is $24.04.

If you are trading stock like this more so than buying ETFs, and avoiding fees is the most important, I would go with CIBC Investor's Edge at $6.95 and no ECN charged.

The reason why I bring this up is that you need to make sure you understand the fees and commissions of any brokerage before signing up and applying it to youe situation. The reason why I brought this up is that even if we told you a different brokerage, you may end up finding a different fee you are not happy with or another surprise you werent expecting. For many investors who only do ETFs, Questrade is probably the cheapest or close to cheapest choice there is, hence why they can claim lowest commission
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[OP]
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xgbsSS wrote:
Mar 25th, 2019 9:20 pm
You are placing limit orders so they fill immediately or market orders which removes liquidity. This triggers an ECN of $0.0035 per share. Additionally, you have an unmarketable trade because you also sold in units that were not divisible by 100.

So your total commission is
$9.95 + $4.95 (for the 10 shares) and 2610*$0.0035 =
$24.035 which is $24.04.

If you are trading stock like this more so than buying ETFs, and avoiding fees is the most important, I would go with CIBC Investor's Edge at $6.95 and no ECN charged.

The reason why I bring this up is that you need to make sure you understand the fees and commissions of any brokerage before signing up and applying it to youe situation. The reason why I brought this up is that even if we told you a different brokerage, you may end up finding a different fee you are not happy with or another surprise you werent expecting. For many investors who only do ETFs, Questrade is probably the cheapest or close to cheapest choice there is, hence why they can claim lowest commission
Great, thank you very much for taking the time to explain. I will take a look at CIBC.

However I think a nonmarketable order is complete b.s. Let's say you look at a company, calculate fair value and believe $1.50 is a good entry point. Stock currently $1.48. I'm not going to place a bid under the current market price just to add liquidity and avoid ECN fees. I would just buy in right now as I think it's worth it. Thus I don't think Questrade is suitable for most traders. Thanks for teaching me about ECN fees though, now I understand.

EDIT: Sorry I misunderstood the adding/removing liquidity, got it backwards. Fixed my example.
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splatapus wrote:
Mar 25th, 2019 9:27 pm

Great, thank you very much for taking the time to explain. I will take a look at CIBC.

However I think a nonmarketable order is complete b.s. Let's say you look at a company, calculate fair value and believe $1.50 is a good entry point. Stock currently $1.65. I'm not going to sit there during trading hours to monitor if stock goes below $1.50 and place a "marketable" order at $1.50. I think everyone would set limit order and if it gets filled great, if not whatever. Thus I don't think Questrade is suitable for most traders. Thanks for teaching me about ECN fees though, now I understand.
Well you have to remember that there is a fee with other brokerages still for units not bought in multiples of 100. 100 shares is called a "lot." Many traders only buy in lots for this reason. Questrade when they first started charged $9.95 with ECN at a time when most banks were charging $24.95 and many cases also passing along ECN. Back then, even with ECN, Questrade was totally worth it. The landscape is again changing and we even have brokerages like WealthTrade that charges zero commission now.
I am not defending Questrade, although Questrade is definitely great for beginners and ETF investors, and decent enough for buy and long term hold investors (where exact entry price isn't super important). If you are doIng more trades than investing in ETFs, then yes Questrade is not likely for you. At least you can be pretty happy that you saved alot in commissions when you were just an ETF investor. Definitely when leaving Questrade, do mention that ECN etc. is the biggest driving factor. Brokerages are becoming more and more competitive. The likes of Etrade, VB, IB, Thinkorswim, Jitney, Questrade, etc. were pioneers and forced banks to start competing. Now that it has become more competitive, it is important to move accordingly. Perhaps Questrade will move to rid ECN on trades.

Oh and see that transfer fees are covered by the receivIng institution.

Additionally, depending on the amount you have, you may qualify for discounts on commissions or use of level 2 data or data packages etc. at many brokerages so do keep this in mind before opening accounts.

For example, Scotia iClub.
https://www.scotiaitrade.com/en/direct- ... rship.html
https://www.scotiaitrade.com/en/direct- ... rship.html
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Questrade is good for little guys, and ETFs

If you have lots of money, go with CIBC
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Wait - I remember this.

