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Trading American stocks - best way / least commission or exchange rate costs

  • Last Updated:
  • Mar 10th, 2021 1:41 pm
[OP]
Member
Jun 1, 2019
245 posts
314 upvotes

Trading American stocks - best way / least commission or exchange rate costs

Hello all

I've been using CIBC Investor's Edge for trading in Canadian stocks, and use QTrade and Yahoo finance for monitoring stock prices. I'd like to get into American stock trading, but are leery of losing multiple percentage points on CAD -> USD -> CAD exchange rates back/forth when buying/selling (I'm a high frequency trader). It seems that what would be ideal would be to move a large lump sum of CAD into a USD account at a reasonable exchange rate, and then trade in USD using that account, with no exchange penalty per transaction - we are fine with a flat rate cost per transaction, i.e. that we experience with Investor's Edge for Canadian stocks.

Can anyone give some advice as to how I might be able to manage this, or relate any low fee way that you trade US stocks? Thanks!
Full Service Realtor
Niagara / Hamilton-Burlington
15 replies
Member
Jan 5, 2015
275 posts
409 upvotes
Toronto, ON
InteractiveBrokers has the cheapest rates since it's just based off their forex platform

For everyone else, look into Norbert's Gambit method for your specific broker (basically just buying DLR.TO with CAD then selling it as USD once journaled over as DLR.U to the USD side of your account). Afaik, every broker lets you set up a USD side except for Wealthsimple
Member
Dec 7, 2008
302 posts
477 upvotes
Toronto, Ontario
Tailwind72 wrote: Hello all

I've been using CIBC Investor's Edge for trading in Canadian stocks, and use QTrade and Yahoo finance for monitoring stock prices. I'd like to get into American stock trading, but are leery of losing multiple percentage points on CAD -> USD -> CAD exchange rates back/forth when buying/selling (I'm a high frequency trader). It seems that what would be ideal would be to move a large lump sum of CAD into a USD account at a reasonable exchange rate, and then trade in USD using that account, with no exchange penalty per transaction - we are fine with a flat rate cost per transaction, i.e. that we experience with Investor's Edge for Canadian stocks.

Can anyone give some advice as to how I might be able to manage this, or relate any low fee way that you trade US stocks? Thanks!
Based on your situation (high-frequency trader, desire for having good FX rates) - you may want to check out Interactivebrokers.

1. $1 commission per trade (unless you are trading penny stocks since commission is $1 for x number of shares).
2. $10 monthly fee - but offset $-for-$ by commission fees you pay. So if you make 10 trades a month, you don't have to pay any monthly fee. (Or the monthly fee is waived if you have $100KUSD in the account)
3. FX is done at a very good rate. Search this forum for more details.
[OP]
Member
Jun 1, 2019
245 posts
314 upvotes
Thanks very much, will check out Interactive Brokers.
Full Service Realtor
Niagara / Hamilton-Burlington
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User avatar
Sep 19, 2013
2571 posts
964 upvotes
Winnipeg
Questrade is also good. They allow a technique called Norbert's Gambit (google it) for you to transfer the money at near spot (with regular commission).

Breaking news: I read on reddit just now that Norbert's Gambit is going to be online and will be charged $11.95. But as per the reddit post, the charge is only for online requests, not for chat/ phone.
In the beginning the Universe was created. This has made a lot of people very angry and been widely regarded as a bad move. -- Douglas Adams
Member
Mar 18, 2006
239 posts
228 upvotes
Mr Bean wrote:
Breaking news: I read on reddit just now that Norbert's Gambit is going to be online and will be charged $11.95. But as per the reddit post, the charge is only for online requests, not for chat/ phone.
New journal process

You will soon be able to place a journal request online, without the need of contacting us by phone, chat, or email. This service will be available for $9.95 + tax CAD per request. We will provide more details closer to when this service is ready to launch.


