If you are new to online stock trading, you can open a stock trading account in a matter of minutes with many stock trading platforms in Canada. All you need to do is follow a couple of simple steps to get started. Find out how you can open a stock trading account in Canada, how to place an order, and which stock brokers are best for beginners.
How to open an online stock trading account in Canada
You can open a stock trading account by following the steps below. Just be aware that these steps may vary based on which stock trading platform you sign up with.
Compare stock trading platforms. Compare different platforms to find the one that offers all of the features you want at a price you can afford. Keep in mind that some platforms require you to pay account maintenance fees and commissions for every trade you execute while others are almost entirely free but may have fewer trading options.
Choose your membership level if necessary. Some providers give you the choice to have a low-cost beginner account or a more expensive expert trading account. Choose the online trading platform that meets your needs and only pay for the features that you know you’ll use.
Fill out account details. You’ll need to provide your full name and a valid form of government-issued photo ID to get started. You may also need to supply personal details such as your email address, phone number, residential address and Social Insurance Number (SIN).
Link your bank account. You’ll need to supply details of the bank account which will be used to finance your trades and you may be required to deposit a minimum amount. Some stock trading platforms will also require you to open a cash management account with a specific financial institution before you can start trading.
Submit your application. Your application to open a stock trading account will usually be processed within 1-2 business days. Once you’ve opened an online stock trading account, you can start trading. Most trading platforms will let you start trading on the same day you apply as long as you link your bank account and fund your wallet.
Go with this platform if you are just starting out with investing and want a commission-free option for buying standard securities like ETFs.
Look elsewhere if you want to trade more complex securities like options or if you want to hold USD in your account.
Wealthsimple Trade charges no annual fees, zero commissions on trades and has no account minimums. It's one of the lowest-cost trading options available to Canadians. You can open a non-registered account, RRSP or TFSA. There's a mobile and a web platform. It offers educational resources and tools, including savings calculators, articles and investor masterclass videos. One downside is that you're limited in the types of securities you can trade, as this platform offers mostly stocks and ETFs.
Go with this platform if if you are a beginner who wants the comfort of a well-established financial brand.
Look elsewhere if you want a quality mobile experience.
Scotia iTrade commissions start at $9.99 per trade, although this is lowered to $4.99 per trade if you make more than 150 trades per quarter. It charges an annual fee of $100 on accounts with less than a $25,000 balance. Scotia iTrade offers a practice account with a fictional portfolio of $100,000 that lets you use the platform and get your feet wet with different kinds of trades using what is essentially play money. Mobile app users weren't impressed with the UI or the overall speed of the experience.
Asset Types
Bonds Options Mutual Funds ETFs GICs International Equities
Minimum Age
18
Stock Trading Fee
$4.99-$9.99
Option Trading Fee
$9.99 + $1.25 contract ($4.99 + $1.25 contract if completed 150 trades or more a quarter)
Account Fee
$0
ETF Transaction Cost
$9.99 ($4.99 if completed 150 trades or more a quarter)
Go with this platform if you want to be able to trade a variety of securities and are less concerned about trading commissions.
Look elsewhere if you want low fees.
CIBC Investor's Edge lets you trade a variety of different investment types through its online platform. You'll be able to put your money into registered and non-registered accounts. The platform is user-friendly and provides a number of resources to help you get acquainted with the platform. It also gives you access to research tools to help you make informed decisions about your investments. One downside is that you'll pay trading fees of $4.95 - $6.95.
Go with this platform if you want low fees and the ability to trade various types of securities.
Look elsewhere if you want low fees but you aren't ready to start buying anything other than stocks and ETFs.
Questrade is one of the cheapest places to buy and sell securities online in Canada. Compared with Wealthsimple, it offers a much larger selection of securities to trade, including options, foreign currencies and commodity futures. There's no annual fee and zero commissions when you buy ETFs. Other trading fees range between $4.95 - $9.95. Questrade offers a web platform and a mobile app. However, users complained about prices quoted on the app lagging actual markets and long loading times.
Go with this platform if you want competitive commissions and access to educational tools and online tutorials.
Look elsewhere if you aren't planning to have a minimum of $25,000 in your account or fund it regularly (since you will incur a quarterly fee).
