Trader education: 4 ways CIBC Investor’s Edge can help you level up
Become a wiser investor and learn how to make the most of the tools at your fingertips with CIBC Investor’s Edge.
Sponsored by CIBC. CIBC Investor’s Edge is a self-directed trading platform backed by one of the biggest banks in Canada. Right now, you can get 100 free online equity trades when you open an account using promo code EDGE100 (terms & conditions apply).
The stock market is always changing. Prices update every second, and millions of trades worth billions of dollars are executed daily. How do you keep up with such an ever-changing environment?
The good news is you don’t have to go it alone. CIBC Investor’s Edge offers a range of educational tools and features that help you unravel complexities and strategically plan your next moves.
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1. Investing 101
Every journey begins with a single step, and investing is no different.
If you’re eager to get a slice of the Magnificent Seven’s profits or dive into AI stocks, you’ll need a firm grasp of investing basics, including diversification, risk management and stock research.
This is a great starting point for beginners, but your trader education doesn’t have to end there.
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2. Diversify to reduce your risk
Even with reliable market data and expert analysis at your fingertips, it’s still impossible to accurately predict exactly where the market is headed at all times.
That’s why it’s wise to spread your bets across multiple assets and sectors.
“Diversifying” your portfolio means investing in different types of assets, sectors and markets, so that occasional dips in some assets are offset by gains in other assets.
Once you choose your preferred investment mix, revisit your portfolio every six to 12 months to ensure it aligns with the market’s performance as well as your goals.
You’ll need an investment platform that lets you trade a wide variety of securities. Some only let you trade stocks and ETFs, while others open up a broader range of opportunities.
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3. The trader’s toolkit
There’s a lot more to trading than buying and selling stocks at the current market price.
As you gain more experience, you may want to explore advanced strategies like margin trading.
Margin trading lets you amplify profits by borrowing to invest (of course, you risk amplifying losses as well).
You can also use limit orders to manage risk by executing trades only when an asset reaches a predetermined price.
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4. Options trading
Data, experience and a little intuition can take you far as an investor, and you may develop a knack for predicting how certain stocks will move.
Options trading gives you the chance to profit from these predictions by securing a window of opportunity in which to buy or sell an asset at a specific price.
However, there are some key factors to consider first:
- Options trading is risky. You may lose substantially if the market moves against your expectations.
- Given the risk level and complexity of options trading, it’s suitable for experienced investors, not beginners.
- Certain types of options trades require approval for margin trading, and this may come with special requirements. For example, CIBC Investor’s Edge clients must maintain an equity balance of at least $2,000 to trade on the margin.
- You’ll pay a fee (called a premium) per options trade, often a dollar or two per share. This is on top of the trading commission you’ll pay if you choose to exercise an option and buy or sell an asset.
So given the risks, why do people use options trading?
Well, it comes down to the potential rewards.
Options can be used to hedge against losses by giving you the chance to buy or sell an asset at a more advantageous price than the market price.
However, ensuring that you’ve got the right tools in place can help you make more informed investing decisions in the long term.
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Finder Score for stock trading platforms
To make comparing even easier we came up with the Finder Score. Trading costs, account fees and features across 10+ stock trading platforms and apps are all weighted and scaled to produce a score out of 10. The higher the score, the better the platform—it's that simple.