If they're all filled within the day you get reimbursed back the extra fees. If they're filled over multiple days then you have to pay commission per day.
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lawonga wrote:
Mar 25th, 2019 11:07 pm
Wait - I remember this.

If they're all filled within the day you get reimbursed back the extra fees. If they're filled over multiple days then you have to pay commission per day.
Only on the commission. ECN still applies.
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Questrade sells Clients orders to High Frequency Traders to trade against your order. This results in inferior executions compared to other brokerages. Along with the ECN fees that are inflated over and above what the actually ECN/Executing Venue Charges.
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xgbsSS wrote:
Mar 25th, 2019 9:50 pm
Well you have to remember that there is a fee with other brokerages still for units not bought in multiples of 100. 100 shares is called a "lot." Many traders only buy in lots for this reason. Questrade when they first started charged $9.95 with ECN at a time when most banks were charging $24.95 and many cases also passing along ECN. Back then, even with ECN, Questrade was totally worth it. The landscape is again changing and we even have brokerages like WealthTrade that charges zero commission now.
I am not defending Questrade, although Questrade is definitely great for beginners and ETF investors, and decent enough for buy and long term hold investors (where exact entry price isn't super important). If you are doIng more trades than investing in ETFs, then yes Questrade is not likely for you. At least you can be pretty happy that you saved alot in commissions when you were just an ETF investor. Definitely when leaving Questrade, do mention that ECN etc. is the biggest driving factor. Brokerages are becoming more and more competitive. The likes of Etrade, VB, IB, Thinkorswim, Jitney, Questrade, etc. were pioneers and forced banks to start competing. Now that it has become more competitive, it is important to move accordingly. Perhaps Questrade will move to rid ECN on trades.
They don't just pass on ECN fees to clients. They add a significant extra amount to the orders that get charged.

$0.0035 per share is what they post for removing liquidity. Go on the TSX's website or any other ECN's website. You won't find a single one that has a $0.0035 fee for removing liquidity. To give you an example the fee for client sending an ETF order removing liquidity on the TSX is $0.0017 per share. HOWEVER Questrade charges the end client over $0.0035. That's over 100% mark-up on the fee that the exchange charges and Questrade keeps that as profit. So the Statement of Questrade is just passing on the fees to the client is misleading. There is a hidden fee there.

https://www.tsx.com/resource/en/1756/ts ... 018-en.pdf

Clients have complained about this for years and we've had 3 different Director of Client services for the last 5 years that I've been there for. They are aware that Clients have complained about the fee for ages but the margins on the fee mark-up are way too huge to ignore and not enough clients complain.
Last edited by SteveFletcher1960 on Apr 3rd, 2019 1:10 am, edited 1 time in total.
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SteveFletcher1960 wrote:
Apr 1st, 2019 10:01 pm
I've worked at Questrade for over 5 years and they don't just pass on ECN fees to clients. They add a significant extra amount to the orders that get charged.

$0.0035 per share is what they post for removing liquidity. Go on the TSX's website or any other ECN's website. You won't find a single one that has a $0.0035 fee for removing liquidity. To give you an example the fee for client sending an ETF order removing liquidity on the TSX is $0.0017 per share. HOWEVER Questrade charges the end client over $0.0035. That's over 100% mark-up on the fee that the exchange charges and Questrade keeps that as profit. So the Statement of Questrade is just passing on the fees to the client is misleading. There is a hidden fee there.

https://www.tsx.com/resource/en/1756/ts ... 018-en.pdf

Clients have complained about this for years and we've had 3 different Director of Client services for the last 5 years that I've been there for. They are aware that Clients have complained about the fee for ages but the margins on the fee mark-up are way too huge to ignore and not enough clients complain.
ECN markup is not unique to Questrade. VB was 3.9 cents and only recently lowered to 3.5 cents. Most brokerages I've seen that still pass on ECN is 3.5 cents. How brokerages make money is up to them. Questrade still is fairly cheap considerIng this especially for small individual investors. There are better platforms once you start doing individual stocks or larger volume trades. And of course, many can just avoid the fees altogether.

But until Questrade starts seeing client losses significant enough, nothing will change.
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