Not sure if this means no journal requests will be taken by phone, chat or email, or if $9.95+tax will apply using any channel.
Newbie
Mar 5, 2021
3 posts
"Norbert's Gambit is going to be online". What does this statement mean? Norberts Gambit is just a process that has always been on line. Or does this mean that a new web site is opening up called Norberts Gambit? I am interested but a little confused.
Thanks
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Sep 19, 2013
2571 posts
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Winnipeg
JohnRC74 wrote: Norberts Gambit is just a process that has always been on line.
Thanks
For Questrade, you couldnt place request to journal shares from your account (online). You had to connect to a real person through chat, email or phone. From what I gather, it means that now, they will have provisions for users to place the request through your online account, and I believe they will send it to a queue.
In the beginning the Universe was created. This has made a lot of people very angry and been widely regarded as a bad move. -- Douglas Adams
Deal Addict
Jun 19, 2006
2535 posts
446 upvotes
Toronto
Tailwind72 wrote: Hello all

I've been using CIBC Investor's Edge for trading in Canadian stocks, and use QTrade and Yahoo finance for monitoring stock prices. I'd like to get into American stock trading, but are leery of losing multiple percentage points on CAD -> USD -> CAD exchange rates back/forth when buying/selling (I'm a high frequency trader). It seems that what would be ideal would be to move a large lump sum of CAD into a USD account at a reasonable exchange rate, and then trade in USD using that account, with no exchange penalty per transaction - we are fine with a flat rate cost per transaction, i.e. that we experience with Investor's Edge for Canadian stocks.

Can anyone give some advice as to how I might be able to manage this, or relate any low fee way that you trade US stocks? Thanks!
Just curious, have you perform the Norbert's Gambit method with CIBC IE? What would be the minimum conversion amount that would make it worth it?
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May 8, 2007
1195 posts
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BC
albundy99999999 wrote: Just curious, have you perform the Norbert's Gambit method with CIBC IE? What would be the minimum conversion amount that would make it worth it?
I did N.G. About a year ago at TD DI, the currency exchange costs there are probably similar to most of the Cdn big banks. I did some calculations at the time and it looked like N.G. was worthwhile for amounts above approximately Cdn $3,000 (or US$ equivalent). There is a long thread here with title something like “recent experience with Norberts Gambit at TD DI” with lots of details (sorry, using tablet and cannot post link easily right now).

About trading costs for US stocks (my usual infrequent trade is US$5K to $30K, stock price roughly $150) commission is about $9.99 each way at TD DI.

At Interactive Brokers the commish is about $1 for my buys and $3 for sells with the fixed price commission fee plan, on the variable price plan which I’m recently trying, the buys are costing about $0.35 (have not sold anything yet on variable commission fee plan).
Sr. Member
Apr 14, 2006
952 posts
587 upvotes
St Johns
melodymelody wrote: Based on your situation (high-frequency trader, desire for having good FX rates) - you may want to check out Interactivebrokers.

1. $1 commission per trade (unless you are trading penny stocks since commission is $1 for x number of shares).
2. $10 monthly fee - but offset $-for-$ by commission fees you pay. So if you make 10 trades a month, you don't have to pay any monthly fee. (Or the monthly fee is waived if you have $100KUSD in the account)
3. FX is done at a very good rate. Search this forum for more details.
I don’t get the $1 trade .. it has to be a tiny amount of shares, I buy 10,000 + shares nothing cheaper than the banks
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Dec 4, 2011
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Montréal
tradinghumble wrote: I don’t get the $1 trade .. it has to be a tiny amount of shares, I buy 10,000 + shares nothing cheaper than the banks
.005/share under fixed pricing for US equities so 200 shares for the minimum $1 commission ramps up from there capped at 1% of total cost. You are not their target market obviously.
Sr. Member
Apr 14, 2006
952 posts
587 upvotes
St Johns
admiralackbar wrote: .005/share under fixed pricing for US equities so 200 shares for the minimum $1 commission ramps up from there capped at 1% of total cost. You are not their target market obviously.
Yes... correct. I could never make them work .... particularly on the Canadian side ... imagine 5,000 shares @ $0.05 = $250 CAD for 1 trade ... vs $10 (or $7 for high volume traders) with the banks ...

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