A well-known investment broker, Qtrade Direct Investing offers an easy-to-use online platform and mobile trading platform. With low and competitive commissions, you'll also be able to trade 100 select ETFs commission free. You'll get access to independent research tools and online tutorials designed to help you make more-informed decisions about your investments. One downside is that there's a quarterly fee to maintain your account unless you meet certain requirements.
Go with this platform if you want an easy-to-use platform with low trading commissions and plenty of investment options.
Look elsewhere if you want don't want to pay an annual fee to maintain your account.
BMO Investorline is not the cheapest, nor the most feature-heavy platform. You'll pay $9.95 per trade and an annual fee if you have less than $15,000 in your account. You can trade stocks, options, ETFs, mutual funds, GICs and bonds. There's no minimum account balance required. It has a web portal and a mobile app, which is not rated well in app stores. Users complained about the equity search function not working properly, among other things. BMO Investorline makes its investment research available to users.
Go with this platform if you don't plan on making a lot of trades.
Look elsewhere if you want low fees.
TD Direct Investing doesn't stand out from other platforms we looked at. You'll pay $9.99 to trade stocks and an annual fee of $100 if your balance is below $15,000. This is the priciest commission rate among platforms we compared, though mutual funds are commission-free. You can invest with a non-registered cash account, TFSA and RRSP. It offers margin accounts that let you borrow money to invest. TD Direct makes equity research from TD available to users.
Asset Types
N/A
Minimum Age
18
Stock Trading Fee
$9.99
Option Trading Fee
Between $7 and $9.99 (+$1.25 per contract)
Account Fee
$100
With a growing number of online stock brokers on the market, we narrowed down our options to a list of top performers by considering key factors like trading fees, account fees, trading options and professional support. That meant digging into details like fee schedules, how to open an account and the number of stock exchanges clients can access through each brokerage. No single online brokerage will be the best choice for everyone, so compare your options before registering for your new account.
How do I choose an online stock trading platform?
You’ll need to carefully consider your trading needs before deciding on the right online stock trading platform. Some of the features to consider include:
Fees and commissions. Look at how much you’ll have to pay for your stock trading account before you sign up. There are many mobile platforms out there that come with zero fees and zero commissions (such as Wealthsimple Trade).
Trading resources. Some platforms offer resources such as educational tutorials, market analysis and investment advice while others have relatively few. Be prepared to pay a fee if you want to access additional resources.
Customer service. Many trading platforms operate entirely online while others come with dedicated advisors. Think about how much help you’ll need and pick the service that has the best online reviews for customer support.
Trading knowledge and experience. You may want to opt for an advanced platform at a higher price if you’re trading futures or dabbling in market forecasting. Beginners can usually afford to pay less for a more basic platform.
Available markets. Some stock trading platforms only give you access to the Toronto Stock Exchange (TSX) while others let you place international trades. Pick the platform that has the best mix of markets that you want to trade in.
Stock trading instruments. Think about what types of trades you want to make. Are you primarily interested in equities or would you like to buy cryptocurrencies or trade contracts for difference (CFDs)? Choose the platform that has the widest range of stock trading instruments you’ll actually use.
How much does it cost to sign up with an online stock trading account?
The amount you’ll have to pay to sign up for an online trading platform will depend on which platform you choose and what fees and commissions apply to your account:
Monthly or annual fees. Most online or mobile stock trading accounts won’t come with a monthly or annual fee. You may have to pay a maintenance fee to sign up with higher-end trading platforms which will usually be calculated as a percentage of your account holdings.
Commissions. Many stock trading platforms charge you a commission every time you execute a trade. However, Canada has seen the emergence of some commission-free platforms in recent years. You’ll want to keep this in mind if you plan to buy and sell large quantities of stocks.
How to buy stocks online in Canada
Now that you’ve opened an account, you’re ready to start trading. Here’s how to buy stocks online:
1. Fund your account
You need sufficient funds in your online trading account to cover the cost of the transaction, including any fees that apply.
Most online trading platforms require you to link a bank account to deposit money to invest, and it often takes two or three business days for that deposit to clear. However, some brokerages allow what they call “instant deposits” that make it possible for you to invest the deposited amount right away while it is being processed. Credit cards are typically not allowed for depositing funds into a brokerage account.
