Simulate trading stocks online canada
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Last updated Thursday, Sep. With interest rates stuck at generational lows, retail investors are on the hunt for the best bond yields they can snare. In Canada, bagging the best-paying bonds is tough because, unlike stocks, bonds are not bought and sold on a centralized, formal exchange. Rather, most retail bond trades are executed over-the-counter at the bond trading desk of one of the six major Canadian banks.
3 Top Canadian Stock Brokers
Fortunately, a small but growing marketplace for Canadian bonds aims to change the status quo. CBID is an online, fixed-income marketplace that provides investors with access to the best offer prices and yields for Canadian bonds from the six investment dealers who participate in its market. This subscription includes real-time pricing, detailed bond information and analytical tools.
The CBID website is a great source for bond pricing, but individual investors cannot buy or sell bonds at the site. They will need to have an account at one of the more than 50 investment firms that subscribe to the CBID marketplace. According to Lawrence McCann, vice-president for CBID at Perimeter Markets Inc.
To see whether transparent bond prices and commissions result in a better deal for investors, the cost for the same two bonds was compared at Bondview and at the websites of discount brokers Qtrade, TD Waterhouse, RBC Direct Investing and BMO InvestorLine. Of the four brokers, only Qtrade shows commissions separately from the bond price. The first bond was a Government of Canada issue, 4 per cent coupon, maturity date June 1, Qtrade listed the exact price shown in the Bondview inventory.
This firm quoted the lowest total cost bond plus commissionwhereas BMO InvestorLine was the most expensive. The second bond was a corporate issue by Fairfax Financial Holdings Ltd. A quote for this second bond was not available from TD Waterhouse.
It would seem that in the current bond trading environment — one that mixes a competitive marketplace with over-the-counter — transparent bond and commission pricing does not always guarantee the lowest total cost for a trade. Depth of bond selection is important, too. In the searches run for the aforementioned two bonds, all the brokers returned a similar number of offerings.
The cost for this service will be sks aftermarket stocks canada into the bond price, or if commissions are separated out, simulate trading stocks online canada may be an additional charge.
Those new to bond trading will want a broker that provides information on the types of bonds, credit quality, maturity dates and how to execute a trade, as well as insight into how economic factors affect bond returns. Having handy access to the right tools can contribute to better bond trades. RBC Direct Investing offers clients a practice account where they can simulate buying and selling bonds and other investments.
This is an excellent way for aspiring active bond traders to test trading strategies without losing their capital. TD Waterhouse has a tool for building a bond ladder that buy-and-hold investors would find useful. It even calculates the total monthly income that the chosen bonds will generate. While there is a growing transparent, competitive bond marketplace in Canada, a formal market for bonds that is as efficient and as open as the Toronto Stock Exchange is some ways off.
For now, bond investors who insist on the lowest price for a particular bond will have to shop the various brokerages. Everyone else would be well advised to open an account at the broker that offers the best value proposition for their overall investing needs.
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