2. Choose the assets you want to buy
Start researching stocks that match your investment goals. To help you make informed decisions, access a wide range of market research, analysis and even trading recommendations through your platform.
Also consider the number of shares you want to buy. This is determined by your budget and your investment goals, but keep in mind that most trading platforms require you to buy full shares. So if a company stock trades for $1,000/share, you’d need to invest $1,000 to buy a full share. However, some trading platforms are beginning to offer fractional shares.
3. Place your order
This is where trading can get confusing for novice investors. You have three main options when placing a trade to buy shares:
Market orders. Use this when you want to buy a share immediately at the best price currently available, though you risk paying more than you expected if shares are difficult to trade or prices are volatile.
Limit orders. Set a maximum purchase price for your buy order. If that price becomes available within your specified time period, your trade is executed. Here you risk not trading at all if the price changes too much. You can generally set your order for the day or until you decide to cancel it.
Stop orders. Set a “stop price”. If that specified price is hit, the order is converted to a market order and is filled at the next available market price.
Once you’ve entered all the specifics of your transaction, review all those details before placing your buy order.
4. Monitor the performance of your investments
Monitor the performance of your shares against your investment plan. However, how often you monitor them depends on your strategy.
For example, if you have a long-term investment strategy, you may only check in and see how your shares are performing every month. If you have a medium-term strategy, it may be a good idea to check each night or each week.
Review the performance of your investments by logging into your trading account.
5. Sell your shares
If you decide to sell your shares, the process is similar to buying shares in step 4. Choose whether you want to sell via a market or a limit order.
Market orders mean the shares are sold immediately at the best available price.
Limit orders allow you to set the minimum sale price you’re willing to accept.
Advanced orders like stop-loss and trailing stop-loss orders are more complex and are for more experienced traders.
A stop-loss order sells your shares if they fall to a predetermined price you set to limit your losses.
A trailing stop, if available, is a percentage loss from the stock’s highest price rather than a specific price you set, so it “trails” or follows the stock price higher. For example, if you set a 25% trailing stop-loss order and the stock rose 10% before falling 25%, your sell order is triggered at a loss of only 15% from the price you bought.
How to pick stocks for beginners
To get more out of your online stock trading, consider these tips:
Do your homework. Making informed trading decisions is crucial to the success of your investments. Research the financial health and growth prospects of companies by poring over annual reports, keeping an eye out for company alerts, reading prospectuses and accessing research reports.
Stay up to date with the economy. Understand the health of the economy, interest rate decisions, government policy changes, levels of investor confidence, exchange rates and the performance of stock markets in other countries. All of these can influence when to invest.
Start with blue-chip companies. One of the safest options for anyone starting out in the stock market is to invest in blue-chip companies. These are Canada’s biggest, most established companies; many are included in the Dow Jones Industrial Average. They usually offer the best chance for minimizing your risk and providing steady returns.
What about speculative stocks? Small companies, whether they’re listed on a stock exchange or traded over the counter, have a shorter business history. Some investors find these shares attractive because they offer the potential for large returns – but could also suffer large losses.
Buy what you know. Rather than diving in at the deep end and investing in a company in a field you know nothing about, start with industries and businesses you know and understand.
Diversify. To minimize your exposure to risk, diversify your portfolio across a range of different industries. If you buy stocks across five or six industries instead of only one or two, you can be better protected against losses if one particular industry experiences a sharp downturn.
Risks of online stock trading
Before you start buying and selling stocks, be aware of all the risks involved, including:
Financial losses. A company’s stock prices can fall dramatically and even drop as far as zero. This can mean significant financial losses for investors.
Last in line. Shareholders are usually the last paid when a company goes broke. So there’s a chance you won’t get your money back.
Stress. The stock market fluctuates daily, which causes plenty of stress for investors. If you can’t afford the ups and downs, you’re better off looking for a safer and steadier investment option.
Unexpected problems. Even with thorough research into a company, you can’t predict the future. Natural disasters, terrorist attacks, pandemics, bad company news and even changes in government policy can all occur unexpectedly and adversely affect the price of shares.
Lack of expertise. While investing in the stock market sounds easy in theory, it can get quite complicated if you don’t know what you’re doing. First-time investors take investing slowly.
Getting in over your head. Don’t bite off more than you can chew. Take a cautious approach when investing in stocks, property or anything else.
Bottom line
It’s easier than ever to grow your money by investing with a stock trading account or a Robo-Advisor. Find out how to open a stock trading account in Canada and get tips for how to choose the best platform when you’re ready to start investing for the first time. You can also use this post to compare stock brokers that are best for beginners. Check out our stock trading guide for everything you need to know.
Frequently asked questions online stock trading for beginners
You can open a stock trading account by filling out an application with the broker through their website. You may also be able to sign up by downloading a mobile app. Once you’ve submitted your application, you’ll need to link your bank account and fund your brokerage account to start trading.
Once you’ve opened an account with the broker of your choice, investing online is as easy as funding your portfolio, searching the ticker symbol of the stock you want to buy, and then placing an order.
There are several online stock brokers that are suitable for beginners. However, one of the most popular on the market is Wealthsimple Trade since it offers no commissions, no monthly fees and no minimum balance requirements. The main downside is that it provides relatively few research or educational tools. Consult the table above to explore your options.
You may want to start investing for the first time when you have some savings put away. A good rule of thumb is to have all of your high-interest debt paid off first and to have an emergency fund that will cover a minimum of 3 months’ income should you lose your job. This will make sure you get the most benefit out of your investments.
Only you can decide the best way to invest $500 since your decision will be based on your stock interests and your risk appetite. For example, you may want to pursue a passive investment strategy if you’re looking for long-term growth. You’ll have a different strategy if you want to make quick cash by buying and selling stocks more aggressively.
Some stock trading platforms don’t charge anything to open an account. However, the platforms that offer in-depth research and dynamic market data often charge monthly fees. You should also keep in mind that you may have to pay a commission for executing trades, on top of your regular account fee.
Not necessarily. You can buy stocks in an initial public offering (IPO) by filling out an application form in the prospectus and paying by cheque. You may also be able to purchase stocks through a managed fund or as part of an employee stock investment scheme.
Yes, you can buy US stocks listed on US exchanges if you go through a brokerage that provides access to exchanges outside of Canada. These include brokers such as Wealthsimple Trade, Questrade and Interactive Brokers (for more advanced traders). Check out our guide on buying US stocks to learn more.
This depends on your brokerage platform. Some platforms allow you to purchase a variety of Canadian-listed shares, while some even offer over-the-counter or international shares. Research online trading platforms to see which stocks each provider allows you to buy and sell.
It depends on if you enter a market order or limit order. Buying shares at market value places your order as soon as possible at the best price available. A limit order offers you the ability to stipulate the maximum price you’re willing to pay and how long you’ll wait for the right market conditions. The limit order stays on the market until your designated expiration date, and if it’s not been executed by then, your order is cancelled.
If you’re entering a market order, your brokerage platform may let you review and modify your order before submitting. But once it’s submitted, it will be processed as soon as possible. If you decide to place a limit order and it hasn’t been executed, you can amend or even cancel the transaction.
Once you purchased shares in a company, you literally own a small portion of that company. As the stock market fluctuates daily and the value of shares rises and falls, the value of your shares will change. You’ll receive company reports and news updates so you can stay abreast of its performance and direction, while many companies will also pay out dividends – your share of the company’s profits or earnings – quarterly. It’s up to you to monitor the performance of your shares in line with your investment strategy and decide whether to sell, hold or buy more shares.
Image from Getty Images
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.
Claire Horwood is a writer at Finder, specializing in credit cards, loans and other financial products. She has a Bachelor of Arts in Gender Studies from the University of Victoria, along with an Associate's Degree in Science from Camosun College. Much of Claire's coursework has focused on writing and statistics, with a healthy dose of social and cultural analysis mixed in for good measure. She has also worked extensively in the field of "Blended Finance" with the Canadian government. In her spare time, Claire loves rock climbing, travelling and drinking inordinate amounts of coffee.
Investors often use a specific strategy when trading options based on how they predict stocks will move. Strategies can protect against losses but can also minimize gains.
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